Central Coast Updates

I hope that this is informative. This Blog is inspired by recent occurrences which make me realize that people must not understand what a REALTOR does.


What is a REALTOR and what do they do?

A REALTOR is a real estate professional that is licensed by the state to do real estate transactions and is a member of the NATIONAL ASSOCIATION OF REALTORS.

A REALTOR wears many hats to perform their job well.

In the case of representing Buyers, a REALTOR must first find out what the Buyer is looking for. After finding out this criteria, the REALTOR must search for any prospective properties that the Buyer may consider. This can be a long process usually about 3-6 months, stretching up to or even over a year. Throughout this time, the REALTOR is usually sending property listing info to the Buyer and also personally showing prospective properties at every chance. Now, if the Buyer decides not to purchase after all, then the REALTOR makes no money, as they are paid by commission…and “No Successfully Closed Transaction = No Money”…a sad but common tale. However, in the event that the Buyer does decide to purchase a property, then it is time for the REALTOR to change Hats.

Now they would enter the phase to make an offer, this of course involves a bit of paperwork which can be easy or difficult, depending on how eye-to-eye the Buyer and Seller agree on terms. Now, if the offer is not accepted and the Buyer and Seller cannot come to agreement on the terms, then the offer expires and the search for the perfect property resumes. Unfortunately, if the Buyer decides now not to purchase after all, well here’s our sad but common tale again. But, if they do agree then once in an agreement, and the original offer is signed by all Buyers and Sellers then Escrow can be opened.

Escrow is the side of the process where the deposit money is held and is the “impartial party” to the transaction. The Buyers have their agent, as is being described and the Sellers have their agent, which will be described at a later time. So, there needs to be an “impartial party” to watch over it all, hence Escrow. Usually Title is also tied into Escrow, and Title makes sure that the Seller actually is legally able to sell the property and that all liens on the property are cleared, so that the new buyer starts with a clean slate. Back to the Buyer’s Realtor’s Process…after entering Escrow there is more paperwork to do, inspections to schedule, calls to make. This is a rather busy time for the REALTOR and pretty much all parties involved, as most Escrows are scheduled to close 30-45 days after entering Escrow.

A huge thing here is to know that the Buyers can actually afford the property that they are looking to purchase. Many Buyers need to borrow money, enter the Loan Agent. The Loan Agent will pull the Buyers Credit to make sure that they are in good standing and also speak with the Buyers and get current work and salary info. Many more experienced REALTORS know that this can be a problem area and that this has been a lot of work for it just to fall apart, if the Buyer cannot even afford the property that they have been searching for the past 3 months to 1 year. With this in mind, those experienced REALTORS would have had their Buyers “Pre-Qualified” or “Pre-Approved”. This means that the Buyer would go to the Loan Agent and already know what their max price range would be before ever looking at properties. Now if the Buyer cannot afford the property, then the Escrow falls out and again our sad but common tale happens.

But, in the case that the Buyer can afford the property, then the inspections begin...Hat Change! I, personally, always try to go to any inspections, as I feel that it is an important part of the process to represent my client’s best interest. The biggest inspection to schedule right away is the Home Inspection. This is an overall view of the entire workings of a house and its working components. The Home Inspector should be a licensed and insured professional. They are there to give an overview of the house. If there are any specific “Red Flag” Areas, they will let you know within their written report. All houses have deficiencies and hopefully the Home Inspector finds them. They of course are people too and are not always able to find everything…that is why it is important for them to be insured. So, of the “Red Flag” Items that they Home Inspector finds, they will also give suggestions. For example, if there were foundation issues, they would suggest that you get a Foundation Expert to do their own Inspection of the property. Of course, there are not always problems this big, but it is important to know what you are getting into as a Buyer. That is why a Home Inspection is very important. A good agent will schedule this Home Inspection immediately after getting into Escrow, as usually the Buyer has only 17 days to back out of the deal without losing their deposit money to the Seller.

The deposit money is usually written out in the form of a check, when the original offer is made on a property. When the offer is signed by everyone and is submitted to Escrow, this deposit check is also given to Escrow. They take this deposit check and open it in its own account, so it DOES get withdrawn from the Buyers account. This usually happens immediately after opening Escrow. If the Buyer decides to withdraw from the deal and no longer purchase the property within the agreed amount of time, as stated in the purchase contract (usually 17 days from acceptance), then they will get their deposit money back. If it is after the agreed amount of time, then the Buyer could possibly lose their deposit money. If the deal falls apart and the Buyer decides not to purchase, again our sad but common tale comes true.

But, if they decide to stick through it all, then the REALTOR must get all of the different disclosures and paperwork signed by all of the appropriate parties, back to the "Paperwork Hat". The amount of paperwork depends on the situation, but usually ends up about an inch thick of 8.5x11 paper.

After having the Home Inspector do the Home Inspection and the Buyer now has in hand all of the “Red Flag” Items, it is time for the Buyer to decide if they would like any items taken care of by the Seller. Some properties are sold “as is”, so those properties would not be included. The Buyer and Buyer’s REALTOR would come up with a “Request for Repair” List. This is a Request, as the Seller does not have to perform any of these, but they usually do some items, at least. This can also be a renegotiating period, if there are many items that the Buyer wants fixed and the Seller does not wish to fix them. Then, an addendum can be drawn up to adjust the purchase price or to give the Buyer a credit through Escrow. If the Buyer and Seller again do not see eye-to-eye, then once again our sad but common tale comes true. But provided that they do, then it looks like we may have a successful close of escrow after all.

There are of course other hitches along the way, usually some sort of issues on the Lending side. Not so uncommon things for Buyers to do is get “Pre-Approved” or “Pre-Qualified” by the Loan Agent and then go out and buy a bunch of stuff on their credit cards or buy a new car or even quit or change jobs. These are all items that will still affect their Loan and Qualifying until their loan is done and the escrow is closed. If the deal falls apart here at the very end of the process, yep still the end result for our REALTOR is the same, the sad but common tale.

But, if it goes through successfully our REALTOR actually gets paid for all of the hard work that they have done, but then has to split their money with their Broker. So, when you think that REALTORS make too much money, think of what they have to go through just to get a paycheck. Of course, people in general wish to get paid for their work and time spent, REALTORS are no different.


All scenarios are not covered in this brief description of a Buyer’s REALTOR, however all attempts were made to give a descriptive and accurate portrayal of an actual transaction.