How to Choose Your Listing Broker / Realtor®
Selling your home is likely the biggest financial (and emotional) decision of your entire life! If you want to do it right, you need a Realtor®. Here's why.
Your home is where you’ve lived and loved, laughed and cried, huddled and snuggled - and you’ve been through a lot together. Now that it’s time to put it on the market, you’re likely experiencing some sadness, plus plenty of anxiety. If you’re a little overwhelmed, we don’t blame you. How often does your future depend on selling your past? But there’s also good news: You don’t have to go it alone. I will have your back when it comes to the details, strategy and financials, like setting a listing price, marketing, staging, identifying needed repairs to your home, working through the paperwork and legalities to guide you smoothly all the way to closing. I can also help you navigate more personal issues, such as your timeline, and what you’re hoping to achieve with the sale. For all of those reasons, it’s important to find an expert who is right for you and your specific situation, and who can help you accomplish what you want.
Why Should You Hire a Professional?
Selling a home can be a very complex transaction, dealing with a multitude of entities and issues, requiring a broad spectrum of knowledge and expertise. In order to avoid the inevitable pitfalls and mistakes, you need trusted experts and a support network to help you make critical decisions along the way. It makes sense to have an expert that is looking after your best interest. Sure you might get through it by yourself but it takes alot of work - and at what costs? I am in the business of helping others buy and sell homes. I will be your professional advocate in the transaction, the market expert and a negotiating tiger all wrapped up into one independent contractor. I will be your face, your voice, and your defense against all involved in the multi-layered home selling process.
Home Seller Statistics
- The typical home seller in 2017 was 55 years of age, had a median household income of $98,800, and lived in their home for 9 years.
- 91% of sellers worked with a real estate professional to sell their home.
- Recent sellers typically sold their homes for 99% of the listing price.
- 23% reported reducing the asking price at least once.
- For-sale-by-owner (FSBO) homes typically sell for less than the selling price of other homes. FSBO homes sold at a median of $200,000 in 2018 (up from $190,000 the year prior), and signiﬁcantly lower than the median of real estate professional-assisted homes at $264,900.
- The typical home sold was on the market for 3 weeks.
- 87% of buyers purchased their home through a real estate professional - 6% of buyers purchased directly from a builder or builder’s agent.
Source: 2018 National Association of REALTORS® Profile of Home Buyers and Sellers
Keep in mind, not all Brokers are Realtors®. A Realtor® is a Broker who is a member of the National Association of Realtors® (NAR), one of the the largest and oldest professional trade groups in the country. What difference does it make? Realtors® adhere to a strict, higher code of ethics than non-members to treat their clients, customers and other Brokers honestly and fairly.
What should you expect when working with a Realtor®? Below are only a few of the services, skills and advantages I can provide:
Before you start interviewing me as your prospective Realtor®, have a clear sense of what you want to get out of the selling process. When so much money is on the table, it’s crucial to know what your goals are, so you can determine if I am the right Realtor® for your situation. It will help you to understand what I do (other than help you sell your most valuable asset...).
I will be an unbiased, professional voice of reason - offering an unemotional, informed, objective perspective during your transaction. Because I've gone through a multitude of home buying and selling transactions, I can anticipate and warn you of potential dangers and looming issues - providing advice and suggesting solutions for your consideration in order for you to make the best decision for your particular circumstances. I will see outside your personal, emotional connection to a property and can help you analyze offers when faced with a multiple-offer situation, for example - to help you maximize the most value from the sale of your property.
I stay on top of rapidly changing market dynamics and pass along my expertise to my clients. Most people sell only a few homes in a lifetime, usually with quite a few years in between. Even if you’ve done it before, laws and regulations change. I track real estate trends and it's my job to be an expert on the properties in our community, as well as state, county, city and local rules and regulations. I have the experience and expertise to professionally guide you through the process.
