The REALTOR®’S Critical Role in the Real Estate Transaction

Why Was This List Prepared?

Surveys show that many homeowners and home buyers are not aware of the true value they receive in the services a REALTOR® provides during the course of a Real Estate transaction.

At the same time, regrettably, REALTORS® have generally assumed that the expertise,
professional knowledge and just plain hard work that go into bringing about a successful
transaction were understood and appreciated.

Many of the most important services and steps are performed “behind the scenes” by
either the REALTOR® or the brokerage staff and have been traditionally viewed simply
as part of their professional responsibilities to their client. But, without them, the
transaction could be placed in jeopardy.

This publication seeks to close that gap.

Listed on the following pages are nearly 200 typical actions, research steps, processes
and review stages necessary for a successful residential real estate transaction and
normally provided by a full service real estate brokerage and for which they are entitled
to fair compensation.

Completeness of the List:
The list is by no means an attempt to set forth a complete list of services as these may
vary within each brokerage and each market. Many REALTORS® routinely provide a
wide variety of additional services that are as varied as the nature of each transaction.
By the same token, some transactions may not require some of the steps to be successful. However, most would agree that given the unexpected complications that can arise, it’s far better to know about a step and make an intelligent, informed decision that it is not needed, than to not know the possibility even existed.

The REALTOR® Commitment:
Through it all, the REALTOR®’S personal and professional commitment is to ensure that a seller and buyer are brought together in an agreement that provides each of them a
“win” that is fair and equitable. Their motivation is easy to understand. For most full-service brokerages, there is no compensation unless and until the sale closes.
By contrast, there are firms that offer “limited-services” in exchange for either an upfront
flat fee or perhaps offer a menu of pay-as-you-go or “a la’ carte” services. Some
even offer a sliding scale from limited to full service. In these cases, the REALTOR®’S
compensation is based on the level of service they provide. In short, it’s the age-old
market adage that “you get what you pay for.”

A Variety of Choices:
It can truly be said the variety of brokerage business models in today’s real estate
industry affords the homeowner a greater range of options than ever before.
But no matter which option homeowners choose, before signing a Listing Agreement or
otherwise engaging the services of a REALTOR® and agreeing to compensate them,
they should understand exactly what specific services will, or will not, be provided.

Why Use A REALTOR®?
First, not every real estate agent or broker is a REALTOR®. That term and the familiar Block “R” logo are trademarked by the National Association of REALTORS® and can only be used by those are REALTOR® members through their local association of REALTORS®.

While all REALTORS® are state-issued licenses as agents or brokers, the major difference between a “real estate licensee” and a REALTOR® is that REALTORS® have taken an oath to subscribe to a stringent, enforceable Code of Ethics with Standards of Practice that promote the fair, ethical and honest treatment of all parties in a transaction. Non-member licensees have taken no such oath and are not morally bound to the ethical practices and principles set for in the REALTOR® Code.

The REALTOR®’S Critical Role in the Transaction
Listed here are the nearly 200 typical actions, research steps, procedures, processes and review stages in a successful residential real estate transaction that are normally provided by full service real estate brokerages in return for their sales commission. Depending on the transaction, some may take minutes, hours, or even days to complete, while some may not be needed. More importantly, they reflect the level of skill, knowledge and attention to detail required in today’s real estate transaction, underscoring the importance of having help and guidance from someone who fully understands the process – a REALTOR®.

And never forget that REALTORS® are pledged to uphold the stringent, enforceable tenets of the REALTOR® Code of Ethics in their professional dealings with the public. Not every real estate licensee holds REALTOR® membership. Make sure yours does!

Pre-Listing Activities

Make appointment with seller for listing presentation
Send seller a written or e-mail confirmation of listing appointment and call to confirm
Review pre-appointment questions
Research all comparable currently listed properties
Research sales activity for past 18 months from MLS and public records databases
Research "Average Days on Market" for this property of this type, price range and location
Download and review property tax roll information
Prepare "Comparable Market Analysis" (CMA) to establish fair market value
Obtain copy of subdivision plat/complex lay-out
Research property's ownership & deed type
Research property's public record information for lot size & dimensions
Research and verify legal description
Research property's land use coding and deed restrictions
Research property's current use and zoning
Verify legal names of owner(s) in county's public property records
Prepare listing presentation package with above materials
Perform exterior "Curb Appeal Assessment" of subject property
Compile and assemble formal file on property
Confirm current public schools and explain impact of schools on market value
Review listing appointment checklist to ensure all steps and actions have been completed

