It doesn’t matter if you’re an investor that’s bought and sold numerous houses or you’re a first-time home buyer, picking the right realtor is a tricky and stressful decision. Of course, you could go the FSBO (For-Sale-By-Owner) route and avoid listing agents altogether, but more than likely, the buyers you talk to will be represented on their side with an accredited buyer’s representative. Why not have an expert work with you on your side to help defend your interests and also help you get the most money you can get, as fast as possible, so you don’t get railroaded?
How do you pick a realtor?
First things first – get pre-approved
Get in touch with a lender about a mortgage loan first before choosing an agent. When buying a home, it’s best to know how much house you can afford and to set reasonable limits and expectations for yourself and your finances first before you set sail into your real estate agent-finding mission. Then when you’re ready, you can start looking at agents and pick the right realtor.
Check out the agent’s online reviews
Read the Zillow, Google, and Facebook reviews for the realtors you find. Too many negative reviews are always a red flag, but beware of too many excessively-worded overly positive reviews that say the same things over and over too – as with anything, online reviews can be gamed. And pay attention to how many reviews an agent or team has — the more reviews they have the less likely they’ll be cherry-picked from only their happiest clients.
Consider referrals from friends and family
Trusted referrals from your personal network – friends and family – can potentially be a powerful tool for finding the right realtor. When faced with many agents representing buyers or sellers that might potentially game their reviews, having someone suggest an agent they had a positive, successful experience could be invaluable.
However, it pays to be careful with referrals. Your friends and family have different financial circumstances, different knowledge levels for what makes an agent a good agent, may want to live in different neighborhoods, and almost certainly have different priorities. Just because your brother’s friend is an agent, and they felt they got a good deal and good service doesn’t necessarily make it so.
Ask them how much they will get paid
Your agent’s commission could end up being one of the biggest costs in your transaction. Contrary to popular belief, there is no standard or required rate, and commission doesn’t have to be a percentage of the sale price. When you pick a realtor, ask your agent how much they’ll make and see if they’re open to negotiate. If they aren’t a strong negotiator when they’re trying to convince you to work with them, will they negotiate strongly on your behalf later?
Investigate how the realtors are paid
Are the agents commissioned-based or salary-based, and why does it matter? Commission-based realtors could have a natural tendency to think about how much money they’ll be making for themselves rather than trying to find the best deal for you. There’s usually no way around that. Therefore, when finding a real estate agent, why not consider salary-based agents, if you’re able? Salary-based agents are in the game to benefit the customer first and also their company, building referrals through great customer reviews via great customer service, cost savings and building business for the future.
See if they have a social media presence
Check the agent’s tweets and posts and what kind of posts they make and what responses they receive. Do they advertise their house listings or just post their houses on their Facebook profile? Are they creative and comprehensive with their listings? Do their posts attract attention?
Look at experience
You can find track record information on Zillow. It doesn’t matter how many years your agent has been in the business, even if the agent is based in the neighborhood you want – they may have been out there for 30 years, only do a few transactions per year, and barely know the market, much less the neighborhoods where you want to go. Check out their actual experience – how many actual real estate transactions have they done, and have they been in the neighborhoods you’re checking out?
Hammer out communication methods
Make sure you’re on the same page with your agent from the get-go. Find the fit that works best for you – do you use text, phone, email, Facebook messenger, etc? Whatever it is or if it’s a combo of methods, make sure your agent does the same. And make sure they do this at a frequency you appreciate and expect, so your frustrations aren’t building. You want this to be easy and natural.
Explain your motivation to buy or sell
Are you in a rush, do you want to take your time, is this a contingency (where you need to sell first before you buy) transaction, and anything else that might be pushing you out there onto the market? Transparency helps the agent and helps you because you’re both understanding what needs to be done and when.
Agree on the important details
As with anything important in your life, make sure you and your agent set clear expectations with each other. Agree on the commission structure, list or buy price, how many showings or houses do you wish to see, and desired time.
How do you compare realtors and see which one is better?
In addition to the methods above, nothing beats an old fashioned neighborhood walk-around. Walk down the sidewalks of the neighborhoods where you want to buy a house and look for repeat agents or company names on real estate signs. This has a double purpose. You’ll be learning the neighborhood first hand that you can’t really learn from driving it. It’s easier to note architecture, curb appeal, atmosphere and more, if you’re a friendly pedestrian and not in a lurking, slow-drive-by car. But then, you’ll also see more clearly and easily who has a significant presence in that area.
If you’re doing your neighborhood walk-around on a weekend, then pop into a local open house or two and observe how the agent engages with potential buyers and/or other agents too. Take the time to interact carefully with them – this is one of the most important financial transactions of your life, make it count with careful assessment. What’s their personality like? Can you trust them? Are they as knowledgeable as you thought they were? Do they have personal chemistry that appeals to you?
And again, if you’ve met more than one agent, and they all seem like the right personality and fit for you, let their overall experience with transactions be your guide.
How many realtors should you look at before choosing?
If you are interviewing more than 3 good real estate agents, you’re doing it wrong. When you find 3 agents or brokers that look pretty good on paper, stick to picking your realtor from one of those. If you start talking to or considering more than 3, you may get confused and forgetful about which one was best and why. Avoid the confusion and stick to 3. Of course, if you pick 3 that are not great, then chuck them all and get a new list of 3. The old adage, good things come in 3s certainly applies here.
What documents are you expected to sign?
If you’re buying, expect to sign a buyer broker agreement, which is basically a non-exclusive, right for your agent to represent you. It creates a relationship between you and the agent and explains the agent’s duties to you, and vice versa. If you’re not ready yet to sign a buyer broker agreement and aren’t yet a prospective buyer, do not ask that agent to show you homes. And ask your agent if they’ll release you from the contract if you become dissatisfied. If they refuse, hire somebody else. The right realtor should also be respectful of your goals.
Also if you’re buying, ask for and sign an agency disclosure. This is your proof of receipt. It is solely a disclosure, not an agreement to the agency. Read it thoroughly. The right realtor will appreciate your desire for transparency.
If you’re selling, your contract should spell out all the terms to which you’ve already agreed, including the real estate commission. Traditionally, the seller pays roughly 6 percent of the sales price of the home for real estate commissions, with half going to your own real estate agent and half going to the buyer’s agent. With competition from full-service, discount brokerages however, commission rates are very negotiable these days, so make sure you discuss this with your agent or pick a realtor that doesn’t charge you 6% for the same services.
Also if you’re selling, look for a contract limited to six months or less. In a competitive seller’s market, it can take less than a month to sell a home. If your contract is longer than that, or if your house isn’t selling in the first several months, start thinking of alternative agent choices.