I am a price expert! I will recommend a realistic asking price. That is the BIG question, right? How do I set the price? The list price of a home is the number one factor that will determine the amount of showings, terms and amount of offers, how quickly the home sells and the final sales price. The short answer is you’ll need to trust me to recommend a smart listing price, but rest assured, helping you get the best price for your home is one of my most important jobs. New Mexico is a non-disclosure state which means the sales price of homes are not public information - but I am a member of the local Multiple Listing Service (MLS) and members share final sales price information with other members. This allows me to analyze recent sales of comparable homes and comparable properties currently on the market to estimate how much buyers are willing to pay. The results will be delivered to you as a written Comparative Market Analysis (CMA) that professionally estimates an accurate market value of your property and establishes a realistic selling price you can expect during negotiations. The final recommended list price may be adjusted after I personally visit your home to verify the selected comparables match your homes quality of construction and current condition. The true market value of a home is determined by how much a buyer will pay! What you paid when you bought the home plus the amount you spent for repairs and maintenance or the cost to rebuild the home does not affect the market value. You can do some research on your own but understand the limits of online property sites, they are notoriously inaccurate, and just because a house down the street sold for a certain amount does not mean it is comparable. Also, neighbors that recently sold are not always truthful (bragging) or are mistaken due to concessions in the transaction. If you speak with several Realtors® and their price estimates differ, that’s not unusual - but be sure to ask how their price opinions were determined and why they think your home would sell for a given value. Ask the Realtor® for pricing information on homes they have recently sold, specifically, what the differences were between their listing prices and how much the homes ultimately sold for. When it comes to a Realtor®'s pricing history, you’re looking for accuracy. Be leary of a Broker that will quote you a recommended sales price without conducting extensive research. Anyone could suggest a high price for your home, knowing it’s what you’d like to hear, but nobody (especially you) wants to have a house languish on the market, or have to reduce the price repeatedly. Some Brokers might quote you a higher price just to get the listing, telling you the price can be lowered later. Pricing your home too high in the beginning will not compete well with the better homes that are priced correctly and will cause your home to stay on the market longer. Buyers will assume something must be wrong with the home since it has not sold in a reasonable time or if the price has been reduced several times - this only invites low-ball offers. Studies have shown if a home is priced properly in the beginning, it is more likely to sell in a shorter period, with less problems during negotiations and ultimately for a higher price. I will always be extremely candid with you about price because it is in your best interests.
Advance preparations are essential! I will recommend items to be addressed before the home is offerred for sale in order to have your home in the best possible condition so it will sell as quickly as possible and for the highest price possible. I know what buyers expect - what they like (and what turns them off). I may suggest correcting any deferred maintenence, completing repairs, addressing safety issues, a fresh coat of interior &/or exterior paint, decluttering and professional staging, possible updates, refresh landscaping to increase curb appeal, just to name a few. Buyers decide to buy with a combination of logic and emotion - we want to create the "WOW" factor. "WOW" when they pull up to the curb, "WOW" when they walk up to the door, "WOW" at every step of the way. I may also suggest a pre-listing inspection by a professional home inspector to uncover other issues to be resolved that will probably be identified by the buyer's inspection during their due diligence period. After the buyer has conducted their due diligence, they will have the opportunity to object to conditions and re-negotiate the transaction - usually asking for repairs to be made before closing, a concession in closing costs or an outright reduction of the sales price. Studies have shown, the amount it will cost you to resolve conditions in advance is about half as much as completing them at the buyer's request during the purchase process.
I will extensively market your home. A large majority of buyers first see photos of the home they eventually buy so it is crucial to have professional photos of a professionally staged, uncluttered, immaculate home. (You never get a second chance to make a first impression.) I will promote and get the word out that your house is on the market, using a combination of old-school (but powerful) marketing techniques — such as direct mail, signage, and open houses — and the modern methods we know and love, like social media. I will post the professional photos of your house on Instagram, Facebook, Twitter, and any other platform that can get likes and the attention of interested buyers. And of course, your listing will be posted in the MLS for all other Brokers that are diligently searching for their buyers and that listing is shared with dozens of popular property websites like Zillow.com and Realtor.com.
Any time you sell a home, you're going to encounter negotiations - and in today's hot housing market, those negotiations are more likely than ever to get a little heated as well. You can expect lots of competition, cutthroat tactics, all-cash offers, and possibly bidding wars. When offers start pouring in, I will negotiate with prospective buyers on not only the sale price but also on what contingencies (aka special circumstances) are attached to the contract. There's a lot more to negotiate besides the price - in fact, virtually everything in a real estate transaction is negotiable - I will offer negotiating techniques that should benefit your situation. With any negotiation, there could be some stressful moments with the buyers - you’ll want a Realtor® like me who can step up for you, and will adjust my negotiation techniques to a style that you’re comfortable with. I will look at every angle from your perspective, including analyzing purchase agreements or crafting counter-offers that represent your best interests. Don't you want a savvy and professional negotiator on your side to seal the best deal for you?
