How to Choose A Realtor

If you are buying a house instead of selling a house, some will tell you that you really don't need a real estate agent.  For many savvy homebuyers, the only purpose a real estate agent serves is to get the buyer past the guard at a gated community, or to unlock the key to the seller's empty house from the lock box on the front door.  They also handle the closing and escrow, which can be done instead by your property attorney.  BUT: if you know you have a great realtor who will tenaciously hunt down houses matching your criteria, it can save you a lot of time. Or, you may be new to an area or city.  You'll still need a good property attorney (and no matter what you do, don't let your real estate agent choose your property attorney); you choose your own property attorney on your own.

When interviewing prospective realtors, remember to ask these questions, especially if you've never used a realtor before:

• Ask if they are licensed and up-to-date. If not, you want nothing to do with them

 
• Ask what type of training they take to stay current, and ask them how good are they at using the Internet, and what type of training they have for marketing homes on the web.  Since many consumers now use the Internet to locate homes, you better have an Internet-savvy real estate agent.

 
• Ask them if they'll take a lower commission.  If you're selling a $150,000 home, every percent point less that you can negotiate down on their commission saves you $1500.   Not bad for a few minutes worth of work, and many agents have negotiable commissions.

 
• Ask them if they are a “broker” or an “agent.”  Brokers are more experienced, and it's more difficult to become a broker; they're more resourceful and driven.

 
• Home buyers and home sellers should both ask their realtor if they will get them a printout of all the recent selling prices AND the original listing prices of homes in their area, showing what the owners paid for them, how much they sold for, and full details on the homes.  Selling price is useful, but knowing what they listed for and how much the sellers dropped in price is a great gauge of the real estate market in a given area.

 
• For sellers, ask the agent how they plan to market and sell your house.  Get it all in writing – never rely on verbal promises.  You want your realtor to blitz the market and get your house into the premium listings and the free listings, and all the online web sites.  You want your house to be found, and you don't want surprises or excuses later on.

 
• If you're selling your house, ask the realtor is he or she is willing to offer more commission to the buyer's agent.  There are many buyer's agents just looking for houses whose selling agent pays that extra 1/2% or more.  This incentive can help sell the house quickly if need be.

 
• Ask your realtor if they'll accept a contract for 90 days or less.   Many agents will force you into exclusive contracts for 6 months to a year or even longer. Its best to avoid long-term leases. If the agent has a shorter amount of time to sell your place, he or she will get the lead out with that much more determination.

 

“Real Estate Agent" is another name for “Salesperson.”
This is a good thing to always remember. Don't ever let on that you are in a desperate situation, or that you need to sell a house fast to pay for emergency bills, or that you are in a desperate crunch to buy this house now because you're being transferred into town this week.
 

You cannot guarantee impartiality
If your real estate agent's commission is based on the selling price of a house you are about to buy, you cannot guarantee that the agent has your best interest at heart.  The only way to guarantee that is to actually pay a large fee to a real buyer's agent who does not get a percentage of the selling price.  But the fee almost removes the benefit of bypassing the commissioned real estate agent in the first place.  To play it safe, never tell anyone but yourself how high you are willing to go.  By law the seller's real estate agent has a fiduciary responsibility to the seller, and they WILL tell the seller everything you say, so pretend you are under police interrogation.  The first thing the agent will do is ask you how high you are willing to go on the house.  Don't fall for this trick.  Just give them the price you want to pay for the house and if they ask how high you are willing to go, tell them that's it.  If the seller does not agree, there is no deal and you're taking your money elsewhere.  If you are a homebuyer, don't think your real estate agent is "going in to do battle on your behalf" with the seller's agent.  That's just like your car salesman "going to get his manager's approval" on your offer for a new car.

Choose a successful realtor
The better agents have success selling homes in the neighborhood you are looking in.  Often you'll find the same 2 or 3 agents closing deals like crazy in a neighborhood.  Real estate agents often have a full-page ad in the local home-classified magazines listing houses grouped in one area, and the successful agents have lots of houses listed.  Part-timers and unsuccessful agents may have few if any homes listed.  And it's a good idea to steer clear of someone who does this as a part time or second job. Someone trying to find you a house should be doing it all day, every day.

Where to look for realtors
Probably the best source is people you know.  They will tell you (honestly) if they liked or hated their real estate agent.  You want a real estate agent who is professional, aggressive, and maybe wins the monthly sales awards in their office.  Certainly the large, well-funded real estate companies have certain minimum standards for business practices, ethics, and customer satisfaction.  You'll still find bad apples at the larger firms, but maybe not as many as you would in small, unaffiliated brokerage offices with no published standards or ethics practices.  Ask the real estate agent to show you all the state required disclosure forms so you know ahead of time all your rights.  You don't want any surprises later on.

Choose a realtor that has the right personality
Your relationship with your Realtor can turn sour from bad communication.  The Realtor may grow impatient that you are not making any offers on homes that match your list of criteria.  They might start to complain that you are not serious about buying and that you are just wasting your time.  You might start to complain that all they care about is selling the first house they take you to.  These are communications problems that can be avoided if proper communication is disclosed up front.  If you know you are an impatient shopper, or that you have to look at a dozen homes before you make your mind up, let the real estate agent know.  Some are more patient than others.  Make sure they have an accurate list house criteria you are looking for, and don't spring any surprises on them after you have seen 10 houses.  Give them a written list of all your house-buying criteria. Make sure your real estate agent knows every last detail of what type of house you are looking for. The easier you make the home-buying process, the better it will go.

Many realtors will not show you new construction homes
A lot of builders refuse to deal with real estate agents because they don't want to pay them a commission.  The builder feels their homes will sell themselves and they don't need to pay any Realtor commissions.  Because of this, many Realtors won't tell you about new construction homes, even if they fit your criteria list and price range. Remember, having a realtor does not mean that you can't view houses on your own.

Realtors, like any salespeople, have a set of tricks they use to get what they want. Keep an eye out for these telltale signs of a slippery realtor:

If a realtor takes an advertising photo of your house with a car in the driveway, be wary. This isn't a “trick,” but a sure-fire way to cheapen the look of your house, and any decent real estate agent would not allow it.

"Best Kept Secret" is a phrase you may hear quite a bit. This cliché has led a long life with many a realtor. Clearly, if the “best kept secret” were so outstanding it would've been sold immediately. And you can guarantee that you aren't the first potential buyer to see the little dandy.

• Home Buyers Guide
• Real Estate Glossary