What is a Realtor?

You have been shopping for that perfect home, and you noticed that some of the business cards you have been collecting say Realtor while some do not. So, what is a Realtor?

A Realtor is a member of the National Association of Realtors or one of its sub-organizations. The National Association of Realtors is a professional organization made up of people in the various sub-specialties of real estate sales, appraisal, or management, with local chapters all over the globe.

According to the National Association of Realtors Web site, "The core purpose of the NATIONAL ASSOCIATION OF REALTORS is to help its members become more profitable and successful."

A member of the National Association of Realtors is expected to abide by a very stringent code of ethics. The NAR site simplifies their nine page code of ethics into a set of underlying principles which "can be loosely defined as:

1. Loyalty to clients;
2. Fiduciary (legal) duty to clients;
3. Cooperation with competitors;
4. Truthfulness in statements and advertising; and non-interference in exclusive relationships that other REALTORS have with their clients."

Most states have codified two of those principles into their real estate licensing laws, specifically the fiduciary duty to clients and the truthfulness in statements in advertising.

Do not confuse someone with the designation of Realtor with someone with a real estate license. While most Realtors hold a real estate license, not all real estate license holders belong to the National Association of Realtors, or subscribe to its code of ethics.

Photography and Real Estate Sales

One of the most critical elements for preparing any effective real estate marketing effort is pictures. Home buyers want to ‘shop around’ using the pictures they’ve seen, even if they have seen the actual house; and many buyers won’t even consider looking at a house if there are not any ‘pre-view’ pictures available. Attractive pictures will help get a “SOLD” sign on the home quicker, make the client happy, and put a commission in the agent’s pocket.

Here are five quick tips for getting attractive pictures to include in your marketing campaign to get that home sold.

1) Get a decent digital camera. You’re in a profession with high dollar stakes involved, and the images you use should reflect that. You do not need to invest thousands of dollars in a high-end SLR camera; however, your camera phone just doesn’t cut it to take professional-grade photographs. Purchase a decent camera that takes shots with at least 5.1 megapixel capability, with storage cards for easy ‘reloading.’

2) Take a lot of pictures. And I mean a lot. Hundreds if necessary. Try them with and without the flash. Take pictures from a variety of angles, even if it means just moving a few inches over. There’s no additional cost involved if you bought the right camera in choosing which pictures to use, so give yourself plenty to choose from.

3) Only take outside pictures on a sunny day. Outdoor shots should be bright and cheerful, not with the sky dark and gloomy. Wait a few days, the weather will change, and you can do the outside shots at any time of the day – but make sure you do so when the sun will be behind you, and make sure your shadow isn’t showing in the pictures!

4) Use your flash unit sparingly, if possible. The glare that can come off of surfaces you hadn’t even thought of can ruin a shot. Be sure to take shots in rooms with lots of windows and mirrors on angles so the bounce-back from the flash doesn’t show up.

5) Buy a decent image editing program. This software is available at anywhere from $99 to thousands of dollars, but you do not need to have the high end software for your purpose. You can create contact sheets with even the lower end software and involve the client in choosing which pictures you will use.

If you follow these basic pointers on taking photographs instead of snapshots, you will put in your arsenal an important tool for selling homes more effectively. A picture says a thousand words, so the adage goes – and it’s true!

Down Payment Basics for Home Buyers

Your home search has started, but you are uncertain how much of a down payment you will need. The answer to the question of how much your down payment should be lies in your wallet and your emotions, and there is no pat answer to the question of what a basic down payment will be.

Most home buyers today get pre-qualified for a loan, based on how much of a down payment they are willing and able to make, how much they earn, and their credit history. Then the lender will factor this together to come up with an annual percentage rate, and the projected payments.

The traditional rule of thumb is for a buyer to put twenty percent down, because at that level the mortgagee (buyer) will not have to purchase mortgage insurance. This type of mortgage generally matures in either 15 or 30 years, and some lenders have the options of 20 and 25 year amortization periods.

