Despite the high stakes, many buyers and sellers give little thought to choosing an agent, whether they’re buying or selling. The right agent can help you buy your dream house or sell your existing home quickly. The wrong agent can botch the transaction, leaving you with egg on your face and nowhere to call home. The proliferation of online real estate information makes it easier than ever to be an informed consumer when buying or selling a home. Yet the digital revolution has done little to lessen the importance of choosing the right real estate agent to work with you.
We would like to spend a few minutes explaining the do and do not of picking a Realtor.
Many homeowners get dazzled by great listing presentations. Picking a realtor is like dating. It’s a longtime, intimate, trusting relationship. If it doesn’t start out feeling good at the beginning, it’s probably not going to get any better.
Get recommendations from friends and relatives, and see which agents are buying and selling the most homes in your neighborhood. Read online reviews, but realize they don’t tell the whole story, since most clients, satisfied or dissatisfied, don’t write reviews. Interview three or four agents to find the one who is the best fit for you.
Ask questions about how many listings the agent has, how many homes she has sold in your area, how often she will communicate with you – and in what format – and who she will represent in the transaction.
Ask the realtor about their relationships with other realtors in the market. Because when it comes time to negotiate - those relationships matter!
If you’re a seller, ask how the agent will market your home, who the target buyer is and how he will get your home in front of those preferred buyers.
Trust but Verify the Numbers
If the agent suggests the highest price for your home you need to verify this information. This is a common bait and switch tactic used to get you to sign the listing agreement. If you’re selling your house, get listing presentations from multiple agents, who will tell you what comparable homes have sold for and how long they take to sell. The agents are all looking at the same data, so the suggested listing price should be close. Pricing a home too high at the start often means it takes longer to sell and ultimately sells for less. If you’re too high for the market, buyers will not even look at it because they know you’re not realistic. The longer your property sits on the market, the more people are going to think there’s something wrong with it.
Part Time Agent Means Part Time Commitment
Does the agent practice real estate on the side or part time? Whether you’re a buyer or seller, you want to choose an agent who is actively following the market every day. If you’re buying, you want an agent who can jump on new listings and show them to you immediately. If you’re the seller, you want an agent who is always available to show your home to prospective buyers. Why would you place one of your largest investments in the hands of a part time professional? Would you choose your doctor, lawyer or financial advisor if they were part time?
Relatively Speaking - Its Probably a Bad Choice
Is the agent a relative? Unless your relative is a crackerjack full-time agent who specializes in your neighborhood, he or she is unlikely to do as good of a job as another agent. Choosing a relative or a friend can breed resentment, as well as derail your transaction.
Neighborhood Experts Know the Inside Scoop
Does the know the real estate landscape in your neighborhood? Finding a neighborhood expert is especially important in areas where moving a block can raise or lower the value of a home by $100,000. An agent who specializes in a neighborhood may also be in touch with buyers who are looking for a home just like yours or sellers who haven’t put their home on the market yet. Real estate is a "local business".
You Get What You Pay For
The agent charges a lower commission. In most areas, commissions are traditionally 5 to 7 percent, split between the buying and selling agent. If the commission on your house is lower, agents may be less likely to show it. This doesn’t mean you can’t negotiate a slightly lower commission if one agent ends up both listing and selling the house. Some newer companies rebate part of the commission to the buyer or seller, but don’t use that as the sole reason to choose an agent. That’s only a bargain if the agent is otherwise a good fit.
Online is Deceiving
Did the agent’s face shows up with online listings. The agents’ faces are there because they paid to be there. They may or may not be the best choice for you. Don’t accept the online portal’s assertion that the agent is a neighborhood expert. Interview him or her yourself and find out.
Negotiation is the Most Important Skill
Has your agent been professionally trained as a negotiator? Ask for statistics! This is called the "list to sale ratio". What is the average sale price compared to the last listing price.
Here’s an example:
Agent A sells a majority of her listings at 96% of the average list price of $200000. Agent B sells at 99% of his average list price. Agent B is a better negotiator and could make you $6000 MORE on the sale of your home.
A great negotiator also keeps up with details of the transaction. In many cases, the most important work of an agent is not to find the home but to make sure the sale closes. That includes making sure the buyer is pre-approved for a mortgage, the home is free of liens before it goes on the market, the appraisal is accurate and issues raised by the home inspection are resolved.