WORK DESCRIPTION OF REAL ESTATE AGENT, BROKER,and APPRAISER ACCORDING TO U.S. STANDARDS - Part 1 of 2
(Reference: 1998-1999 Occupational Outlook Handbook, USA)
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* Real estate sales positions should continue to be relatively easy to obtain due to the thousands of people who leave this occupation each year.
* Real estate agents and brokers must be licensed in every State and in the District of Columbia.
Nature of the Work
The purchase or sale of a home or investment property is not only one of the most important financial events in peoples' lives, but one of the most complex transactions as well. As a result, people generally seek the help of real estate agents, brokers, and appraisers when trying to buy, sell, or establish a price for real estate.
Real estate agents and brokers have a thorough knowledge of the real estate market in their community. They know which neighborhoods will best fit their clients' needs and budgets. They are familiar with local zoning and tax laws, and know where to obtain financing. Agents and brokers also act as an intermediary in price negotiations between buyers and sellers. Real estate agents are generally independent sales workers who provide their services to a licensed broker on a contract basis. In return, the broker pays the agent a portion of the commission earned from property sold through the firm, by the agent.
Brokers are independent business people who, for a fee, sell real estate owned by others and rent and manage properties. In closing sales, brokers often provide buyers with information on loans to finance their purchase. They also arrange for title searches and for meetings between buyers and sellers when details of the transactions are agreed upon and the new owners take possession. A broker's knowledge, resourcefulness, and creativity in arranging financing that is most favorable to the prospective buyer often mean the difference between success and failure in closing a sale. In some cases, agents assume the responsibilities in closing sales, but in many areas, this is done by lawyers or lenders. Brokers also manage their own offices, advertise properties, and handle other business matters. Some combine other types of work, such as selling insurance or practicing law, with their real estate business.
Before showing properties to potential buyers, the broker or agent has an initial meeting with them to get a feeling for the type of home they would like and can afford. Often, an agent or broker uses a computer to generate lists of properties for sale, their location and description, and to identify available sources of financing. Traditionally, they then take the clients to see a number of homes that are likely to meet their needs and income. Increasingly, however, agents and brokers are able to use computers in their office to give clients a "virtual" tour of properties in which they are interested, allowing them to look at various types of images of the property, including interior and exterior images and floor plans.
Because buying real estate is such an important decision of a person's life, agents may have to meet several times with prospective buyers to discuss available properties. In answering questions, agents emphasize selling points likely to be most important to the buyer. To a young family looking at a house, for example, they may point out the convenient floor plan and the fact that quality schools and shopping centers are close by. To a potential investor seeking the tax advantages of owning a rental property, they may point out the proximity to the city and the ease of finding a renter. If bargaining over price becomes necessary, agents must carefully follow their client's instructions and may have to present counteroffers in order to get the best possible price.
Once the contract has been signed by both parties, the real estate broker or agent must see to it that all special terms of the contract are met before the closing date. For example, if the seller has agreed to a home inspection or a termite and radon inspection, the agent must make sure this is done. Also, if the seller has agreed to any repairs, the broker or agent must see they are made. Increasingly, brokers and agents handle environmental problems by making sure the property they are selling meets environmental regulations. For example, they may be responsible for dealing with problems such as lead paint on the walls. While many details are handled by loan officers, attorneys, or other persons, the agent must check to make sure that they also are completed.
There is more to an agent's and broker's job, however, than just making sales. Because they must have properties to sell, they may spend a significant amount of time obtaining "listings" (owner agreements to place properties for sale with the firm). When listing property for sale, agents and brokers compare the listed property with similar properties that have been sold recently to determine its competitive market price.
Most real estate agents and brokers sell residential property. A few, usually in large firms or small specialized firms, sell commercial, industrial, agricultural, or other types of real estate. Each specialty requires knowledge of that particular type of property and clientele. Selling or leasing business property, for example, requires an understanding of leasing practices, business trends, and location needs. Agents who sell or lease industrial properties must know about transportation, utilities, and labor supply. To sell residential properties, the agent or broker must know the location of schools, religious institutions, shopping facilities, and public transportation, and be familiar with tax rates and insurance coverage.
Because real estate transactions involve substantial financial commitments, parties to the transactions may seek the advice of real estate appraisers, who are objective experts and do not have a vested interest in the property. An appraisal is an unbiased estimate of the quality, value, and best use of a specific property. Appraisals may be used by prospective sellers to set a competitive price, by a lending institution to estimate the market value of a property as a condition for a mortgage loan, or by local governments to determine the assessed value of a property for tax purposes. Many real estate appraisers are independent fee appraisers or work for real estate appraisal firms, while others are employees of banks, savings and loan associations, mortgage companies, government agencies, or multiservice real estate companies.
During a property inspection, real estate appraisers investigate the quality of the construction, the overall condition of the property, and its functional design. They gather information on properties by taking measurements, interviewing persons familiar with the properties' history, and searching public records of sales, leases, assessments, and other transactions. Appraisers compare the subject property with similar properties for which recent sale prices or rental data are available, to arrive at an estimate of value. They may also estimate the current cost of reproducing any structures on the properties and how much the value of existing structures may have depreciated over time. Appraisers must consider the influence of the location of the properties, potential income, current market conditions, and real estate trends or impending changes that could influence the present and future value of the property. Depending on the purpose of the appraisal, they may estimate the market value of the property, the insurable value, the investment value, or other kinds of value. Appraisers must prepare formal written reports of their findings that meet the standards of The Appraisal Foundation.
Real estate appraisers often specialize in certain types of properties. Most appraise only homes, but others specialize in appraising apartment or office buildings, shopping centers, or a variety of other types of commercial, industrial, or agricultural properties. The amount of time necessary to do an appraisal varies by the type of property—for a residential property it may take a week, whereas for a commercial property, several months may be needed to complete the appraisal.
Because of advances in telecommunications and the ability to retrieve data on properties over the Internet, a growing number of real estate agents, brokers, and appraisers work out of their homes instead of offices. Even with this convenience, much of their time is spent away from their desk—showing properties to customers, analyzing properties for sale, meeting with prospective clients, researching the state of the market, inspecting properties for appraisal, and performing a wide range of other duties.
Agents, brokers, and appraisers often work more than a standard 40-hour week; nearly 1 of every 4 worked 50 hours or more a week in 1996. They often work evenings and weekends to suit the needs of their clients.
Real estate agents, brokers, and appraisers held about 408,000 jobs in 1996. Many worked part time, combining their real estate activities with other careers. Most real estate agents and brokers were self-employed, working on a commission basis.
Most real estate and appraisal firms are relatively small; indeed, some are a one-person business. Some large real estate firms have several hundred real estate agents operating out of many branch offices. Many brokers have franchise agreements with national or regional real estate organizations. Under this type of arrangement, the broker pays a fee in exchange for the privilege of using the more widely known name of the parent organization. Although franchised brokers often receive help in training salespeople and in running their offices, they bear the ultimate responsibility for the success or failure of the firm.
Persons who are real estate agents, brokers, and appraisers are older, on average, than those in most other occupations. Historically, many homemakers and retired persons were attracted to real estate sales by the flexible and part-time work schedules characteristic of this field and may enter, leave, and later reenter the occupation, depending on the strength of the real estate market, family responsibilities, or other personal circumstances. Recently, however, the high startup costs associated with becoming an agent have made some look elsewhere when looking for part-time work. In addition to those entering or reentering the labor force, some transfer into real estate jobs from a wide range of occupations, including clerical and other sales jobs.
Real estate is sold and appraised in all areas, but employment is concentrated in large urban areas and in smaller, but rapidly growing communities.
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