How does a real estate agency work?

How does a real estate agency work and how do they specifically help people looking to buy or sell property? There is a lot that goes into the everyday running of an estate agency and each business will be responsible for managing multiple clients at any given time.

This comprehensive guide outlines how an estate agency works and why they are an essential cog in the property market machine.

What is an estate agency?

An estate agency is a company or organisation that facilitates the buying, selling, renting or leasing of properties on behalf of clients. It serves as an intermediary between property owners—sellers or landlords—and individuals or businesses seeking to purchase, rent or lease either commercial or residential real estate.

Estate agencies employ licensed real estate agents who are knowledgeable about the local market and real estate laws and legislation. These agents work closely with clients to understand their needs, preferences and budget, and then help them find suitable properties or tenants. The agency’s primary role is to represent and advocate for their clients throughout the real estate transaction process.

There are a range of services that an estate agency may provide. Not every agency will deliver every service, but here are some of the main ones you can expect:

Property listings

Agencies compile and maintain comprehensive databases of properties available for sale or rent. These listings include details such as property size, features, location, price and photographs. The agency markets these listings through various channels to attract potential buyers or tenants.

Property valuation

Agencies assist property owners in determining the fair market value of their properties. They use their market expertise, comparable property analysis and valuation tools to provide property owners with accurate pricing recommendations.

Marketing and advertising

Estate agencies employ marketing strategies to promote properties and attract potential buyers or tenants. They use various channels such as online listing platforms, social media, print media and direct marketing to reach a wide audience.

Property showings

Agencies coordinate property viewings for potential buyers or tenants. They schedule appointments, accompany clients to the property and provide information about the property’s features and specifications.

Negotiations

Estate agencies act as skilled negotiators on behalf of their clients. They help buyers or tenants make competitive offers and negotiate terms and conditions with sellers or landlords. Their goal is to secure favourable deals for their clients.

Transaction management

Estate agencies manage the administrative aspects of real estate transactions. They handle paperwork, ensure compliance with legal and regulatory requirements, coordinate inspections and appraisals and facilitate communication between all parties involved.

Property management

Agents who work as property managers will take care of an investment property for owners. They will perform responsibilities such as collecting rent, communicating with tenants, responding to maintenance requests, conducting inspections and more.

Business model of a real estate agency

An estate agency’s business model typically revolves around facilitating transactions between buyers, sellers, landlords and tenants in the real estate market. Estate agencies act as intermediaries between property buyers, sellers, landlords and tenants. They represent their clients’ interests and work to achieve their goals in real estate transactions. This representation may involve marketing properties, identifying potential buyers or tenants, negotiating deals and handling paperwork.

In order to grow their business, estate agencies focus on generating leads, which are potential clients interested in buying, selling or renting properties. Leads can come from various sources, including online enquiries, referrals, networking and marketing efforts. Agencies often invest in lead generation strategies to ensure a steady flow of potential clients.

MRI Software provides cutting edge technology solutions for estate agencies. Our innovative real estate agency software optimises real estate reporting, process management and content marketing to help your business reach new heights.

How does a real estate agency work?

The roles and responsibilities of a real estate agency change depending on the service they are providing. Here is a breakdown of how an estate agency typically operates for both buyers and sellers.

The process of buying a property through a real estate agency

Here is a breakdown of the process of buying property through a real estate agency:

• The client should start by determining their budget, preferred location, property type (house, flat, commercial property) and specific features or amenities they desire.
• They then research and select a reputable estate agency with experienced agents who are knowledgeable about the local market.
• They’ll then schedule a consultation with an estate agent from the agency. During this meeting, you’ll discuss their requirements, budget and any other relevant details.
• As their agent, you will conduct a search based on their requirements and provide the client with a list of suitable properties.
• Schedule property viewings with the client to physically inspect the properties of interest.
• Once the client identifies a property they wish to purchase, you will assist them in preparing a purchase offer. The offer includes the proposed purchase price, any contingencies or conditions and the desired timeline for closing the transaction.
• If the seller accepts the buyer’s offer, they enter into a contract. At this stage, the buyer typically has a due diligence period to conduct inspections, appraisals and any necessary investigations to ensure the property meets their expectations and is in good condition.
• If the buyer requires financing, they will need to secure a mortgage or loan during this stage. As an agent you can also recommend lenders or mortgage brokers and guide them through the financing process.
• At the closing, the buyer and the seller sign the final documents and ownership of the property is transferred to the buyer.

The process of selling a property through a real estate agent

Here is a breakdown of the process of selling a property through an estate agent:

• The seller will research and choose a reputable estate agency with experienced agents who are familiar with the local market.
• They will schedule a consultation with an estate agent from your agency. During this meeting, discuss their goals, timeline and any specific requirements or concerns they have regarding the sale.
• You will conduct a comprehensive evaluation of the property, considering factors such as its size, location, condition, recent sales data and market trends. Based on this analysis, you will suggest an appropriate listing price or price range for the property.
• You will provide guidance on preparing the property for sale. This may involve recommendations for repairs, upgrades or staging to enhance its appeal to potential buyers.
• You will implement marketing strategies to attract potential buyers to the property. This may include online advertising, social media campaigns, direct mail, open houses, broker tours and networking within their professional network.
• You will coordinate property showings with interested buyers or their agents. You will accompany prospective buyers during these visits and answer any questions about the property. If an interested buyer submits an offer, you will present it to your client and negotiate on their behalf to achieve the best possible terms and price.
• If the seller receives an acceptable offer, they will enter into a contract with the buyer. During this stage, the buyer may conduct inspections, appraisals and other due diligence activities to ensure the property meets their expectations.
• As the closing date approaches, you will work with your client, the buyer’s agent, solicitors and other parties involved to complete the necessary paperwork. This includes preparing the final documents, ensuring all contractual obligations are met and arranging for the transfer of funds. At the closing, the client will sign the final documents, transfer ownership to the buyer and receive the proceeds from the sale.

Contact MRI Software

To discover more about how MRI Software’s dedicated estate agency software will enable your business to gain full control and simplify your marketing, sales and letting activity in a single platform, contact us today.