A real estate agent can come in handy when buying or selling a home. Finding the right agent will make the difference in securing favorable outcomes if you are in the market for one.
Read today’s post to learn how to choose the right real estate agent and what questions you should ask.
A note for home buyers: Before seeking a real estate agent or shopping for a home, speak with a mortgage lender. Get a pre-approved mortgage so you know how much house you can afford.
A pre-approval letter will set you ahead of other home buyers who skipped this step, speeding up your home-buying process.
I | Real Estate Designations and What they Mean
Before searching for an agent, you must understand the different designations and titles as they correspond to your needs.
Real Estate Agent
A real estate agent is a licensed professional who helps people buy, sell, and rent homes. They arrange real estate transactions between buyers and sellers as intermediaries during negotiations.
Real estate agents receive compensation for their services from commissions. This commission is a percentage of the final purchase price, which they split with the brokerage firm they work for.
For someone to become an agent, they must complete the required courses in the state they operate and pass a licensing test. Once certified, a real estate agent signs with a real estate brokerage firm, as they cannot work as solo practitioners.
However, states like Colorado and New Mexico mandate that all real estate professionals earn a broker license. With this license, they have the option of working independently. Otherwise, a client signs a contract with a brokerage firm, not an individual agent.
A competent agent can educate you about current market conditions and guide you through the selection or selling process.
Titles
A real estate agent can have one of two titles, depending on who they represent in a real estate transaction.
- Buyer’s Agent: They help potential buyers find and shop listed homes, make competitive offers, and negotiate with sellers.
- Listing Agent: They help house sellers price, list, and market their homes. They’ll also help with contract negotiations.
Real Estate Broker
A real estate agent is a salesperson at a brokerage firm, qualified to help consumers buy or sell a property. Becoming a broker moves beyond the agent level into a higher license qualification.
Prospective brokers must complete a certain amount of experience as real estate agents as required by the state. Then, they can undergo additional training and education, completing coursework and passing the exam.
Unlike agents, brokers can work alone. They can also form a team, hiring real estate agents and other brokers with additional certifications.
Realtor®
A Realtor® is a licensed agent or broker who becomes a National Association of Realtors (NAR) member. As members of the association, they pledge to uphold the standards and code of ethics outlined by the NAR.
Realtors are subject to the Realtor Code of Ethics. This code contains 17 articles outlining how they must operate throughout the process. Agents and brokers outside the association aren’t subject to these codes of ethics.
II | What to Look for in a Real Estate Agent
When buying or selling a home, you need someone you can trust on your team. Therefore, choosing the right agent matters. It would help if you had someone who puts your interest above theirs and are honest, open, and competent.
Here are a few details to remember when choosing an agent.
1. License Status
Review only agents who hold up-to-date licenses in the state where they practice. Checking your state’s real estate commission website will give you a list of legal candidates. The site should also mark registered realtors.
2. Conduct and Reputation
Working with a Realtor offers the comfort of added oversight with the strict codes of conduct handed down by the National Association of Realtors (NAR). Those who break the rules face fines of up to $5000, formal reprimands, and mandatory educational courses.
Real estate agents, however, don’t face such strict scrutiny. They adhere to their company’s code of conduct. Check your state’s regulator website for any disciplinary actions noted on an agent‘s record.
Review their online presence for red flags.
3. Level of Knowledge
The more familiar your agent is with the local housing market, the better. The agent you work with should be able to give you information on the current real estate trend, advising you on what you can expect as a buyer or a seller.
For a seller, you’ll want to know how long it takes to sell houses in the area based on demand and the average prices. This information will help you set the best price in a competitive housing market.
For a buyer, an experienced agent can help you find houses in your price range and structure your offer to give you an edge over other prospective buyers. First-time homebuyers benefit from the assurance of a knowledgeable agent guiding them through the home buying process.
As we’ll discuss in the next section, gauging an agent’s knowledge comes with interviewing prospective candidates.
4. Level of Comfort
Meet prospective agents in-person to gauge how comfortable you are interacting with them.
