05 Apr How To Find The Best Real Estate Agent
I am often amazed at how some agents get their listings. No, I don’t mean HOW, I mean WHY. I understand that many agents use several of the old and new marketing campaigns to get clients. They send out flyers, mailers, door hangers, door knocking, or the more recent social media advertising vehicles. That’s the HOW. But, the WHY is why a buyer or seller would hire this person.
Obviously, the agent went through some kind of “interview” before they were hired as the agent. Oh, I get that some agents get their business the number one way most people get hired, or the way they get clients and that is the referral method. In other words, someone, a family member, friend, old client, etc referred the agent. This is the perfect way to bypass the “interview” method.
However, the chances that you have hired the best agent by the referral method are like shooting in the dark. You may have a good agent, or you may just have “your” cousin. In other words, good or bad, you have to hire them. Don’t get me wrong, there is a slim chance that your cousin is one of the best or the 17,000 agents in your area. Or maybe not.
So, lets look at some things that you should look for when you are considering hiring a real estate “Professional” to buy or sale a home.
I know many of you are think why would I think that a referral from an old client is not good for selecting an agent. Sure, the old client probably had a good relationship with the agent, but many times a client does not know when an agent makes mistakes or the level of knowledge of the agent. Let’s face it. If the client knew everything about real estate, would they really hire an agent and pay them 4-7% of the sales price. I’m not saying that all deals are completed with opportunities being missed because of the limited knowledge of the agent, but I am saying most.
First of all, I am going to assume that the agent has passed the first test. That is that you get along and are able to converse and you feel comfortable in their presence. That’s the easy part. Now let’s get down to business.
- Your Agent Should Have Completed All Different Kinds of Transactions
How many transaction has the agent completed, and what kinds of transactions. In order for your agent to be effective, he or she has to have completed an acceptable number of transactions to know at least the minimum required to close one. They will be familiar with the escrow process, lenders, inspections, title, and many other nuances of the escrow process. But, it is better to close fewer transactions that are varied than to close thousands of one kind of transaction. For instance, an REO broker that is very successful will only have knowledge of closing REO transactions and maybe from a single bank client, but may be ineffective in close other transactions such as Short Sales, Traditional Sales, Investment purchases, etc. So, make sure your agent has closed all different types of sales, or represent all different types of buyers such as investors, veterans, first time homebuyer, etc. Even if you are a first time homebuyer, you should want an agent who has represented others because your agent will be communicating with sellers agents.
- Your Agent Should Know The Market
I was talking to someone who was selling their home and I asked her how she found her agent. She said that her agent had helped her buy a home in 2006. She told me she had to short sale that home and that now her credit was good enough to buy again. I point blank asked her why would she use an agent that assisted her to buy during one of the greatest run up in property values that lead to a recession and her ultimate loss of the home. She said it wasn’t her agents fault. I said, “really, then whose fault was it.” Your agent get’s paid a lot to help you through the process. It is more feasible that he or she should have expected, anticipate, and imagined that the market would fall? Did that agent tell you that there is a possibility that you are purchasing at the worst time in American history and now may not be the best time to buy? Your agent is in the business and surely must have felt that this was not the best time to buy. Did he put his commission above your best interest? Or, was he not competent enough to know the market. Either is unacceptable.
- Your Agent Should Have Some Knowledge About Taxes
Should your agent have knowledge in areas that they do not specialize? My answer would be that your agent should have SOME knowledge in EVERY area of the real estate process. The buying and selling of real estate has some definite tax advantages and maybe disadvantages. Of course your real estate agent does not have to be a tax professional or CPA. But, the agent has to know when a tax professional needs to be consulted. For instance if you sale an investment property, there is the possibility that it may be taxable, whereas often times the sale of a primary residence is not. The time to find out is not after that sale. That could prove very costly. Especially if your situation would have benefited from doing a 1031 exchange, or maybe never selling at all. It would be great if during the “interview” your agent identified that “we” need to consult a tax professional before we proceed any further, instead of just trying to sale you on the idea of hiring them.
- Your Agent Should Know About The Mortgage Process:
Sellers and buyers are making major investment decisions when they buy real estate. Even if purchased for a primary residence, it is still an “investment” that we hope will appreciate in value. Buyers will of course coordinate their loans through mortgage or loan brokers. But, these professional are in addition to the real estate agent and will be paid for originating loans they make. Your realtor should know the different loan programs and ensure that they are in your best interest and not just the interest of the mortgage professional. Your agents’ knowledge of loans could means thousands of dollars saved. I am amazed that over 98% of real estate loans are created without the real estate agent ever attending the loan signing. Even if the agent has very little knowledge of the loan process, he or she should never allow you to attend such an important part of the home buying process without their presence. If nothing else, the agent would gain knowledge that would be helpful for future closing. So, always verify your agent’s knowledge of the loan process, even if you are paying cash. The more experience you agent has, the better.
- Don’t be hypnotized by the glossy brochures
Most real estate agents have gone to fancy classes on Listing Presentations so they will have colorful brochures explaining how they will market your home to millions of “potential buyers” from their peers, or over the internet, etc. The reality is that your home is more than likely to be sold by using the Multiple Listing Service, or MLS. The MLS is the one agent tool that agents pay lots of money to receive and by which they can list your home and present it to all the other agents and buyers all over the world via vehicles like Zillow, Realtor.com, Trulia, etc. So, don’t be fooled into thinking your home will be sold within the agents own brokerage or any other way other than through the MLS. Those glossy brochures won’t tell you that. They are only there to make you believe that your agent is competent and that you are dazzled by color pictures. By all means, insure that your agent will use social media to market your home as this is the newest and best way to provide additional marketing along with the MLS to get your home in front of more buyers. You should expect that for the 4-7% that you are paying your agent. Personally, I would be more impressed with the agent that showed up with black and white comparables and a real marketing plan that emphasize how she would provide additional marketing to the MLS including lots of Social Media.
There you are. You now have an excellent way to find a great agent. Any agent able to stand up to the 5-points listed above is going to provide you with the best buying or selling experience. After all, you are about to engage in a major event in your life. You should expect to hire the best professional possible. No, you cannot expect your agent to be completely knowledgeable in all the things necessary in buying and selling a home, but you can expect that he or she should know when you should consult someone who is.