So you’re ready to buy a home. Great! But how are you supposed to pick a real estate agent, when half the people you met at the last networking event were in the business? They’re everywhere!
As with most decisions, you just need to take some time and do some research.
How does it work?
In real estate, usually the seller has an agent to help them sell and the buyer has a different agent to help them buy.
Buyers agents will comb through Multiple Listing Services (MLS) to find homes that meet your needs. They’ll arrange showings, connect you with related services such as home inspectors, help in negotiations and crafting an offer, and hold your hand as much as you need through the buying process.
Real estate agents earn a commission based on a percentage of the selling price. This is true for the agent who helps the buyer as well as the one who represents the seller. The total of between 4 and 7 percent is usually split between the two agents. That means that the average home sale, around $300,000, will provide around $9,000 for each agent.
Many buyers don’t realize just how much money their agent will earn. Considering the payoff for your agent, it makes sense to take time in selecting the person who will help you find exactly what you want at the best price.
There are hundreds of real estate agents out there, and if you choose one who isn’t knowledgeable, you could miss out on your dream home – or pay more for it.
Do Your Homework
Before deciding which real estate agents to interview, figure out exactly what you want in your new home and where you would like to be located.
Also spend some time searching on Google or Yelp for reviews of the agencies or agents you are most interested in working with.
When other people hear you’re buying a house, you can expect to hear that everyone has an aunt or a cousin or a friend who’s a Realtor.
While a personal recommendation is certainly a good sign, being a good relative isn’t a good standard for being a good agent. Look for recommendations of agents they’ve actually worked with.
Beware using close friends as an agent; if issues arise, it can be more difficult to come to a resolution when you’re also familiar on a personal level. Hold them to the same standards as any other agent (And that professionalism goes both ways. Don’t go in expecting your friends to give you a big discount. This is how they make a living.)
What questions should I ask potential real estate agents?
So how do you narrow the field down and choose the right one? The key is asking the right questions to each candidate.
- How many other buyers are you currently working with?
- What methods do you use to locate new properties?
- What is your policy for handling multiple offers?
- Can you provide references from buyers you’ve worked with in the past?
- What is involved in your buyer’s broker agreement and is it exclusive or non-exclusive?
- What type of guarantee do you offer if I am unsatisfied with your representation?
- Do you work with other vendors such as mortgage brokers, mortgage insurance companies, or title companies and if so, are you a paid affiliate?
- What percentage do you charge?
- Will I be working with you exclusively or will I be working primarily with an assistant?
- Do you work part-time or full-time as a real estate agent?
- What are your hours of availability and preferred methods of contact?
- Is your license in good standing and have you ever had a complaint filed against you?
- How many years have you been a real estate agent and what type of continuing education do you attend each year?
- How many short-sale or foreclosure transactions have you arranged?
- Do you ever represent the buyer and the seller?
Not all of these will apply to your situation, so focus on the ones that make sense and give you the information you need.
When you decide the time is right to buy a home, don’t rush into a deal with the first real estate agent you meet. Take the time to vet them. The initial time investment will pay dividends throughout the home-buying process.