You might have noticed the word REALTOR® with that little circled “R” all around the Exact Home Team site. And you might be scratching your head, thinking to yourself, When did the word “realtor” become a registered trademark?
Let’s explore the difference between a REALTOR® and a real estate agent as well as why you’d want to use a REALTOR® when buying a home.
In Washington state, a real estate agent is a licensed professional who is at least 18 years old, has a high school diploma or equivalent, has completed 90 hours of approved real estate education, and has passed the broker’s exam. A real estate agent can help you understand everything you need to know about the home buying and selling process and can facilitate the transactions.
However, not all real estate licensees are the same. A real estate agent is only called a REALTOR® when they become a member of the National Association of REALTORS® (NAR), which was founded in 1908 and has more than 1.4 million members. REALTORS® have more real estate specific education than non-REALTORS®, and they adhere to a specific Code of Ethics and Standards of Practice. REALTORS® are committed to treat all parties to a transaction honestly. They are expected to maintain a higher level of knowledge of the process of buying and selling real estate.
Remember, real estate transactions involve one of the biggest financial investments of most people’s lifetime. Transactions today usually exceed $500,000. If you had a $500,000 income tax problem, would you try to handle it with a banker, or would you ask for help from a Certified Professional Accountant? Considering the small upside cost and the large downside risk, it would be wise to work with a professional REALTOR® when you are buying a home.
If you’re still not convinced of the value of a REALTOR®, I have a few more reasons to share.
- They can help you determine your buying power—that is, your financial reserves plus your borrowing capacity. They can refer you to lenders best qualified to help you. Most lenders, such as banks and mortgage companies, offer limited choices.
- Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your REALTOR® to find all available properties.
- A REALTOR® can provide assistance in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. They can provide local community information on utilities, zoning, schools, etc. And they can answer two important questions: Will the property provide the environment I want for a home or investment, and will the property have resale value when I am ready to sell?
- They can help you with negotiations and inspections. There are many negotiating points, including but not limited to price, financing, terms, date of possession, and often the inclusion or exclusion of repairs and furnishings or appliances. The purchase agreement should allow time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your REALTOR® can advise you as to which investigations and inspections are recommended or required.
- A REALTOR® can provide due diligence during the property evaluation. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, and septic tank and well tests—just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. In addition, you will want to see a preliminary report on the property title. (Title indicates ownership of property and can be mired in confusing status of past owners or rights of access.) The title to most properties will have some limitations, such as easements (access rights) for utilities. Your REALTOR® can help you resolve issues that might cause problems at a later date.
- REALTORS® can explain and identify qualified lenders. I’ve provided a list of recommended lenders on our Recommendations page and would be happy to discuss any of them with you.