This article is written by Rajat Chawda, from Institute of Law Nirma University, Ahmedabad. In this article, he discusses the various skill-sets which a real estate agent must possess and the underlying duties & responsibilities of the profession.
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Have you ever moved to a new city and want a new place to live? Or you want to manage your property located in a different city? Or you want to rent your property? These tasks are not easy to handle by a single person. Most of the time, it occurs that the owner is not aware of the actual price of the property. He is not able to find any interested person to take it. It can also happen that he might get succumbed to a fraud. To ease these problems of the real estate owners, there are agents whose role is to cater to the requirement of such persons only. These agents are the real estate agents. This article will discuss why people hire a real estate agent, what are the duties & responsibilities of the said agent, and what the necessary skill-sets which a person needs to build to make himself a successful real estate agent.
Why do people hire a real estate agent
It is the simple logic of economics that whenever there is a demand for particular goods or services, the market forces works-out to supply the same. In this age of globalization, there are professionals catering to the needs of every other requirement of the client/customer/consumer. The land is a limited resource. The growth in population and industrial development will lead to high demand in the near future. Therefore, to many, investment in the real estate sector seems lucrative, which promises a high return on investment in the near future.
Investment in the real estate sector is risky because of the high prices involved, compliance with government regulation, and altogether management of the property purchased. This task is burdensome and hinders the potential investment in this sector. To resolve these issues, real estate agents are there for property management, regulation compliance and analyzing various real estate investment opportunities.
Still not sure why there is a need for a real estate agent? Consider this as an example that you have a property that you want to give on rent. Then a real estate agent can help you in the following ways:
Finding suitable tenants for your property
When you first think of renting out your house, you can not have a complete picture of the amount of work you will do. A real estate agent will help you locate the right tenants to help you reduce vacancy times and loss of income. They will be able to use all the marketing tools available to ensure that the property is highly noticeable to prospective tenants. The agent will then show the home to prospective tenants with open inspections that show the house in the best possible light.
A real estate agent also timely inspects the property to check that whether the tenant is keeping the owner’s property in a condition agreed by the terms of the contract. The major role of the agent is to act as a mediator between the landlord and the tenant. If any problem, dispute, and misunderstanding arise between the parties, it is the job of the agent to sort it out.
They act as a mediator
One of the reasons to consider hiring a real estate agent who specializes in real estate management is that he helps to create a bridge between you and your tenant. If there are any problems with late payments or damaged property, the agent should deal with these things so that you can avoid any awkward confrontations. Today’s top real estate managers are fully licensed, real estate agents. They know all the ins and outs of your state’s rental property rules, and they will educate you on your landlord’s rights.
A trained and professional real estate agent does more than collecting rent for you. If the need arises to organize emergency repairs, organize maintenance and to handle payment of various bills, a good agent will act as a lifesaver for you. It helps the owner to save his time and results in more efficiency. You can expect the following task from a real estate agent:
- Advertising your property
- Sourcing and screening potential tenants
- Managing your financial accounts
- Completing inspections on a consistent basis
- Organizing and sourcing tradespeople for repairs and maintenance
Compliance with regulations
Real-estate attracts every other person as a lucrative opportunity for investment. There are concerns related to the misuse or illegal use of a property. Therefore, there is a remarkable amount of paperwork that is used to manage a rental property, including property rules and regulations, lease agreements and repair and maintenance contracts, and more. In the worst case, an owner could lose his property if this paperwork is not in the correct order, or there is a non-compliance with any of the regulations.
Real estate agents are in a position to keep these files well maintained, ensuring that nothing falls through the cracks. Experienced property managers also keep track of the new zoning rules, federal and state laws, property values, and landlord rights to update the owner of the emerging real estate rules and policies.
Proactive and trustworthy
Will you hire a person who is lazy and not transparent in decision making with you? Property is a hard-earned asset for every person. A person is more likely to hire a person who shows active interests in his property than the one who does not. A good real estate agent will go the extra mile for the satisfaction of the owner.
An agent may check the property using different means, including telephone interviews, routine assessments and surveys. They are typically the people who are sociable, polite and cooperative. It helps them disperse stressful situations and handle unpleasant ones with ease. They will be the go-to person for both parties to settle the dispute in a constructive way.
If your property is in a different city, then the agent can really be helpful for looking after your property. There are several advantages to choosing a local real estate agent who has a good working knowledge of your city. With knowledge of the local market, an agent will be able to inform the potential buyers of all the relevant information they need to know about any real estate.
There’s a lot of effort and time which is invested in managing a real estate. If you don’t have the time or energy to deal with renovations, issues with tenants and the marketing of vacant properties, an agent would be the best alternative to look after all your responsibilities. An agent will happily perform all your tasks in consideration of a small percentage amount which the real estate generates. Still, if you don’t want the help of an agent, the alternative available is to face the risk of revenue if your property is empty, or dealing with tenants directly.