Once you’ve signed a purchase agreement with a buyer (woo-hoo!), I will help you navigate the sale’s remaining steps, including dealing with a multitude of entities (Buyer's Broker, lender, inspectors, appraiser, title/escrow company and more), negotiating home repair requests after the buyer's inspections, helping you resolve any last-minute surprises, ensuring deadlines are met to close on time, keeping you informed at every turn and smoothly escorting you throughout the process all the way to closing.
Selling a home requires dozens of forms, reports, disclosures, and other technical documents. I have the expertise to help you prepare the proper forms and agreements that represent what you want to accomplish, while avoiding delays or costly mistakes. Also, there’s a lot of jargon involved, so you want to work with a professional who can speak the language. Plus, it's not just about how much money your home sells for, there are many other terms and conditions that determine how much you end up netting. I will analyze purchase agreements or prepare counter-offers that allow for inspections, contingencies, documenting closing costs responsibilities and anything else that's crucial to your particular needs.
I am connected to everyone! I might not know everything, but I make it my mission to know just about everyone who can possibly help in the process of selling a home. I am competent and knowledgeable at my job but if I am not experienced or qualified in a certain area (for instance, most Realtors® are not Attorneys), I will disclose that to you and help you seek the expert advice you need. Real estate attorneys, professional home stagers, home inspectors, contractors for repairs, movers—the list goes on—they're all in my network. Use them!
I will be your advocate - I will be honest, loyal and will honor confidentiality as long as it does not violate any laws. I will put transactional details in writing & provide you with copies. I will avoid exaggerating, misrepresenting or concealing known material facts. I get along with other real estate professionals to ensure that your interests and the property are protected. I avoid side deals for compensation without your informed consent, I will not work on a deal where there could be a conflict of interest unless I have disclosed the conflict in writing.
The thing about Realtors® - we wear a lot of different hats. We are your sage parent / data analyst / therapist - all rolled into one! We actually do a whole heck of a lot to earn our commission. On top of handling hundreds of details during the actual complex transaction, we're constantly driving around, checking out listings, learning about changes in neighborhoods. We spend our own money on marketing your home. We're researching comps to make sure you're getting the best deal. And, of course, we're working for you at nearly all hours of the day and night—whether you need more information or just someone to talk to in order to feel at ease with the offer you just received. All in all, you will need a professional to help you through this emotionally and financially taxing process.
The average listing Broker does all of the above. A great listing Realtor® like me does all of the above, while also inspiring your confidence — that I'm putting your home in the best possible light, that I'm representing your best interests, and that I'm getting you the best price.
I am the right Realtor® for you?
I expect you to ask all of these questions! Go ahead, this is no time to be shy!
Here, time is on your side. You should hire me as your very first step, preferably six to eight weeks - or more, before the day your house is listed on the market (also known as the “go-live date”). You’ll be grateful for the cushion, especially if I recommend that you make repairs, declutter or professionally stage your home before it’s listed. (That wouldn’t be unusual.)
- Are you a Realtor®? Not all real estate Brokers are Realtors®. A Realtor® is a Broker who is a member of the National Association of Realtors® (NAR). What difference does it make? Realtors® like me adhere to a strict, higher code of ethics than non-members to treat their clients, customers and other Brokers honestly and fairly.
What services do you offer? Many Realtors® specialize in either representing sellers (Listing Brokers) or representing buyers (Selling or Buyer's Broker). The most experienced, professional Realtors® like me are very adept on either side of the transaction. I am experienced in representing sellers and buyers, or both.
How long have you been in real estate? You're looking for a seasoned Realtor®—and while they don't need decades of experience under their belt, less than a year or two of experience can be concerning. Like most professions, experience is no guarantee of skill, but much of real estate is learned on the job. I have owned and managed residential and commercial rental properties for 18 years, became a licensed NM Realtor® in 2015.
