A real estate broker, also known as a real estate agent, is a term used in the U.S. and Canada that refers to an individual or party that acts as the middle man between buyers and sellers of properties (otherwise known as real estate or real property). To be more specific, brokers are the ones who help home sellers search for prospective buyers. In America, this relationship was originally based by reference to the English common law of agency wherein the real estate agent has a fiduciary relationship (that is, an ethical or legal relationship based on trust and confidence) with his customers.
American realty brokerages and their salespeople typically help sellers in promoting their real estate and selling it for the best possible price and deal under the terms that are most beneficial to the original homeowner. As for the agents that act on the buyer's behalf via a signed or verbal agreement (even though a broker may be excluded from getting his commission if the agreement is not in writing), they help buyers by assisting them purchase homes for the best terms and the lowest price possible as well. However, the lack of a signed agreement will compel a broker to represent the best interests of the seller by default when making a transaction.
The Full-Service Difference
Even before the latest financial meltdown came about, real estate has traditionally been a very, very competitive industry filled with agents fighting tooth and nail in order to provide their clients with the best listings and deals available. A full-service agent, otherwise known as a high-end broker who goes the extra mile in order to better compete in this dog-eat-dog market, is an extremely skilled negotiator who wins listings through compromise, sweet talk, and savvy business dealings.
These persuasive brokers are the type of agent you want beside you during particularly intense real estate negotiations, because if they can convince you to pay a commission that they feel is fair, then they can probably persuade a buyer to pay the price you want as well. In the end, investing in a full-service brokerage would mean more money for you, even though you'll have to sacrifice a bit of your profits for his commission.
The Powers of Persuasion
For example, suppose a seller mentioned to his broker while standing beside his pool or over his panoramic balcony that he couldn't believe he was able to afford buying it. A skilled and savvy agent would immediately realize this to be a selling point that he could take advantage of by putting the buyers at the same spot where the seller had his epiphany-whether it's on the foot of his pool or the edge of his balcony overlooking a spectacular view. The ability to identify the positive selling points of a property is a talent that an agent must cultivate.
You should also remember that there are times when agents lose listings because the home seller was guaranteed a higher price based on unfounded claims and a lowered commission. These are the types of haphazard listings that typically get reduced prices when they finally show up in the MLS thirty days or so later. Unsurprisingly, these price reductions have a tendency to surpass the difference of commissions between rival agencies. Under these circumstances, sellers end up losing money on the sale and getting fewer services to boot. A full-service agent has a higher commission price because he's worth the extra money.
Beverly Manago is a freelance writer focused on the real estate industry. She is also a consultant for My Single Property Websites, a web 2.0 marketing tool that lets real estate agents create stunning virtual tours and single property sites easily, with a free version available for listing presentations. She also contributes to the Real Estate Blogs section there.
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