This example might have cleared the importance and necessity for a real estate agent to handle your real estate.
What are the duties & responsibilities of a real estate agent
After understanding the importance of them, it is crucial to understand the roles they are supposed to perform and the duties they are expected to observe. The owner of the property and the agent have a fiduciary relationship between them as it is believed that he will always act in good faith for the owner of the property. In such a relation, the interests of the owner are always held above the interests of the agent, and therefore, this relation generates some duties which the agent should observe all the time while rendering services to the owner. These duties are:
For an agent to work efficiently, an owner of a property has to disclose his property details, financial statements and personal details, which he would hesitate to disclose in public. When the owner shows such trust and confidence in the agent, the agent is duty-bound to not disclose any of the information shared in confidence. This confidentiality has to be kept, till the information does not harm any third person.
For example, if the owner discloses that a specific property is illegally obtained, then this information will harm the people interested in investing in that property. In such cases, the agent is not duty-bound to keep this information confidential.
A person is hiring a real estate agent because he is not that experienced/capable or not wanting to manage or organize his property. He is hiring the agent to complete work on his behalf and make the life of the owner efficient and hassle-free. In such a scenario, it is the duty of the agent to not work against the interest of the owner and remain truthful and honest to him all the time.
For example, an agent has to honestly disclose the actual value and condition of the property to the owner. He has to disclose the potential costs which the owner might incur by investing in a particular property. It is the primary duty of the agent based on the fiduciary relationship between them.
An agent should be loyal to all of his customers, putting their interests above anything else.
The agent is obliged to exercise fair care and diligence in the conduct of the owner’s property. The standard of care expected of a real estate agent representing a seller or purchaser is that of a competent real estate professional. On the basis of his credentials, a real estate agent is deemed to have higher qualifications and experience in real estate matters than an average citizen. As an agent, representing others in their real estate transactions, an agent is obligated to use his superior expertise and experience when pursuing his principal’s business. This responsibility requires the obligation to discover the facts relating to the owner’s affairs that a responsible and diligent real estate agent should be required to investigate. Simply put, this is the same obligation that any professional, such as a doctor or a lawyer, owes to his patient or client.
It is the duty of the agent to obey and fulfil all the legal orders of his principal promptly and efficiently. This obligation is limited only to the extent the instructions are lawful. The responsibility does not include an obligation to comply with any illegal instructions; for example, an order not to sell land to minorities or to misrepresent the status of the land. If the agent is aware of the illegality of such instructions and still performs it, he can be charged criminally too.
An agent shall be accountable for any money or property belonging to his principal entrusted to him. This duty obliges a real estate agent to protect any property, deeds, or other documents entrusted to him relating to the transactions or business of his client.
These are some of the duties which emerge out of the fiduciary relationship between the agent and client. Now, what are the roles or areas where the need for a real estate agent is responsible? The following are the major area of responsibilities for a real estate management agent:
Administration and risk management
These are the organizing roles undertaken by the real estate agents. This role includes arranging the paperwork in an organized manner. The component of risk management is very crucial for securing the property of the owner. In times of a worse disaster, an owner can even lose his property in times of a disaster. In risk management, the role of an agent is to determine the risk and the reward attached to a property. An example of this can be a parking zone facility in a property and the risk attached to the same. A successful real estate agent tries to ascertain all the future risks and resolution of the same. He keeps excellent files and records of every activity and continually assesses these functions to determine if a change is necessary.
Tenant and occupancy
It is the role of the agent to look for potential tenants, evaluate whether tenants are suitable persons for the property. It is important to understand that moving the tenant is only the beginning of the responsibilities of the agent. Understanding the tenants is a crucial task for the agent. An agent must respond to the requests of the tenants, monitor their activities and condition of the house from time to time, and collect rent. If the need arises, the task of eviction is also supposed to be handled by him.
Marketing and financial
Real estate management requires an appreciation of capital spending and budgeting. From this information, acceptable rental rates are set, balanced by the current market trends and what it can support in the form of rents. Good knowledge of the area and competitive rental properties is needed to become adept at this.
In order to maximize occupancy and rental rates, the property manager may recommend marketing programs, special promotions and other advertising strategies to the owner. Regular financial reporting is required of owners. Comprehension of financial statements, profit and loss, income taxes and budgeting are all very important to the agent.
Maintenance of buildings and open areas are also the roles delegated to the agent. Landscaping, electrical, plumbing, roofing, partitions, appliances and much more are all part of the physical property. The agent is supposed to be in contact with contractors and repair firms, budget capital spending, and track the efficiency of all repairs and maintenance.
This role is related to the financial component, as certain changes would entail substantial capital expenditure and budgeting. This is connected to the tenant and occupancy management as it is necessary for the tenant to preserve well-maintained assets. Will you rent a property which requires a lot of repairs and could cost you a lot? To solve this problem, agents maintain the condition of the property.