- How long have you lived in this area? One noteworthy exception to the previous question is if they've lived in the area for a long time. A newly licensed Realtor® shouldn't be automatically removed from consideration. If they've lived in the area their entire life, they likely know more about it than a Realtor® who has been in the business for years but only recently moved to the region. Weigh overall experience, including past professions, against local experience when making your decision. I have lived in NM my whole life, attended UNM in the late 70s, raised a family in eastern NM, moved back to Albuquerque in 2010.
- What experience do you have in my immediate area? Most Realtors® have extensive knowledge and experience with the majority of their metro area. You want someone who knows the local and hyper-local inventory. Depending on the specific location of the property, additional issues might need to be addressed such as disclosures and transfer certificates regarding HomeOwner's Associations, Public Improvement Districts, septic systems, private community water memberships and wells. I have helped clients buy and sell in almost every region of the metro area, from Rio Rancho to the east mountains and most areas in between.
- Is real estate your full-time job? What is your schedule? If they're not a full-time Broker, how dedicated to their profession are they? Plus, you need to know when they'll be available, if there are restrictions on when they are able to communicate with you. As an example, how available are they to market and show your home to buyers that are not represented by another Broker? My occupation is 100% full-time Realtor®.
- Do you have a team, or do you work alone? The correct answer depends on you. Would you be more comfortable dealing with one or two known personalities that provide personalized, attentive, hands-on service and communication throughout the transaction? Or would you prefer to have multiple representatives available to assist you that could increase response time and availability if you're okay with not knowing for sure who or what type of personality you'll be dealing with? Many standalone Realtors® are excellent, lots of them have an assistant or a Transaction Coordinator to help with responsibilities like scheduling and communicating with the other Broker, the lender, title company, inspectors, appraisers and more. There is a chance that a standalone Realtor® might be double-booked when you want them but a great Realtor® is used to juggling multiple tasks and will make you a priority when needed by rescheduling the conflict or even asking another Realtor® in their Brokerage to provide occasional assistance. One important factor in choosing your Realtor® should be the ease of communication, that their personality is compatible with your own, someone you have rapport with. You may be tempted to choose a Broker that claims they sold hundreds of homes in the last year or two - while that amount of sales sounds impressive, there is a good chance you will be assigned to one of several less-experienced salespeople working for them on their team. Most people want personalized, attentive, hands-on service and communication from their Broker of choice, the ideal Realtor® for that quality of service will probably handle 8-12 transactions per year. I am a standalone Realtor but affiliated with a large brokerage so I believe I offer the best of both worlds. I make it a point to limit the number of clients I have at any given time in order to ensure I am providing personalized, attentive, 5-star service to my clients.
Which Brokerage are you affiliated with? How could they be an asset? Smaller "boutique" brokerages usually specialize in certain, sometimes narrow, areas of real estate (rental property management, investors, high-end properties, specific commercial clients, etc.) The smaller brokerages can be a good source of hands-on, personalized service if your situation fits their specialty. Even if your Realtor® is not on a team, if they are with a medium to large brokerage can be a great networking resource to tap into for marketing, service provider recommendations and advisory support from other Realtors®. I am affiliated with Realty One of New Mexico, the largest brokerage in the state, with over 800 Brokers which is a tremendous networking asset to match up buyers and sellers, and share lender, contractor, inspector and other service provider contacts.
What type of representation do you provide? There are various forms of representation in different states. In New Mexico, Realtors® have the option of working with their clients/customers as "Agents" or as "Transaction Brokers" - most will choose to act as a Transaction Broker. Generally, Agents have the power to bind or obligate their principals (client/customer) when the Agent is acting within the scope of their agency. For example, an Agent can accept, reject, or counter offers on behalf of their client/customer without additional express, written consent. Transaction Brokers do not have the authority to bind or obligate their client/customer, any general or specific actions on your behalf must be expressly authorized in writing and signed by you. In New Mexico, all Brokers are obligated to perform specified "Broker Duties" to the general public and other Brokers. Brokers owe additional "Broker Duties" to their clients/customers when they are providing real estate services. In addition, Brokers are required to disclose any ownership interest, personal relationship or any other conflicts of interest regarding the property or any entity involved in the process. Your Broker of choice should review these duties and disclosures with you in detail and address any questions or concerns you may have, usually at the first sit-down meeting with an owner or buyer. I work as a transaction Broker, any actions on your behalf will be expressly authorized in writing and signed by you. We will review "Broker Duties" and I will answer all of your questions before you sign any contracts. I will disclose any conflict of interest to you in writing in advance of the transaction.
