Thursday, October 8, 2015

One of the most common real estate questions out there: What exactly is a REALTOR?

For more great info, check out: Realtor.org, Realtor.com, + PARealtor.org

Welp, folks, I decided to go the educational route with this post, because real estate is becoming a hot topic at the dinner table once again (... and at the water cooler, the coffee machine, the food truck, the dry cleaner, the barbershop, you name it).

If you are a regular PUL.com reader, you know that I typically like to discuss development, local happenings, and all things Philadelphia and its Suburban Towns. Let's mix it up a bit, shall we.

What makes this post interesting is that most people throw around the term "Realtor" as if it were the only word to describe a person who has a career in real estate. I would say about 9 out of 10 times when people refer to my occupation, they say Realtor. Even though I am a Realtor and proud to be one, there is more to it.

While there is truth in saying that a licensed real estate agent can be a Realtor, not every licensed real estate agent is, or has to be, a Realtor. It's an option, a choice, and a specific way to run an agent's own business. After all, most real estate agents are considered self-employed "Independent Contractors," which basically means that most agents can run their businesses any which way they want to; which can be both good and bad.

To start this post off right, let's first define what it means to be a REALTOR (as per Realtor.org):

"The term REALTOR has one, and only one, meaning. REALTOR is a federally registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS and subscribes to its strict Code of Ethics."

So, going back to one of my earlier points, being a Realtor is a licensed real estate agent's choice. It means he/she has taken extra steps to make himself/herself a more accountable licensed agent by subscribing to approved ethical practices. In other words, he/she is agreeing to provide a higher level of customer service through honesty and integrity. Now, there are also real estate "brokerages" that mandate their agents become Realtor members, but that is a choice the brokerage made to ensure that the Code of Ethics is strictly adhered to.

Okay, now let's break this post down PUL.com-style:

- "The Internet has drastically changed the real estate industry ... for the better."

My professional opinion is that the last 5 years have drastically changed the real estate industry ... and for the better. Laptops, tablets, and smartphones have become real estate buyers and sellers' best friends, and rightfully so. They have educated the general public about how real estate works, as more customer information is now readily available with just a basic online search.

Seriously, how easy is it to just Google real estate questions/terms on your phone; it's almost too easy these days. Now, not everything you read online is 100% accurate, but there are enough resources and industry professionals readily available to answer any questions you might have.

Again, a good thing.

- "The changing real estate industry has increased the need for a better customer service experience."

Absolutely. With all of the positive changes that have taken place in the real estate industry, it has increased the need for all real estate agents to deliver higher quality customer service to all of their clients. The real estate industry can carry with it a negative stereotype (believe me, I know; it's what I do), as well as stir up old war stories from your grandparents, parents, friends, neighbors, coworkers, pets (just kidding), etc.

One of the main reasons why, about 25% of all licensed real estate agents are considered "part-time," which means they already have a full-time job (which they are more proficient at than real estate) and real estate is used to supplement their income (let's call it a 2nd job). That also means real estate is not their strong suit, and that can affect the overall customer experience. If you select a real estate agent to "represent" you, I am assuming that most people would prefer to work with someone who is an expert in real estate; considering the importance of buying, selling, or renting a home.

In reality, about 20% of all licensed real estate agents make $100,000 or more per year, and the median annual income for a real estate agent is about $40,000. In the local Philadelphia market, that's about 6-7 closed transactions per year. $40,000 per year is nothing to sneeze at, the point is that a majority of licensed agents are not representing clients enough; it's a tough business to break into. If inexperience is the norm, it can lead to a less-than-perfect experience for the client.

Use technology to your advantage, and choose an agent that you believe would be the best fit for you. Oh, and make sure they are a Realtor too. You know, for good measure.

- "Although real estate may be an experience that most only go through once or twice in their entire lifetime, each experience should be just as good as the last."

Since most buyers and sellers go through a major real estate experience only one or two times in their entire lives, it's not a service you need on a daily, weekly, monthly, or even yearly basis; which means it's easy to overlook the big picture. You buy a home, you get bad advice, you make mistakes, your closing is a mess, and you tell all of your friends and family what a stressful experience it was. In today's information-friendly age, it's very easy to pull up online reviews from people who did not like working with their real estate agent.

The traditional real estate approach was always, "Oh, Uncle Bobby has his real estate license? I'll work with him." Now the approach should be, "Does Uncle Bobby practice real estate for a living? I'll call/email/text and ask him a few questions first."

Buying or selling a home is one of the most important (if not the most important) transaction of peoples lives. More times than not, it's the most expensive thing you will buy/sell, it holds the most weight over how you live your life, and it requires the most serious commitment from those who choose to become homeowners.

Bottom line, there is a lot at stake in real estate. Therefore, you should expect to have a solid real estate experience and work with not only a Realtor, but with a Realtor who has produced many happy clients in the past. Run a basic online search first, it's the smart thing to do.

I hope this post was educational, and my goal is to post more like it in the future.

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