Realtor

The real estate industry involves the buying, selling, leasing, and management of properties, including residential, commercial, and industrial properties, as well as land. Realtors play a crucial role in this industry by facilitating transactions between buyers, sellers, landlords, and tenants.

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What Realtors Do

As a Realtor, your primary responsibilities involve managing and facilitating real estate transactions. Here’s a summary of what Realtors do:

Facilitating the buying, selling, leasing, and management of various types of properties.
Assisting clients in identifying suitable properties that match their needs and preferences.
Conducting property viewings, negotiations, and closing transactions.
Setting and earning commissions for your services, typically based on a percentage of the property’s value or rent.
Collaborating with property owners, buyers, sellers, landlords, and tenants to ensure successful transactions.
Adhering to real estate laws, regulations, and ethical standards throughout the process.
Working with clients to navigate legal documents, contracts, and agreements related to real estate transactions.
Providing valuable insights and guidance on the real estate market, pricing, and investment opportunities.

Commission

When operating a real estate business, it is important to establish a commission rate for your agents to earn a share of sales revenue. Typically, a 5-6% commission per sale is standard, ensuring employees are compensated while maintaining company operating funds (e.g., on a $30,000 sale, an employee earns either $1,500 or $1,800).

In rental transactions, the commission structure may be different. Landlords often pay agents a fee equivalent to one month’s rent or a percentage of the annual rent, typically 8-10% (e.g. if rent on an apartment is $100/month, and $1,200 annually, an employee earns either $100 or a selection between $96, $108, or $120 depending on the landlord).

To determine commission, multiply your price by 0.05 or 0.06 in the case of example A. In the case of example B, multiply your price by 0.08, 0.09, or 0.10, e.g. $30,000 * 0.05 = $1,500; $1,200 * 0.09 = $108.

Structuring

A basic real estate company structure typically consists of several key roles and departments that work together to facilitate property transactions and manage the business. Here’s an overview of a typical structure:

Owner/CEO: The owner or CEO is responsible for the overall vision, strategy, and financial management of the company. They make high-level decisions and set the direction for the business.
Broker: The broker oversees the real estate agents and ensures that they are operating within the legal and ethical guidelines of the industry. Brokers are licensed professionals who have met specific educational and experience requirements. They may also be involved in buying, selling, or leasing properties.
Real Estate Agents: Agents are professionals who work with clients to buy, sell, or lease properties. They represent buyers, sellers, landlords, or tenants in real estate transactions and are typically compensated through commissions.
Manager/Administrative Staff: The office manager and administrative staff handle day-to-day operations, such as answering tickets, scheduling appointments, maintaining client records, and managing data.
Marketing Department: The marketing team is responsible for promoting the company and its listings. They may also create marketing materials for individual agents and assist with branding efforts.
Property Management Department: If the company offers property management services, this department oversees the day-to-day operations of rental properties.
Finance Department: The finance team is responsible for managing the company’s financial records, budgeting, invoicing, and payroll. They ensure the financial health of the business and may also assist with compliance.
Legal and Compliance: This department ensures that the company and its agents adhere to real estate laws, regulations, and industry standards. They may also handle legal disputes, contract reviews, and risk management.

Property Managers

A property manager is an individual or company that is hired by a Realtor to oversee the day-to-day operations of a unit of real estate. Property owners and real estate investors typically hire property managers when they are unwilling or unable to manage the properties themselves. Apartment complexes, retail malls, and business offices are common types of commercial property that are run by property managers.

The property manager’s responsibilities might include supervising and coordinating building maintenance and work orders, resolving tenant concerns and complaints, advertising, showing and leasing vacant units, and communicating regularly with the property owner on the status of the property. The property manager is the owner’s eyes and ears on the property, making certain that issues are being dealt with promptly and the property itself is cared for professionally.

Appraisers

The term appraiser refers to a professional who determines the market value of an asset, notably in the real estate industry. An appraiser is expected to act independently of the buying and selling parties in a transaction. Their opinion about the real and fair value of an appraised asset must be unbiased by using observations as well as relevant statistics, facts, and other information. Depending on the circumstances, the appraiser presents their findings in a written or verbal appraisal.

Appraisers attempt to attach a dollar value to items, but their services are mainly used to determine real estate values. Investors generally hold an appraiser’s work in high regard because of the lack of liquidity associated with assets such as these items.

All appraisers are expected to be alert and take notice of every aspect and characteristic that affects the value of an asset. In the case of real estate, for instance, this may include assessing things like the view offered by the property. Obstructions by neighboring buildings may also affect the value of a property, and the general condition of the building and grounds will also be taken into consideration.

Further Information

As a Realtor, you are permitted to exceed plot limits for c, i, s, and r plots by 5 each, provided the plots exceeding these limitations are for the purpose of reselling the plot within 30 days of purchasing the plot.
You are allowed to create a Real Estate Agency, but only provided you have passed the Entrepreneur exam.
When conducting real estate agreements, it is highly recommended that a lawyer be present.
The main kinds of plots are: c-plot, i-plot, s-plot, and r-plot.

If real estate and sales are your forte, then look no further! This job is highly involved, and on behalf of the DEC, we wish you your very best!

Passed the Exam? What Now?

It’s recommended that you purchase a plot and build a store, or rent a shop to sell your products in!

Buy and sell property. You can list it under #realestate on Discord!

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