Real Estate Terms for New Homebuyers

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Over 33% of the housing market is made up of first time buyers and there’s a lot to learn for these newbies. It’s particularly true right now, as buyers face unique challenges. The good news is Ribbon is here to help make home ownership achievable and easy to understand! Today we’re starting by breaking down some classic real estate jargon—the difference between agents, brokers, and realtors and why they’re important.

Real Estate Agent

Anyone who wants to represent buyers, sellers, renters, or rental property operators starts as an agent. Real estate agents must complete a mandatory state training and pass an exam to obtain a professional license. The training differs per state, with each state asking for different amounts of hours needed. The exam is made up of two parts—one part on federal real estate laws and one on state-specific laws. There are a few ways to find agents, but no matter where you find them there are some questions you should always ask to find the right fit for you.

Real Estate Broker

Brokers are agents who have completed this level of licensing as well as the brokerage level of training and exams. Topics covered at this level include contracts, taxes, insurance, in-depth business ethics, and laws to operate a brokerage. This means they’re more knowledgeable about real estate investments, construction, and property management. They may also have more on-the-ground experience, as you can’t take a brokerage exam unless you’ve been an agent for at least three years.

There are a few types of real estate broker titles. The first is Principal/designated broker. They oversee all the agents, as well as all real estate contracts. They’re the boss. Then comes the managing brokers who oversee the day-to-day of the business. Lastly is the associate. They have a broker’s license but report to the managing broker and don’t supervise others.

Realtor

Realtors are agents who are members of the National Association of Realtors®. This means they’re committed to maintaining the standards of the association and its code of ethics. In turn, they have access to tools like real estate market data and transaction management services.

Buying and Selling

With that knowledge learned, we can discuss the difference between buying and selling agents/brokers and why they’re important.

Buying Agent or Broker

Buying agents or brokers represent buyers in a market. They first help you find homes. While you have access to the internet, they have access to a MLS (Multiple Listing Service) portal. They also may know about homes that haven’t been listed or are about to be. They’re particularly important because they help you create your best offer, handle the documents, contracts, and conversations with the selling/listing team and their client. They can also recommend other professionals and tools to work with (like attorneys, brokers, and Ribbon) and can troubleshoot problems like home inspection and appraisal issues. Their cost is most often covered by the seller.

Selling or Listing Agent

Which brings us to the seller. Sellers often hire a listing agent or broker (also sometimes called a selling agent/broker) to represent them. They’re important because they handle pricing homes, staging, marketing, and open houses/showings. Once offers are on the table, they then work with the buying agent on negotiations and, if there are multiple offers, help the seller decide what is in their best interest. They also oversee the home inspection process and the closing procedures and documentation.

How Ribbon Fits In

A good buying agent/broker knows all the ways to help new buyers in the market, from mortgages to tools. One such tool is RibbonCash, which allows you to turn your offer into all cash (the seller-preferred financial option) and get extra time to secure financing. Another is Ribbon Appraisal Protection, which covers the gap if the home you want appraises for lower than expected. Ribbon works on all types of homes, including new constructions. To learn more, book a complimentary chat with a Ribbon expert or ask your agent to.