Listing Appointment Presentation

Give seller an overview of current market conditions and projections
Review agent's and company's credentials and accomplishments in the market
Present company's profile and position or "niche" in the marketplace
Present CMA Results To Seller, including Comparable's, Sold's, Current Listings & Expired’s
Offer pricing strategy based on professional judgment and interpretation of current market
conditions
Discuss Goals With Seller To Market Effectively
Explain market power and benefits of Multiple Listing Service
Explain market power of IDX and REALTOR.com
Explain the work the brokerage and agent do "behind the scenes" and agent's
availability on weekends
Explain agent's role in taking all calls to screen for qualified buyers and protect seller
from curiosity seekers
Present and discuss strategic master marketing plan
Explain different agency relationships and determine seller's preference
Review and explain all clauses in Listing Contract & Addendum and obtain seller's signature

Once Property is Under Listing Agreement

Review current title information
Measure overall and heated square footage
Measure interior room sizes
Confirm lot size via owner's copy of certified survey, if available
Note any and all unrecorded property lines, agreements, easements
Obtain house plans, if applicable and available
Review house plans and make copy
Order plat map for retention in property's listing file
Prepare showing instructions for buyers' agents and agree on
showing time window with seller
Obtain current mortgage loan(s) information: companies and & loan account numbers
Verify current loan information with lender(s)
Check assumability of loan(s) and any special requirements
Discuss possible buyer financing alternatives and options with seller
Review current appraisal if available
Identify Home Owner Association manager if applicable
Verify Home Owner Association Fees with manager - mandatory or optional
and current annual fee
Order copy of Homeowner Association bylaws, if applicable
Research electricity availability and supplier's name and phone number
Calculate average utility usage from last 12 months of bills
Research and verify city sewer/septic tank system
Water System: Calculate average water fees or rates from last 12 months of bills )
Well Water: Confirm well status, depth and output from Well Report
Natural Gas: Research/verify availability and supplier's name and phone number
Verify security system, current term of service and whether owned or leased
Verify if seller has transferable Termite Bond
Ascertain need for lead-based paint disclosure
Prepare detailed list of property amenities and assess market impact
Prepare detailed list of property's "Inclusions & Conveyances with Sale"
Compile list of completed repairs and maintenance items
Send "Vacancy Checklist" to seller if property is vacant
Explain benefits of Home Owner Warranty to seller
Assist sellers with completion and submission of Home Owner Warranty Application
When received, place Home Owner Warranty in property file for
conveyance at time of sale
Have extra key made for lockbox
Verify if property has rental units involved. And if so:
* Make copies of all leases for retention in listing file
* Verify all rents & deposits
* Inform tenants of listing and discuss how showings will be handled
Arrange for installation of yard sign
Assist seller with completion of Seller's Disclosure form
"New Listing Checklist" Completed
Review results of Curb Appeal Assessment with seller and provide suggestions
to improve salability
Review results of Interior Décor Assessment and suggest changes
to shorten time on market
Assign Transaction Desk login and password for sellers to check progress
Entering Property in Multiple Listing Service Database

Prepare MLS Property Profile Sheet -- Agents is responsible for "quality control" and accuracy of listing data
Enter property data from Profile Sheet into MLS Listing Database
Proofread MLS database listing for accuracy - including proper placement in mapping function
Add property to company's Active Listings list
Provide seller with signed copies of Listing Agreement and MLS Profile Sheet Data
Entry Form within 48 hours

Take additional photos for upload into MLS and use in flyers. Discuss efficacy
of panoramic photography

Marketing The Listing

Create print and Internet ads with seller's input

Coordinate showings with owners, tenants, and other Realtors®.

Return calls, (weekends Included)

Install electronic lock box if authorized by owner and program with agreed-upon
showing time windows
Prepare mailing and contact list
Generate mail-merge letters to contact list
Order “Just Listed” labels & reports
Prepare flyers & feedback faxes
Review comparable MLS listings regularly to ensure property remains
competitive in price, terms, conditions and availability
Prepare property marketing brochure for seller's review
Arrange for printing or copying of supply of marketing brochures or fliers
Place marketing brochures in all company agent mail boxes
Upload listing to company and agent Internet site, if applicable

Mail Out "Just Listed" notice to all neighborhood residents
Advise Network Referral Program of listing
Provide marketing data to buyers coming through
international relocation networks

Provide marketing data to buyers coming from referral network
Provide "Special Feature" cards for marketing, if applicable
Submit ads to company's participating Internet real estate sites
Price changes conveyed promptly to all Internet groups
Reprint/supply brochures promptly as needed
Loan information reviewed and updated in MLS as required
Feedback e-mails/faxes sent to buyers' agents after showings
Review weekly Market Study
Discuss feedback from showing agents with seller to determine
if changes will accelerate the sale
Place regular weekly update calls to seller to discuss marketing & pricing
Promptly enter price changes in MLS listing database

The Offer and Contract

Receive and review all Offer to Purchase contracts submitted by
buyers or buyer's agents.

