Business Article - Estate Agencies - A Buying Guide
By definition, an estate agency is a business which arranges the renting and selling of property, houses, and any other buildings or facilities. An estate agent is one who works at this kind of business. They are the ones who organize and negate the renting, selling, and exchange of business. It is speculated that the term, “estate agency,” is from the United Kingdom. Occasionally, the term “letting agent” is used for person who specializes in renting. Finding and marking property for sale is the job of an estate agent, while settling documents and deeds is work for a licensed conveyor, or a solicitor. This differs slightly in the United States.
In the U.S., an estate agent is generally called a real estate agent or broker, and they are responsible for the negotiating a sale between a client selling their property and the interested party. For this article, agent shall be used with most frequency, since the term “broker” is used in a slightly different way (this shall be explained later in the text). Since the U.S. was populated by England, it therefore makes sense that this relationship in the U.S. was established through a link to the English common law of selling property and estates from a broker to a client. In other words, agents assist clients, the seller, to mark their property or facility for sale or lease to get the highest possible market value. In addition, when an agent is acting as a guide for clients to buy property, they are helping the interested party to buy property at the lowest price or bid. There is usually a written agreement stating the agent’s commission upon sale. Sometimes this agreement is a verbal one, but this does not necessarily guarantee an agent’s commission. Sometimes without a written agreement the agent is allowed to help a buyer while still representing the seller.
The theory is that an agent receives a commission because they helped both the buyer and seller achieve prices they may not have been able to receive by acting individually. Therefore, typically a real estate agent has a license to help achieve these situations and receive commission in the form of monetary percentages in the United States. Buying an estate agency, or real estate business, as they are regularly referred as, involves research, a good instinct, and the ability to reason in the presence of risk.
Before seeking other information, it is a good idea to be certain that one understands the terms and history of real estate. In the United States, unlicensed activity is illegal, meaning that an agent cannot collect a commission without being licensed. But a buyer and seller do not need to have a license to conduct business. Remember, the idea of an agent is to receive a better price, but it does not mean that business cannot be conducted without them. But with the housing market not in the same high percentile as in the past, most are using agents to help buy and sell property to receive the lowest and highest possible prices. This is why there is no better time to buy an agency than now.
One of the benefits of buying an existing agency is knowing how well-trained the employees, agents, already are. As stated before, agents must be licensed to receive a monetary commission. In most cases, existing agents at an agency are there because they continue to do well. In such a highly competitive field such as real estate, agents are driven to work hard and do well. To be licensed, most agents have taken a number of classes. They have also studied for and passed the difficult state licensing exam. A number of agencies offer this education as a way of finding and keep promising agents. Here, the difference between an agent and a broker should be explained. An agent is a person who has completed various classes, usually 40-90 hours of course work, and passed the state licensing exam. Even though some states use the alternative term “broker” for an agent, it is important to understand that a real estate broker is a different aspect of the real estate business. Being a broker entitles someone to perform further and independent details of the property market and management of such businesses. Usually a licensed agent in one state can take another state’s exam without having to repeat the licensing course work. For hot spots, such as New Jersey and New York, this is good news for agents and agencies. Explaining further, a real estate broker (also a qualifying broker), not to be confused with agent alternatively being labeled “broker” in some states, is a salesperson who has worked in real estate and has knowledge and experience in the field enough to pass a broker’s exam and license (also called a principal/qualifying broker). This entitles them to own, manage, and operate their own brokerage agency. They may work for another brokerage agency or open their own and hire associates of their choice. Alternatives include New York and Colorado. In New York licensed attorneys can become licensed real estate brokers without taking an exam, and in Colorado, as in some other states, there are no salespeople, as all agents are brokers.
Adding to the importance of the reputation of the agency, real estate agents are required to disclose what agency or business they are representing. So as one can see, buying a reputable agency delivers a business with a name that people have learned to trust and are used to hearing in positive situations. Buying such a business will then also offer some of the best agents in the business, who have worked so hard to make the business viewed upon in such a positive way. This means that a lot of business transactions, in the form of property, have gone through the agency, thus gaining a lot of commission for both the agents and the business. By checking an agency’s reputation, yearly sales, and by evaluating the agents, one can deduct how valuable a real estate agency is. There is no shortage of agencies, but finding the right agent can really change your life. No one wants to sell a home and have it sit on the market, dropping in value, when another agent could make it fly.
In contrast, when one is seeking to sell their house or property, which agency should one choose? This is a different situation all together. Looking at an agency will show how long agents and brokers have been there, how long houses sit on the market with them, and how successful they are. A company may have a flashy name, but when you call them, do they put you hold for a long time? Are they late to meet with you? A larger company may have the name, but service is important. A smaller company may give individual attention, but can they sell a house quickly and for the highest price possible? There are other ways to find the best agent and agency. Do any friends recommend someone? Perhaps the house down the street sold quickly. It would be beneficial to stop in and talk to whoever was selling the home and what agent was used. The internet is another useful tool. When time is an issue, researching agents, brokers, and agencies on the net can be helpful.
Whether one is buying and selling property or looking to buy a real estate agency, owning property is something that everyone agrees is worth it. Therefore, putting time into research and handling some data collecting is useful when thinking about the value of the deal to be conducted. Lake-front property, city townhouses, ocean condos, and charming cottages are just some of the possibilities for ownership with real estate. Buying property and holding onto it for a better selling rate is an almost sure way to make money.
One caution, however, is fraud happening when appraising property. This can happen when a homeowner, looking to refinance a house or property, bullies an agent to price it at a much higher price. Again, research is the key. Ask around. If a price seems too high, get a second opinion and then offer a lower price. But this kind of caution only happens because real estate is a bubbling business where a lot of money can be made if risk and opportunity play in the favor of the buyer or seller. An agent can make a dream possible with a price not thought possible. So remember, research, tact, an open eye, intuition, and a knack for valuing property could make real estate a game to play with a favorable outcome.