Insider Guide to Real Estate Transactions - Part 3

Brokers, Agents, Realtors®

Part 3: AGENTS, BROKERS and REALTORS® - What's the Difference?

In order to broker properties or businesses in any US state, one has to be properly licensed in that state, either as a real estate broker or a real estate agent. Agents have to pass one, brokers two state exams. In Florida, both licenses must be renewed every two years through a short exam. An agent always work in a broker's office under his/her supervision. A broker may work for another broker or self-employed. All real estate professions in Florida are regulated and supervised by two state authorities.

OTHER QUALIFICATIONS

When you consider buying or selling US property - residential property or commercial investment - in practically all situations you should be using an agent or broker to represent your interests in the transaction. He/she should:

• have a valid Real Estate license for the state (s)he operates in
• for residential transactions be a Member of the local Board of Realtors®
• be well-versed in the property type or style you consider, and in international transactions if applicable

An agent (following for agent or broker) may call himself a Realtor® only if he (following for he or she) belongs to the local Board of Realtors®, a voluntary professional association with strict business and ethical guidelines that often exceed state law.

As the graphic on the left hopefully clarifies: all brokers and agents are licensed, but only some licensees are Realtors©. Many commercial practitioners for example don't need a Board membership or benefit from one, so they don't belong.

For residential agents, membership in the Board of Realtors® is the only way for full access with selling and listing privileges in a proprietary regional property database called Multiple Listing Service or MLS. This database may contain 95-98 percent of all regional residential properties for sale, as well as some commercial properties also offered by MLS participants.

The Southeast-Florida-MLS for example, consisting of several Boards and their MLS databases, and reaching from Homestead to Fort Pierce, connects over 85,000 agents with over 80,000 properties and businesses for sale.

As a result, buyers can (and should!) avoid agent-shopping and instead concentrate on working with one agent who can offer and sell any property shown in the MLS, not only the ones offered by his own firm. More on loyalty further below.

HOW TO PICK A GOOD AGENT

The sheer number of Realtors in South Florida can be overwhelming, and it may seem everyone you know has a license and wants your business. But your choice of an agent should be guided by other criteria than being a neighbor or golf buddy: by the level of competence in his/her specialty, by how well you communicate, ideally by past client references, and certainly by a feeling of trust and confidence.

You don’t have to become best friends for life or be smitten at first sight, but if you don't like an agent, for the sake of a harmonious transaction it sure is better to chose another one to work with and remain loyal to your choice.

You expect commitment from your agent to find the best deal and prevent you from making mistakes, and your agent in return has the right to expect commitment and loyalty from you, the client.

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Commercial Realtor (red) and CIPS logos

Important is that your agent is experienced in like transactions and knows what you are expecting. He should explain the terminology to you in plain language and guide you through the sequence of a deal.

If there is an international or a commercial aspect, you will only be served well by an agent who is certified as a CIPS (Certified International Property Specialist) or by someone experienced in commercial transactions. E.g., a residential condo expert dabbling in commercial real estate is a recipe for a disaster, and the client is paying the price.

Any questions on this chapter? Want to read the whole guide in one session? Then please contact Tobias. He will be delighted to hear from you.
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©Tobias Kaiser. Use or reproduction only with written permission from the author.

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