Maximising value: Roles and Strategies of the Real Estate Professional
Rudolphe ABEN
The world of property is a fascinating one with many different facets and roles. Today we're going to take a look at one particular figure in this vast landscape: the estate agent as a property dealer. Let's dive into this exploration!
A real estate agent: Who is he and what does he do?
A real estate agent is an individual or a company that specializes in buying properties with the intention of reselling them at a later date, with the aim of making a profit. He is an independent operator who invests his own funds or borrowed funds for which he is personally responsible. This involves taking significant financial risks. The aim is to buy a property below market value and then sell it at market value.
Ethically, it is preferable to be transparent about one's role when dealing with a client, especially when the client is an individual. And the main purpose of this activity? To make a profit.
An estate agent may also take on the role of a property developer. He could buy a piece of land or a building to be demolished, build something new on it and then sell it on.
From a tax point of view, the real estate agent is subject to the commercial profits regime and VAT. He must comply with certain legal obligations in terms of declaration of existence and accounting, declaration of receipts, invoicing and other specific obligations related to real estate operations.
Ethics and transparency
It is essential to note that it would be ethically unacceptable for an agent to accept a sales mandate and lead the seller to believe that he will try to sell the property at the highest possible price, only to offer a lower price. He must therefore be transparent and tell the seller clearly: "I cannot tell you how much it is worth, but I can tell you how much I am offering".
The advantage for the seller is that he can sell without commission to a professional who can quickly prove his solvency.
Definition of market value
Market value is the price that several buyers would be willing to pay for a property within a reasonable period of time.
The estate agent as an intermediary
As an intermediary, the estate agent works on a finder's fee basis. His income is derived from facilitating the sale, bringing together a seller and a buyer and arranging all the details of the sale so that it takes place in the best possible conditions. In order to justify his commission, he must be able to explain the added value of his intervention.
An efficient real estate agent will sort through the calls from potential buyers and will have a large number of properties to sell, i.e. many mandates. After all, whoever has the mandates controls the market. Whoever has the mandates controls the market and therefore the transaction.
The road to commission
In order to earn commissions, an agent has to follow a process that includes several steps: marketing to find a buyer, signing a preliminary sales agreement, closing deeds at the notary's office. And all this requires having properties to sell, i.e. mandates. To obtain these mandates, it is necessary to establish contacts through appointments, which also requires marketing.
The price gap: the reality
There is currently a significant gap between asking prices and actual recorded prices, often between 15 and 20%. There are three main reasons why a property may not sell:
- The location of the property
- The condition of the property
- The price of the property
The estate agent acts as an advisor to both the seller and the buyer. He must be wary of accepting mandates that are too expensive, that may be unsaleable, that may take too long to sell and that may have a high absorption rate. The solution is truth, transparency and a fair price.
Marketing on your feet: The winning strategy
Finally, a good 'stand-up marketing' strategy is about increasing the property's market presence, prospecting and creating opportunities. Asking open questions and listening carefully are essential. For full understanding, it is always helpful to review the entire course.
And that's it! We hope you have found this dive into the role of the estate agent as a marketer useful. We look forward to continuing to explore the exciting world of property with you. See you soon!