If you walk by any real estate office and pick up a business card from one of the agents or visit an agent’s website you’d think that all of the real estate agents out there are multi-million dollar producers. Of course, even if that were true, being a multi-million dollar producer in Beverly Hills means something completely different in Tulsa, Oklahoma. The personal promotion is almost to be expected. There are a lot of real estate agents out there and they’re all competing for your business whether you’re about to sell your home, you’re getting ready to buy one or do both. But how do you look beyond the clutter of self-promotion? How do you find the best real estate agent out there, one that addresses your specific needs? And, do you really even need a real estate agent in the first place?
Let’s answer that last question first: yes. There is no doubt that you need an agent to help navigate the sometimes turbulent waters of buying and selling real estate. Why the certainty? The phrase, “Buying a home is the biggest financial decision you’ll ever make,” might seem a bit too common these days but it’s true. And making a mistake buying or selling real estate can haunt you. If you’re selling, you want to get the best possible price for your home and your agent can help create that additional wealth through strategic marketing, upgrades and an attractive curb appeal. When buying, if you get a case of buyer’s remorse you’re stuck with it for a while. You can’t exactly take a copy of your receipt and expect to get your money back from the seller.
With all of the choices out there, figuring out how to choose a realtor can seem daunting. Consider these 5 points of advice:
Do: Go with a Full Time Agent
It’s true there are lots of real estate agents in your market but it’s also true that very few of them are really full time, around the clock real estate agents. Other agents take it on as a part time gig and really only get referrals from family and friends and then most often on the buying end. You don’t want that. You want someone who is knee-deep in your market and knows where you should buy based upon your preferences and your budget, what to pay and what areas to avoid.
Full time real estate agents are skilled negotiators and know how to properly price your home based upon both how much you want to net from the sale along with how long it will take to sell your home based upon the list price. Agents know demographics, public schools and commutes to work like no other. There’s no better experience than first-hand experience. Stay away from part timers.
Do: Negotiate on Commission Fees
It’s not unusual for a seller to conclude the listing agent’s sales commission is set in stone. Whether it is common for a 5 percent or 6 percent commission in the area, the truth is all agents are willing to negotiate a commission selling your home. Be careful though, the best real estate agents will command the higher commission structure because they are skilled at getting the most from your home and negotiating the best price.
If you’re a buyer you won’t have to pay any commission, so commission fees are not a major factor in knowing how to choose a realtor. Either way, how does your agent get paid if they’re out there finding you a home to buy? In reality it’s the sellers that pay your agent’s commission from part of their agent’s profit. If the commission is 6.0 percent of the sales price, typically the buying and listing agents split it 50/50.
Do: Review Competitive Market Analyses
A competitive market analysis, or CMA, is a package prepared by an agent wanting to list your home. The CMA will show sales of recent homes in the area you want to buy along with an analysis of what the agent thinks your home will sell for. Don’t get just one CMA. Instead, get two or more. At minimum get three.
When you review your CMAs, the tendency will be toward the best selling price. But be careful, if one CMA is markedly higher than the others there might be a problem when one agent presents recent sales that aren’t near your neighborhood but used to inflate your CMA.
Don't: Sign a Long-Term Listing Agreement
When you find your listing agent, don’t sign a long term listing agreement. Agents are taught to get as long as listing agreement as possible to tie up the property. An agent can make lots of promises, get a listing agreement for several months and then do very little marketing while buyers are out there looking at other homes and not yours.
In most markets, it’s best to keep your listing agreement at 60 days or less. Should you decide to change agents, you won’t be bound by a multi-month contract.
Do: Use Your Agent's Preferred Mortgage Lender
In many markets real estate offices also align in some fashion with a mortgage company. Real estate agents like their clients to work with their preferred mortgage company not because they get a kick back for the referral, they don’t by the way, but because they can keep a better eye on the loan approval process. You can read more about this here. All that is fine but just like in any other circumstance, don’t look just at the agent’s preferred lender. Reach out to others and get multiple quotes to help ensure the best deal possible.
Hopefully, this blog post helped you learn something about how to choose a realtor. Once you have chosen a realtor that you trust, consider Homesite Mortgage for your home purchase. Use the link below to get pre-approved for a mortgage loan in Illinois, Michigan, Missouri, or Virginia.