- Will you represent me exclusively, or might you choose to represent the other party as well? While it’s usually legal to represent both parties in a transaction, your Realtor® should be able to explain his or her philosophy on client obligations and agency relationships. It is possible for a Broker to facilitate a transaction as a neutral party to the seller and buyer in the same transaction, and in some cases different Brokers in a single Brokerge may represent different parties within a transaction. Brokers are required to obtain your written consent in these situations. Be wary of a Listing Broker that does not market your home properly while trying to find a buyer on his own so he can "double-end" the transaction (earn the total commission offered) but be open-minded if the Realtor® does find a buyer that is not represented by another Broker. On occasion, usually with investors, I have represented both parties in a transaction but only if it benefits both buyer and seller and with full disclosure and written consent.
- What is your average list-to-sold price? This is one indication of a Realtor®’s pricing, marketing and negotiating skills. I am a fierce negotiator and work hard to get my clients the best terms possible. On average, my listings sell at 99% of list price with few concessions.
- What is your fee? Brokerage fees (commissions) are established in the marketplace and not set by law or regulation. The Brokerage fee is the Realtor®’s rate for handling your transaction. Your Realtor® should be able to articulate their value and explain their commission rate. While fees are negotiable, if you are able to negotiate a lower fee with a Broker, that may be a reflection of their weak negotiating skills on your behalf during the transaction. If a buyer is represented by another Broker, the Listing Broker will share or split the fee with the Buyer's Broker by virtue of their mutual agreement within their MLS rules. My normal commission for a listing is 6% of the sales price which is in line with the industry, half of that goes to the buyer's Broker. A few times I have accepted less but that was only for simple investor transactions or if I also represented the buyer with full written disclosure to all.
- Are there any other fees I will have to pay? Some Brokers try to include early cancellation fees, marketing fees, MLS fees or other costs that are not included in the commission rate. Be aware - online Brokerages and other "Discount" Brokerages may also charge you for "repairs", "conditions" or other items during the transaction process. Be sure to read your Listing Agreement carefully and ask the Broker about anything you don't understand completely before signing. It is always recommended that you have a real estate attorney review any documents if you have concerns. Other than completing deferred maintenance or repairs, I only ask that you pay for professional staging of the home which is crucial to selling your home quickly and maximizing your net proceeds from the sale. I pay for professional photography and all other marketing costs.
- What is your recommended price for my home? That is the BIG question, right? How do I set the price? The list price of a home is the number one factor that will determine the amount of showings, terms and amount of offers, how quickly the home sells and the final sales price. The short answer is you’ll need to trust me to recommend a smart listing price, but rest assured, helping you get the best price for your home is one of my most important jobs. New Mexico is a non-disclosure state which means the sales price of homes are not public information - but I am a member of the local Multiple Listing Service (MLS) and members share final sales price information with other members. This allows me to analyze recent sales of comparable homes and comparable properties currently on the market to estimate how much buyers are willing to pay. The results will be delivered to you as a written Comparative Market Analysis (CMA) that professionally estimates an accurate market value of your property and establishes a realistic selling price you can expect during negotiations. The final recommended list price may be adjusted after I personally visit your home to verify the selected comparables match your homes quality of construction and current condition. The true market value of a home is determined by how much a buyer will pay! What you paid when you bought the home plus the amount you spent for repairs and maintenance or the cost to rebuild the home does not affect the market value. You can do some research on your own but understand the limits of online property sites, they are notoriously inaccurate, and just because a house down the street sold for a certain amount does not mean it is comparable. Also, neighbors that recently sold are not always truthful (bragging) or are mistaken due to concessions in the transaction. If you speak with several Realtors® and their price estimates differ, that’s not unusual - but be sure to ask how their price opinions were determined and why they think your home would sell for a given value. Be leary of a Broker that will quote you a recommended sales price without conducting extensive research. Anyone could suggest a high price for your home, knowing it’s what you’d like to hear, but nobody (especially you) wants to have a house languish on the market, or have to reduce the price repeatedly. Some Brokers might quote you a higher price just to get the listing, telling you the price can be lowered later. Pricing your home too high in the beginning will not compete well with the better homes that are priced correctly and will cause your home to stay on the market longer. Buyers will assume something must be wrong with the home since it has not sold in a reasonable time or if the price has been reduced several times - this only invites low-ball offers. Studies have shown if a home is priced properly in the beginning, it is more likely to sell in a shorter period, with less problems during negotiations and ultimately for a higher price. I will always be extremely candid with you about price because it is in your best interests.