Skills required for the job
Till now, we have stated why a real estate agent is crucial for the efficient and effective management of the property, the duties which he has to observe and what are the roles played by him. It is now important to know the desirable skill-sets, which an established professional possesses in this sector. Don’t get disheartened if you do not have some of these stated skills. You can learn any skill in just 20 hours, as said by Josh Kaufman (Author of the bestselling book, ‘The First 20 Hours Rule: How to Learn Anything….Fast’). It takes a human being only 20 hours to learn a new skill. The time spent after these concentrated 20 hours is the duration when one specializes in that skill. Therefore, a novice can also develop his skill sets using this principle. Any skill learned is not a waste but an asset, which will definitely give results when the time comes. So, a person should learn as many skills he can and be a better person than the person he was yesterday.
Below are the general skills which an aspiring real estate agent should possess:
Every profession is based on a person’s ability to communicate. The skill of communicating efficiently and effectively is key to success. The real estate sector is not but the art of convincing to invest or not to invest in a property, to mediate the dispute between the parties like landlord and tenant. Have you ever met a person who wants to sell his house but doesn’t tell anyone about it? No, right? By communicating only, the agent can convey his point, suggestions to the clients. If the communication is appropriate, then it can in the interest of both the agent and the client.
Every client has a different preferred method of being in touch. Text? Email? Mobile calls, Whatever suits the client right at the start of your relationship. Then, make sure that you’re diligent when it comes to getting in touch. Don’t leave your clients, asking, “What will I do next?” “Or when am I supposed to do it? “As far as real estate is concerned, there is a mechanism involved: forms to be completed and papers to be signed. Make sure that you interact enough to direct your clients through the process.
The reason why someone is hiring a real estate agent is that they are themselves not experts in this field. They do not want to risk their hard-earned money by investing or managing by themselves, and therefore, they want someone who is experienced and specialized in this field. Being experienced in this field, for a real estate agent, it would be a child’s play to resolve the problems of the client and manage his property, but for the client who is completely novice in this sector, he might become uncomfortable with the conduct of the agent. The client might not be aware of the real estate sector at all, not aware of its conduct and transaction process at all. In such a scenario, it is the agent who acts as a mentor to the client and makes him aware of all the nuances of the sector and earns the trust of the client.
Adapt to new technology
If you want to play long, you have to stick to the ground. For a real estate agent, it is essentially important to adapt to the rapid changes in technology. Real estate agents who have been around for a long time have mastered the art of changing the market. Don’t be afraid of new technologies; adapt to them. Some of the latest advances in technology that are already supporting real estate practitioners are cloud services. You can save yourself money and yet have a big problem sharing your documents over the web.
Also, now there are online platforms like Magicbricks, 99Acres, etc. which allows people to list their real estate property and eases the communication between the agent and the client. If an agent lags to adopt such changes in the technology, he would be left behind in the competition.
‘Time is money.’ This quote perfectly stands its meaning these days. In this globalized and capitalist society, everyone is in the race to acquire as much wealth as they can. Therefore, for clients, their time is the most important thing which matters to them. An agent, who is late to update the client about the details of his property, potential investment returns, can cost the client his fortune. No one would like to engage with a lazy and inefficient agent. Therefore, punctuality is the core skill that can make or break the career of a real estate agent.
Have you ever heard someone saying they became successful by themselves? If yes, they are lying. Nobody can get successful by themselves; if one is highly skilled at the work he does, he also needs feedback for his performance, which is considered as help too. Networking is the best way to grow one’s career effectively and enrichingly.
You must have heard this word all the time, but it’s meaning is mostly mistaken as a way to get something from the people around you. Networking is a way of connecting to others around you and creating a group of like-minded people that can give back to you in times of need. You have a network with your fellow real estate agents. Support those who come up in the industry around you and find people with more experience you can benefit from.
Abreast to industry trends and local knowledge
A person is hiring a real estate agent because he requires his expertise and knowledge of the field. For this reason, a real estate agent has to timely update himself with the various developments in the real estate sectors like laws, guidelines, notifications, etc. He should also be aware of the local demands of the field, various investment opportunities, and potential clients. Awareness of the field and of the local area helps the agent to demonstrate his dedication and seriousness towards the field and may attract potential clients.
Some other skills
These are some of the skills which are also necessary for the career growth of a real estate agent:
A successful negotiator should see the deal from the sides of the party and decide the best approach to successfully conclude the deal in the interest of his client.
Honesty and Integrity
An agent should always remain true to his profession. He should adhere to the model code of ethics followed in the profession and works for the development of his community.
Knowledge of purchase process
An agent should be aware of all latent processes which go to conclude a real estate transaction.
A good agent should not know how to respond to the instructions or requirements of the client, how to respond to the behavioural change of the market, and how to respond to an investment opportunity.
Real estate is a promising sector whereby a person can churn out a lot of money by investing smartly. With the rise in population, the demand for property is guaranteed to increase in the near future. Therefore, one can make this profession of managing property a stable career by learning these skills as discussed above.
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