Finding the Best Real Estate Agent
Finding a professional to help you with the biggest purchase of your life shouldn't be a random event. Consumers probably spend more time picking out paint colors for their house or deciding where to go for dinner than they do choosing a real estate agent.
The average sale price of a new home in the United States was $272,900 in 2010, according to the U.S. Census Bureau. For first-time homebuyers guided by a real estate agent, that's a lot of money to spend if their agent doesn't help them find the best home at the best price.
Since many home shoppers can do much of the legwork themselves by looking for homes online, a real estate agent needs to do much more than put a home on the MLS and expect buyers to show up - though that is a good start. Finding an Internet-savvy Realtor is one attribute to look for. Here are five others:
1 - Good referrals
These can be an agent's bread and butter, and they may pay a fee to the person who gave the referral. Like many professions - dentist, roofer, plumber - getting a referral from people you know can be the easiest and best way to find a good real estate agent, and can be a sign that you've found a good one.
Christy Haussler, host of a podcast for small business entrepreneurs, bought a home in December 2013 after moving 800 miles to a city where she knew few people. Her new friends recommended a Realtor who "was honest and didn't try to get you into a house you didn't want, just so she could make a sale," Haussler says.
An honest, hard-working agent was what she wanted the most. "When you don't see them doing a hard sell on their listings over another listing that may be more appropriate for you, then you probably have yourself a keeper," she says.
The referral worked perfectly and the agent kept everything on track and helped her find a great house, she says. Haussler has already referred two other friends to the agent.
Be careful not to use a referral only because the person giving the referral is friends with the agent, and hasn't worked with them, says Ron Nawrocki, fund manager of B.I. Solutions Corp., a residential real estate fund.
"A bad experience with that agent may not only cost you money or waste your time, but also hurt your existing relationship with the person who recommended them," Nawrocki says.
If you're not happy with the referrals you've been given, then ask agents you're interested in for references. Call them and ask if they'd hire the agent again. Were they easy to reach? Did they follow up with you enough?
2 - Get the Ferrari
Since both the buying and selling agents are normally paid by the seller, a buyer shouldn't worry about cost when selecting an agent, says Travis Saling, a real estate agent at Team Home Loans in San Diego.
"Choosing a cheap agent is like going to get a rental car and having free reign to choose any car for the same price and getting the Pinto hen you could get a Ferrari," Saling says. "Look around and go with the best agent you can find regardless to what his commission is because you are not paying for it."
3 - They're not a dual agent
This is something a buyer should at least think twice about. A real estate agent representing both parties can lead to distrust because they have two conflicting obligations: Getting the highest price for the seller and the lowest price for the buyer.
"I know it might seem attractive to use the seller's agent because you think it will help your offer get accepted," Saling says. "One would think that this agent has more to gain and will push your deal harder to get it accepted."
But the seller hired the agent first, reminds Saling, and they may hold the seller's interest above yours. This is one type of agent a first-time homebuyer would likely want to avoid.
4 - No part-timers
When looking for a real estate agent, it can seem like everyone is getting their license or knows a friend or family member who is getting one, says Saling, who recommends avoiding a part-time Realtor and hiring a dedicated professional who sells homes full-time.
"A professional will be able to negotiate you a better deal and you can be more confident the deal will close on time," he says. "There are all kinds of pitfalls to buying a home and it is part of the Realtor's job to keep you away from these bad properties."
5 - Transaction history
As a buyer, you want an agent who knows the area you're looking in, and has sold a lot of homes there.
"You might find the best Realtor in the world, but if he doesn't work in your area, what good is he to you?" Saling asks.
Ask real estate agents who you're interested in hiring how many homes they've sold in the past year in neighborhoods you want to buy in. Another method, which Saling recommends, is to go to a local Title company and ask for a list of recently closed deals to see if agents you like have completed the most deals.
As part of the transaction history, buyers may also want an agent who lives in or near the area they like so the agent can speak to school districts, transportation and other amenities. Also ask if they've sold and purchased homes for clients that are similar to what you're looking for, and are in your price range.
Interviewing real estate agents may be the best way to start the search. Set up individual meetings and ask them about all the issues listed above. You'll look like a prepared buyer, which is what every real estate agent should want in a client.