- How will you market my home? The days of simply putting a sign in the yard and posting in the MLS are long gone. Every Realtor® should present a comprehensive marketing plan for your listing, what marketing strategies have worked in the past and which marketing efforts may be effective for your home. A large majority of buyers first see online photos of the home they eventually buy so it is crucial to have quality, professional photos of an uncluttered, professionally staged, immaculate home. (You never get a second chance to make a first impression.) I will promote and get the word out that your house is on the market, using a combination of old-school (but powerful) marketing techniques — such as direct mail, signage, and scheduling open houses — and the modern methods we know and love, like social media. I will post the professional photos of your house on Instagram, Facebook, Twitter, and any other platform that can get likes and the attention of interested buyers. I will also take advantage of the tremendous networking tool at my disposal - direct emails and Facebook posts to over 800 Brokers with my Brokerage, Realty One of New Mexico, the largest Brokerage in our state. And of course, your listing will be posted in the MLS for all other Brokers that are diligently searching for their buyers and that listing is shared with dozens of popular property websites like Zillow.com and Realtor.com.
- How long are homes similar to mine in this neighborhood typically on the market? Be aware that because all homes are unique, some will sell faster than others. Several factors can impact the amount of time a home remains on the market such as condition, staging, presentation, if showing times are readily available, changing interest rates and local economic trends. The most important factor is list price!
- What disclosures should I expect to provide/receive? Depending on the location and details of the property, many disclosures are required including, but not limited to, a Seller's Property Disclosure, property tax estimate, previous inspections, others related to property use history, possibly lead-based paint, Kitec/Poly plumbing, septic and well, and if the property is located in a HomeOwner's Association or Public Improvement District. In New Mexico, all Brokers are obligated to disclose and perform specified "Broker Duties" to the general public and other Brokers, plus additional "Broker Duties" to their clients/customers. Brokers are also required to disclose any conflicts of interest. I will assist you to provide the necessary disclosures from you and include them in the MLS listing as appropriate. I will also provide all necessary disclosures from me and I will help you understand the repercussions of any other disclosures you may receive.
How will you keep me informed about the progress of my transaction? The best answer here is a question I will ask you. Effective communication is essential - a Realtor® who pays close attention to the way you prefer to communicate and responds accordingly will make for the smoothest transaction. Some clients prefer emails or texts while others only want to be called or have in-person meetings. Whatever your preference, it is best to outline those expectations upfront so everyone is working with clearly-defined objectives. Once your home is listed, I will immediately begin to market your home - keeping you informed as the marketing process unfolds - providing frequency of showings, forwarding feedback by buyers and brokers from previous showings, providing notification and analysis when offers are received, communicating negotiations, advising on deadlines and contingency resolutions throughout the process. I am very adept at all forms of communication and will provide the most effective communication that works best for you.
- Can you recommend service providers such as attorneys, inspectors, professional stagers, repair companies, movers, and so on? Realtors® should be able to recommend a choice of providers for you to interview and the Realtor® should let you know if they have any special relationship or conflict of interest with any of the providers. I have an extensive list of service providers at your disposal. The network of over 800 brokers with Realty One of New Mexico can also be a tremendous resource if we encounter any additional needs.
- Could you please give me the contact information of your three most recent clients? Ask the Realtor®'s former clients if they would use the Realtor® again in the future. If they will discuss their transaction you can determine if their circumstances match with yours. I will gladly provide contact information from previous clients upon request.
