FTC Offers Tips on Selecting a Real Estate Professional

Must Read Guide for Real Estate Newbies

First-time buyers or sellers of real estate frequently can't see the forest for the trees says Uncle Sam, aka the United States Government. To help take the mystery out of real estate deals, the government recently released an informative booklet designed to shepherd the real estate novice through the oft confusing process of buying or selling a home.

Authored by the Federal Trade Commission, the Federal Government's consumer watchdog agency, the pamphlet itself is surprisingly brief and to the point. Entitled "Selling Your Home? Tips for Selecting a Real Estate Professional", this PDF document tips the scales at just four pages. Despite its brevity, this quick read still presents concise, useful information that can benefit first-time buyers or sellers of property.

The pamphlet's main focus is on presenting the ins and outs of dealing with a real estate broker or agent. Although the distinction between a broker and and agent may seem like an exceedingly fine distinction to some, the FTC makes the point that it's still a distinction worth understanding.

Real estate brokers and real estate agents are both licensed professionals who assist sellers and prospective buyers of homes. Real estate agents, however, work under the supervision of a real estate broker. Commissions earned from the sale or purchase of real estate go to the real estate broker, who in turn pays the agent part of the commission.

Real estate brokers fall into two main categories.

Traditional, or full-service brokers, offer a complete palette of services that range from preparing a property for sale and recommending an asking price to advertising the home, setting up meetings and negotiating with prospective buyers, arranging home inspections, and handling the many details associated with closing the transaction.

Non-traditional, or discount brokers, offer many of the same services as their full-service counterparts, but do so on a so-called "a la carte" basis. To belabor the restaurant metaphor a bit more, you choose from a menu of services you want the broker to perform and pay accordingly, usually in the form of a flat fee or reduced commission rate.

An important point to remember is that the fewer services you choose, the more work you'll have to do on your own to sell your home or property. For example, if your go with a discount broker for the sole purpose of listing your home with your local Multiple Listing Service, or MLS, you'll have to handle things like advertising, open houses, negotiating with potential buyers, and closing the sale.

Of course, understanding the difference between real estate brokers and agents is only the tip of the iceberg when it comes to understanding the real estate game. Here, too, "Selling Your Home? Tips for Selecting a Real Estate Professional" doesn't fall short in explaining some of the more decisive aspects of interacting with a broker or agent. The booklet is particularly strong in its advice on finding and interviewing an agent, negotiating commissions and explaining the two basic kinds of listing contracts you can enter into with a real estate broker or agent. You can read the rest of the pamphlet at ftc-dot-gov-slash-credit.

Make sure you interview several real estate brokers or agents before deciding to list your home. To find a broker or agent, talk to friends or neighbors who have recently bought or sold homes or check your local or online yellow pages for a list of real estate professionals in your area.

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