While house hunting, you may end up checking out dozens of houses. This means you’ll spend a lot of time with your real estate agent. Traveling to open houses, discussing what you’re looking for, and sorting out your offer. Working with someone you’re comfortable with will make for a better experience.
III | How to Choose the Best Real Estate Agent
1. Referrals and Recommendations
Personal referrals go a long way in assuring you’re working with a reputable agent. Ask your friends, family, and colleagues about their experiences with the agents they worked with and referrals you can check out.
Request references from other clients they’ve worked with.
2. In-Person Research
If you have the time, drive around your neighborhood and search for “For Sale” signs. Note the name of the agent on the sign and the brokerage company. Pay close attention to the agents on “Sold” signs and if the house in question is like the one you want to purchase or sell.
Visit open houses and watch the agent at work. See how they interact with potential buyers, their personality, and their professionalism.
3. Pick Three
Don’t settle for the first agent you meet. Pick at least three real estate agents. By speaking with multiple agents, you can compare the differences in their approaches and find someone who suits you best. Think of it as a job interview.
No company hires the first person who shows up, claiming they’re the smart pick. They look at resumes and hold interviews. They ask questions and compare responses as they trim their selection. Do the same.
4. Interview Agents
You’ll learn more about an agent by talking to them. Set up an introductory interview where you can assess each other and how well you mesh.
Here is a list of starter questions.
General Questions
- How will we communicate?
Real estate is a competitive market, which means timing is essential. This is true when buying and selling a house. How will you and your agent communicate for the timely processing of offers and negotiations?
If you work a regular job, would it be better if you receive communications by text message or email during work hours instead of phone calls? Can the agent accommodate this? How often do they usually send their clients updates?
Settle how you’ll handle communication so you’ll be on the same page.
- Whose interest do represent?
The law doesn’t require that all real estate agents represent only the buyer or the seller. Dual agents act on behalf of the buyer and seller, handling the same deal. A transactional agent works for both sides without a concrete set of responsibilities to either party.
Understand the nature of the relationship you’re entering. Root out any conflicts of interest. Choose an agent who represents your interests alone for the entire process.
- How long have you worked in the industry?
Experience brings knowledge. You want someone with a keen understanding of real estate and, in particular, the trends in your area.
The longer an agent works in the industry, the higher the chances they’ve grown a vast network of contacts. It’s a bonus if the one you work with can recommend other professionals like real estate lawyers and home inspectors.
- How will we work together?
Some agents work alone, while others have assistants. Will you be working with the agent one-on-one, or will the assistant handle most of the communication? Is there a team offering support?
Working with an efficient team increases your chance of purchasing the right property or selling your home faster. Ask for the relevant contact information of anyone you’ll be working with.
Questions for Buyers
- What’s your experience working with first-time buyers/repeat buyers/those looking to downsize?
The needs of the three above groups are different. Gauge the level of experience an agent has working with clients like you. You want someone who can tell you about the challenges you may face and how you can overcome them.
Choose someone who specializes in the help you’re seeking.
Questions for Sellers
- How can you help me market and sell my home?
You may go into the interview with some marketing ideas of your own. Ask about the agent‘s ideas and strategies to determine if they align with your expectations. How will they attract potential buyers, and how do they see your chances of selling at your asking price?
Clarify your motivations for selling, deadlines if you have one, and the price you’re seeking for a better assessment of whether or not a particular agent can help you.
- Can you provide a competitive market analysis?
Be wary of lofty promises about how quickly you can sell and the list price. Ask about similar properties they’ve sold recently. Conduct a portfolio comparison. Like buyer agents, listing agents also have their specialties.
Ask them to include houses outside of their listing as well.
Conclusion
Buying or selling a house is a huge financial decision; don’t rush with who you entrust the task. Ensure you choose a licensed agent with a spotless disciplinary record and sufficient market knowledge. Ask your social circles for referrals and recommendations, and check out the sale signs and open houses in your area.
Don’t sign an agreement with the first prospective agent you meet. Select at least three. After a frank and open conversation, compare their responses and choose a real estate agent who understands and can meet your needs.