The bottom-line: It’s in your best interest to pick a Realtor® who understands your goals, fits your personality, and can professionally help you sell your home for top dollar. When we meet and you discover I offer all of the above, congratulations — you’ve found your Realtor®.
Know What You’re Signing up For
Now that you know what you’re getting when you hire me, you need to know what you’re committing to when you sign the “Listing Agreement”.
Before presenting the Listing Agreement, I will extensively review my "Broker Duties" with you and answer any questions you may have. I use the most common type of Listing Agreement — the Exclusive Right-to-Sell Agreement — a legally binding contract that states you’re going to use me to sell your home. Under this agreement, you’re giving me (and my Brokerage) the right to sell your home for a mutually agreed-upon time period and compensation. There are other types of Listing Agreements, where Realtors® don’t have exclusive rights to sell the property — meaning multiple Realtors® can try to sell the home and compete for the commission — however, when I know a listing is exclusively mine, I am fully invested and totally motivated to sell your property. Keep in mind, I will have invested a tremendous amount of time and energy, plus I will have numerous expenses (marketing, professional photos, etc.) while the home is listed that will not be reimbursed if the home does not sell. I get peace of mind that you’re only using my services; you get peace of mind that you have an experienced, dedicated Realtor® looking out for your best interests.
Realtors® may choose to provide represention as an "Agent" or a "Transaction Broker" (see definitions below). I prefer to work as a Transaction Broker where any general or specific actions on your behalf must be expressly authorized in writing and signed by you.
Every contract has an expiration date, but the length of the contract can vary. Some are three-months; others six months — it all depends on your circumstances and what we agree upon. Although I plan on selling your home quickly, we don't know what external forces may be a factor (economy, etc.), my normal agreement term is six months. If our agreement expires before your house is sold, you can re-list your home with me or another another Realtor®.
There are many other provisions in the agreement that we will review extensively so I can answer all of your questions and address any concerns.
Understand How a Listing Broker Gets Paid
So . . . at the end of the day, how do I get compensated for my work?
My commission is charged as a percentage of the home’s sales price, to be paid from your proceeds when the transaction closes. Brokerage fees (commissions) are established in the marketplace and not set by law or regulation. While fees are negotiable, if you are able to negotiate a lower fee with a Broker, that may be a reflection of their weak negotiating skills on your behalf during the transaction. The Brokerage fee is my rate for handling your transaction. For example, on a $300,000 house, a 6% commission would be $18,000. I know I will provide you with a wealth of experience and tremendous value to guide you smoothly through your transaction. The commission is usually split between me and the Buyer’s Broker as well as our respective Brokerages. My share of the commission often covers the cost of professional photos, marketing materials, promotional expenses, and any administrative fees charged by my Brokerage.
Important note: If I find a qualified buyer that is not represented by another Broker and you accept their offer, I will earn both sides of the commission. I will obtain your written consent in this situation. Keep in mind that I will facilitate the transaction as a neutral party to both you and buyer, although I will still owe you confidentiality and the duty to sell your home for the highest price possible.
With all our market knowledge, dedication, HGTV-worthy staging tricks, negotiating skills, marketing expertise and committment to serve your needs — Great Realtors® like me earn our keep!
So, if you’ve read all of the above, I think you will agree that I am a great Realtor®. Now we’re ready to sell that house!
One thing you might notice while trying to find help is all the different titles: Agent, Broker, Realtor®, etc. Are they all the same thing? Not exactly. In New Mexico, all licensed real estate professionals are Brokers - either Associate Brokers (AB) or Qualifying Brokers (QB). All Brokers are self-employed individuals who hold a valid license issued by the NM Real Estate Commission, which requires initially passing an extensive state exam, undergoing a background check, paying application and renewal fees, maintaining errors & ommissions insurance and perpetually fulfilling Continuing Education requirements. Brokers also pay MLS membership fees, national and local association dues and Brokerage fees. As self-employed contractors, they also have a wide variety of additional expenses such as secretarial and Transaction Coordinator services, office space expenses, office supplies, transportation, marketing for themselves or clients - plus any other expenses associated with conducting their business such as paying their own federal and state income taxes, social security tax and health insurance.