Evaluate offer(s) and prepare a "net sheet" on each for the owner
for comparison purposes
Counsel seller on offers. Explain merits and weakness of each component of each offer
Contact buyers' agents to review buyer's qualifications and discuss offer
Fax or deliver Seller's Disclosure form to buyer's agent or buyer (upon request
and prior to offer being made if possible)
Confirm buyer is pre-qualified by calling Loan Officer
Obtain pre-qualification letter on buyer from Loan Officer
Negotiate all offers on seller's behalf, setting time limit
for loan approval and closing date
Prepare and convey any counteroffers, acceptance or amendments to buyer's agent
Fax copies of contract and all addendums to closing attorney or title company
When an Offer to Purchase Contract is accepted and signed by seller,
deliver signed offer to buyer's agent
Record and promptly deposit buyer's earnest money in escrow account.
Disseminate "Under-Contract Showing Restrictions" as seller requests
Deliver copies of fully signed Offer to Purchase contract to seller
Fax/deliver copies of Offer to Purchase contract to Selling Agent
Fax copies of Offer to Purchase contract to lender
Provide copies of signed Offer to Purchase contract for office file
Advise seller in handling any additional offers to purchase that may be
submitted between contract and closing
Change status in MLS to "Sale Pending"
Update Transaction Desk to show "Sale Pending"
Review buyer's credit report results -- Advise seller of worst and best case scenarios
Provide credit report information to seller if property will be seller-financed
Assist buyer with obtaining financing, if applicable and follow-up as necessary
Coordinate with lender on Discount Points being locked in with dates
Deliver unrecorded property information to buyer
Order septic system inspection, if applicable
Receive and review septic system report and assess any possible impact on sale
Deliver copy of septic system inspection report lender & buyer
Deliver Well Flow Test Report copies to lender & buyer and property listing file
Verify termite inspection ordered
Verify mold inspection ordered, if required
Tracking the Loan Process
Confirm Verifications Of Deposit & Buyer's Employment Have Been Returned
Follow Loan Processing Through To The Underwriter
Add lender and other service vendors to Transaction Desk so agents,
buyer and seller can track progress of sale
Contact lender weekly to ensure processing is on track
Relay final approval of buyer's loan application to seller
Home Inspection
Coordinate buyer's professional home inspection with seller
Review home inspector's report
Enter completion into Transaction Desk
Explain seller's responsibilities with respect to loan limits
and interpret any clauses in the contract
Ensure seller's compliance with Home Inspection Clause requirements
Recommend or assist seller with identifying and negotiating with trustworthy contractors to
perform any required repairs
Negotiate payment and oversee completion of all required repairs on seller's behalf, if needed
Schedule The Appraisal
Provide comparable sales used in market pricing to Appraiser If Needed
Follow-Up On Appraisal
& Enter completion into Transaction Desk

Assist seller in questioning appraisal report if it seems too low
Closing Preparations and Duties
Contract Is Signed By All Parties/Fully Executed
Coordinate closing process with buyer's agent and lender
Update closing forms & files
Ensure all parties have all forms and information needed to close the sale
Select location where closing will be held
Confirm closing date and time and notify all parties
Assist in solving any title problems (boundary disputes, easements, etc)
or in obtaining Death Certificates
Work with buyer's agent in scheduling and conducting buyer's
Final Walk-Thru prior to closing
Research all tax, HOA, utility and other applicable prorations
Request final closing figures from closing agent (attorney or title company)
Receive & carefully review closing figures to ensure accuracy of preparation
Forward verified closing figures to buyer's agent
Request copy of closing documents from closing agent
Confirm buyer and buyer's agent have received title insurance commitment
Provide "Home Owners Warranty" for availability at closing
Reviews all closing documents carefully for errors
Forward closing documents to absentee seller as requested
Review documents with closing agent (attorney)
Provide earnest money deposit check from escrow account to closing agent
Coordinate this closing with seller's next purchase and resolve any timing problems
Have a "no surprises" closing and present seller a net proceeds check at closing
Refer sellers to one of the best agents at their destination, if applicable
Change MLS listing status to Sold. Enter sale date and price,
selling broker and agent's ID numbers, etc.
Close out listing in Programs Required

Follow Up After Closing

Answer questions about filing claims with Home Owner Warranty company if requested
Attempt to clarify and resolve any conflicts about repairs if buyer is not satisfied
Respond to any follow-on calls and provide any additional information required from office files.