In essence, take whatever amount of cash you have available for the down payment, and multiply by five, that will get you the approximate price of the homes you should be looking to purchase. With a 20% down payment, you should be able to get a traditional, fixed-rate mortgage without the added expense of mortgage insurance, points, or origination fees.

If you are adverse to risk, the traditional mortgage, paid back in as short of a period as you can afford, is the way to go.

However, let us say you are willing to take a bigger risk, and do not mind the cost of the mortgage insurance, or you want more house than your current cash says you can purchase. Then you will be looking at one of the other types of mortgage available, from adjustable rate mortgages, to insured mortgages, to possibly ‘borrowing’ the funds from the seller in a contract for deed. These plans vary from lender to lender, and it pays to shop for the best deal.

In some of the scenarios described above, you will need as little as no down payment up to five percent down. It is likely with these types of mortgage loans that you will have to fund some form of lending costs, such as points or an origination fee, payable to the lender at the time the loan is closed, or by making even higher monthly payments. Those fees can be a flat rate, or a percentage of the amount borrowed.

The non-traditional mortgages all have one thing in common, they are risky both to the lender and the borrower.

The lender adjusts for this added risk by creating higher effective interest rates. Even if the initial rate allows the borrower to qualify for the loan, the formula being used by the lender to adjust the rates over time will end up being higher than that of a traditional mortgage. This adjustment in the rate also makes the loan riskier for the borrower, because unless the increases in their income are keeping up with the increased mortgage payments, they are looking at losing the home in the not-too-distant future.

Overall, it makes the most sense to put down as much up front as you can. The savings over time are high, and will end up being many times more than what you put down.

Tips for Real Estate Agents on Effective Brochures

Many real estate agents come to the industry without any preparation on how to create flyers, pamphlets or brochures. While it is not rocket science, making attractive and effective brochures to help sell a home does take some practice and an investment in a set of tools to create flyers and other marketing materials that the buyer will hang onto, and call back on.

Below are five of the tools that every agent should have to create the best marketing materials they can at the lowest cost.

1) A good digital camera. While your camera phone might be just fine for snapping a quick picture, the quality and pixel density just do not cut it when you put that picture in print or the internet. You can find many good, inexpensive digital cameras in the $250 to $350 price range. Be sure to get one with a resolution of at least 5.1 megapixels, and it should have an auto-zoom feature. Get one with an expandable memory, or separate memory cards, and take a lot of pictures to select from.

2) A good color printer. You don’t need to break the bank to find a good color printer capable of printing on a variety of paper types. You can pick up a good inkjet printer capable of printing high quality pictures and graphics in the $200 to $300 price range, and refill cartridges are typically in the $30 to $40 range.

3) Quality paper. Do not use typical light-weight office paper for printing out flyers and brochures that will hit your customer’s hands. Use the cheaper paper to prepare a mockup for proof-reading, look over the layout and to check edits, but use heavier stock, or even glossy stock, for the finished product. The paper as much as the contents printed on it lend weight to the flyer or brochure that will say “quality.”

4) Photographic editing software. This one will take the most ‘hands on’ learning curve of all of the tools. But learn the basics first, such as improving the color saturation, the brightness, and the contrast of your digital images. You will be amazed at how good even the dingiest picture can be made with a decent software package. And you don’t have to go for the high end on this, you can find professional-grade editing software for digital images in the $129 to $199 range.

5) Document editing software. Whether you are using a Windows or Mac-based computer, your package came with word processing software. What most people don’t realize is that that same word processor has available various templates on the internet for download, some free, others at a minimal cost. Learn how to make the best use of those pre-formatted templates, or create one of your own. Try to come up with one standard template you use every time, or a few different ones for different markets. But keep it simple and make sure to leave plenty of room for pictures!

You’re in a highly competitive industry if you’re selling homes. The successful real estate agent knows that not only must they appear professional, but so should everything they leave behind for the world to see. Professional looking brochures and flyers are as much your ‘calling card’ as your business card, and should be a reflection of the pride you take in yourself and in representing your clients.