Realtor® is a Broker who can only call themselves a Realtor® if they belong to the National Association of Realtors® (NAR), one of the the largest and oldest profession trade groups in the US. When they join NAR, the Realtor® commits to being held to a higher ethical standard and must adhere to a strict Code of Ethics. Not all Brokers are Realtors®. What difference does it make? Realtors® higher code of ethics means they agree to treat their clients, customers and other Brokers honestly and fairly. Consider it added insurance that they're more professional and committed to your cause.
Associate Brokers (AB) are by far the most common professionals providing real estate services in New Mexico. Many ABs specialize in either representing sellers (Listing Brokers) or representing buyers (Selling or Buyer's Broker). The most experienced, professional Brokers are very adept on either side of the transaction, representing sellers or buyers, or both. While Brokers have the option of working with their clients/customers as Agents or as Transaction Brokers, most will choose to act as a Transaction Broker.
Agent is a Broker who chooses to work with clients by entering into an agency relationship agreement. In this instance, a Broker acting as an Agent owes fiduciary duties (in its simplest form: obedience, loyalty, disclosure, confidentiality, accounting, reasonable care). Generally, Agents have the power to bind or obligate their principals (client/customer) when the Agent is acting within the scope of their agency. As an example, an Agent can accept, reject, or counter offers on behalf of their client/customer without additional express, written consent.
Transaction Brokers owe 'Broker Duties' to their clients, customers and other Brokers, as defined by the NM Real Estate Commission, which in most instances, are better defined than fiduciary duties. Transaction Brokers do not have the authority to bind or obligate their client/customer. Any general or specific actions on your behalf must be expressly authorized in writing and signed by you.
Qualifying Broker (QB) (sometimes referred to as a Designated Broker) is someone with a minimum number of years, transactions and additional hours of Continuing Education, plus they pay additional fees to maintain their license. QBs are usually managers, they run a Brokerage and have Associate Brokers working under them. Most QBs only work a limited number of transactions personally, the bulk of their efforts are directed toward Brokerage management and supervising ABs.
Brokerage is an organization (either a company or an individual) that contracts with Brokers to provide real estate services to the public. The brokerage provides support, training and some marketing. They usually charge the Broker a percentage of the sales price or a flat fee upon successful completion of a transaction.
About the typical Realtor®
First, we need to dispel stereotypes perpetuated by REALITY TV:
- Realtors® only work a few hours a day to make millions a year.
- Buyers find the perfect house after visiting just three homes—and write an offer that is accepted immediately and move in within a day or two.
Nothing could be further from the truth.
- Realtors® typically help their buyers search for about 12 weeks and look at about 10 properties before selecting a home, according to the National Association of Realtors®. The average house sale takes about 30 to 45 days to close. The Realtor® is only paid once the sale has closed, so they can work five to six months before they are compensated. And that’s only true if the buyer finds a home. If the buyer decides not to buy, or to switch Brokers, a Realtor® could work for several months for no pay. The same is true of listings. If the house listing does not sell, or if the seller cancels the contract to select another Broker, a Realtor® is not compensated.
- The reality is that the average Realtor® in the US earned $47,700 in 2013, according to the National Association of Realtors®. Selling real estate is a commission-only business. Realtors® can work with a buyer or seller for months without ever making a commission. Deals fall though and not every listing sells. It’s a business run on trust and faith.
- When you see the commission on the closing statement, your Realtor® doesn’t walk away with all of it. The commission you see is split. Associate Brokers work for Qualifying Brokers. The commission check is made payable to the Brokerage which then cuts a check to the Listing Broker and the Buyer's Broker. Both Associate Brokers also must pay a fee or percentage of their earnings to their Qualifying Broker. If you’re working with a Qualifying Broker, they may also have to split commission with their team that helped on the back end.
- Since they are self-employed independent contractors, both Qualifying Brokers and Associate Brokers also have a wide variety of additional expenses such as license and MLS fees, membership dues, professional/office/auto insurance, Continuing Education expenses, secretarial/Transaction Coordinator services, office space expenses, office supplies, transportation, marketing for themselves or clients - plus any other expenses associated with conducting their business such as paying their own federal and state income taxes, social security tax and health insurance.
So, for a typical real estate transaction, the commission is divided four ways, then business expenses are subtracted and the government gets their due. Rather than making millions, most Realtors® work very hard to just earn a decent, middle-class living.