Demystifying Common Real Estate Concepts

Demystifying Common Real Estate Concepts

Before you underwent your real estate training and education and gained adequate experience, you may have had your own preconceived notions about vari

Before you underwent your real estate training and education and gained adequate experience, you may have had your own preconceived notions about various real estate concepts, or you may not have had any awareness of their meaning at all. Think back to this time in your life when you consider the connotations common real estate terms may have to clients who lack your expertise.

For example, a client may operate with mistrust because they have certain beliefs about real estate agents, lenders, or home-sellers. Or they may be unaware of the meaning of a certain word or phrase that could clear up a concept that previously confused them. Many terms have positive or negative connotations relative to their more neutral true meanings.

Different terms for real estate professionals

There are many different names for professionals working in the real estate industry. Some of them are terms for the same thing, and others are commonly thought to refer to the same thing but are in fact very different. These terms include (real estate) agentREALTOR(R), and (real estate) broker. Within each of these categories, there are also multiple roles that can look very different.

You can use analogies to make these distinctions more clear to your clients. In the vein of “all squares are rectangles, but not all rectangles are squares,” you can explain that “all brokers are agents, but not all agents are brokers,” or “all REALTORS(R) are agents, but not all agents are REALTORS(S).”

Once you have clarified these distinctions, you can use them to highlight to your clients that you offer something your competitors under other designations do not.

Connotations that concern

Some situations can seem like a much bigger deal to clients who feel that their entire lives depend on the outcome of one negotiation. Consider that words like “best offer” or “final offer” can seem intimidating to someone who does not understand the fluidity of negotiations.

Other terms can inspire fear and concern even though they are a natural part of any real estate transaction. Terms like “interest,” for example, can foster a lot of anxiety, even though anyone who takes out a loan to purchase a home will have to contend with interest rates.

Context is key

Often times, a client will have heard horror stories about the risks involved in various brands of real estate endeavor. For example, they may be afraid of adjustable-rate mortgages because they know that these tend to be riskier, but may not know that the risks involved depend on the length of the mortgage.

For someone who is engaged in making one of the biggest decisions of their lives, things can seem very black and white. It is important that you demystify the concepts involved enough to allow your clients to see the gray areas, because this is where most business is done: the gray areas between competing interests, between dream home and reality.

It is very rare that meaning is absolute; instead, it depends on context, and understanding that context allows for the understanding of the concepts at play.