When buying or selling a home, it is crucial to find a good realtor. Unfortunately there are so many terrible agents in the business. As the Chairman of Berkshire Hathaway Northwest Real Estate (based in Portland, Oregon), Bert Waugh Jr., once said, surveys of the general public show that most people have a negative view of real estate agents. He blames the brokers, stating that they hire 100% of people who hold a license.
If you’d like to see how terrible some of the agents out there are, just read the mail that they send to your home. Most of the advertisements are just a variation of “Clients are my top priority”. If every agent claims this, then what distinguishes them from each other? So what should you focus on when choosing a real estate agent? Find a realtor with:
Unsurprisingly, an agent’s knowledge of the real estate market is essential in providing good service. Ask a prospective agent about the knowledge you are hoping to gain from them. How well do they know it?
Obviously agents can’t know everything there is to know about the real estate market, so it’s important to find someone with intelligence. Speak to them. How do they come across? What education do they have? How have they dealt with difficult situations in the past?
There are a number of questions you can ask an agent to get a feel for their integrity. Ask them if they have ever worked as a dual agent on a transaction. How were they able to act in the best interest of both sides? Ask if they have ever talked a buyer out of a home that they liked. Why did they do this? Ask them how they handle co-operating bonuses. Get them to talk about the conflict of interest in co-operating bonuses, and see if they disclose the bonus amount to the buyer.
A Good Business Model
Find out what type of business model the agent uses. Are they a full-service agent or will you be doing work on your own time? Ask about the specific services and support you’ll be getting. If you are the seller, find out how the agent markets their homes. Most agents use MLS listings, direct mail, Craigslist, open houses, emails, brochures, professional photos, newspapers and magazines, and other websites. While most agents use these methods of marketing, many will try to present these services as though they are unique to them. At the same time, you can use this list to make sure the realtor isn’t cutting costs by excluding some of the more effective forms of marketing.
Don’t forget to inquire about the agent’s business hours. When will you be able to correspond with them?
Justification Of Their Cost
What is their commission, how do they split it with the buyer’s agent, and how do they justify the percentages? Ask if they give commission rebates to their buyers. Most will say no.
Find out how skilled the agent is in negotiation, communication, and marketing. Ask them about a difficult negotiation they conducted. See if the agent is articulate. If you have trouble communicating with the agent, odds are they will have issues communicating with agents on the other end of the transaction. How well do they market? Ask them to write up a description of the property you’re selling. See if the description captures the essence of your property as well as sets it apart from others in the area.
Things to Avoid:
Working With Friends Or Relatives
Never employ a friend or relative simply because of your personal relationship with them. The only thing to consider should be how qualified they are. An unqualified agent can screw you over, which happens in at least 50% of friend or relative transactions.
An Agent Referral
Many agents will give referrals because of the referral fee they’ll receive if you choose to work with agent they referred you to. This means that agents will give you glowing reviews of an agent they don’t even know. If you choose to go with an agent referral, make sure you ask what the referring agent’s specific experience has been with the one they are referring you to.
A Friend Referral
Getting a referral from a friend is fine as long as the friend has extensive evidence that the agent is qualified. Make sure they didn’t just like the “vibe” they got from the agent. Look for objective measurements.
Agents That Do A Lot Of Business
Sure, we all want to work with an agent with high numbers of proven success. But the problem with working with a popular agent is that they won’t discount their commission because they have enough of a draw without it. Also, with so many clients, how will they have time for you? You might end up getting passed over to another agent on the team who has less experience.
Name Recognition Of Agent
If an agent is really well known, ask yourself why. Odds are you recognize their name because they spend a lot of time and money getting their name out there. How much time and money they spend advertising themselves has no effect on how good of an agent they are. They’re just good at marketing themselves, which costs them money, which will in turn cost you money.
Name Recognition Of A Brokerage
The same goes for brokerages. Sure, maybe they have a fancy office downtown, and have huge billboards lining the highway, but none of that benefits the client. Just like with agents, ask yourself why a brokerage is well known and what’s in it for your. Second of all, agents move between brokerages at an alarmingly fast rate. When push comes to shove, the agent is the one you’ll be dealing with, so focus on finding a great agent, not a highly visible brokerage.