Tips for Finding the Right Real Estate Agent
Those thinking of buying or selling a house often overlook the importance of a qualified, experienced real estate agent in the process. A surprising number of buyers and sellers opt to handle the transactions alone and proceed with a For Sale By Owner (FSBO) strategy.
For many, if not the majority, though, an FSBO strategy is contrary to their financial interest, i.e., penny wise and pound foolish. Why? While saving the commission on the sale, a home sold by an owner typically sells for 15% less than homes sold with agents. The FSBO approach ignores the extra stress and time the owner expends, replacing the services the agent typically provides.
Ultimately, using a real estate agent is worth the extra fees. But it’s important to find the right agent for your needs.
Real Estate Agent Services
The agent and client have a “fiduciary” relationship under the law. The law requires the agent to act in their client’s best interests and remain completely loyal.
Specifically, a fiduciary cannot use their position for personal gain or permit their interests or the interests of third parties to interfere with their client’s interests. In other words, agents cannot use their position to benefit themselves at their client’s detriment.
Full-service real estate agents provide several valuable services to their clients, including:
- Determining a market-competitive price
- Marketing/locating the right house
- Negotiation advice and representation
- Closing facilitation
Determining a Market-Competitive Price
Whether buying or selling a home, clients seek the best value for their investment. Understanding market comparables and demand is essential in arriving at the optimum price.
Agents complete a Comparative Market Analysis (CMA) to arrive at that value. Without an agent, it’s much more difficult to figure out how much a house you’re buying or selling is worth.
Marketing/Locating the Right House
Using their access to the Multiple Listing Services, agents develop successful marketing programs to sell a home or find homes for buyers seeking specific features and locations.
Agents conduct preliminary analyses to learn details of each candidate, saving their clients time and money. Agents typically help with site visits, home staging, and communication between the relevant parties.
Negotiation Advice and Representation
Agents work with clients to determine their needs (essential features) and wants (desirable features) to develop and implement a negotiation strategy likely to succeed and meet client needs.
The closing of a real estate transaction involves multiple entities (the other side’s agents, title company, loan representatives) and services (inspection, legal representation) in a complicated, confusing, often stress-filled process. A professional real estate agent coordinates the various elements to eliminate surprises and ensure a successful conclusion.
Finding the Right Real Estate Agent
Choosing the right agent to help with the sale or purchase of a home is critical to a successful, satisfactory experience. According to the Canadian Real Estate Association, more than 130,000 real estate brokers and agents work through 90 real estate boards and associations across Canada. As for the National Association of Realtors the latest statistics shows that 1.4 million collective force of real estate professionals are subscribe to a strict Code of Ethics through 1200 local and state associations across the United States. In other words, you have a lot of agents to choose from.
The critical factors in the choice of an agent are compatibility, experience, and market knowledge, verified by checking references and reviews provided by potential candidates.
Professional agents are found in multiple ways, including:
- Personal reference: Most house buyers and sellers have friends, family members, or neighbors who have bought or sold a home in the past couple of years. Ask about their experience and whether they would recommend their agent to you.
- Driving around: Many home buyers and sellers select an agent by going through the neighborhood and selecting the agent with the most “For Sale” signs as their representative. This process provides some assurance that the agent knows the nuances of the neighborhood that affect prices.
- Online search: Most realtors maintain active websites and social media profiles with information on their agents, communities they represent, and specific properties. In many cases, client reviews are available.
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Selecting an Agent
In most cases, clients will find several agents who seem suitable. Rather than selecting one by random, you should interview each potential agent, call references, and negotiate commission rates.
Interview Each Potential Agent
Although each potential agent might seem perfect on paper, there are no guarantees they will be a good fit for a particular assignment. Arrange a personal visit and ask each agent candidate the same questions:
- How long have you been a full-time real estate agent? Personality, though a positive, is no substitute for experience. Many agents have less than one year of experience. Ideally, you want someone with more.
- How many properties do you sell each year? According to Real Estate magazine, the average Canadian realtor makes four sales per year, while the top 10% do 10 deals.
- Do you primarily represent sellers or buyers? If the client is selling a home, listing experience is critical. In real estate parlance, agents who represent sellers of homes are “listing agents”; those generally representing buyers are “selling agents.”
- How will you keep me informed of showings and feedback about my home? An upfront understanding of communication between the agent and client will reduce potential conflicts between the two. Clients often expect 100% of their agent’s attention while the agent must simultaneously balance the needs of multiple clients.
When interviewing agents, ask for contact information of a few recent clients. Contact them and ask them about their experience with the agent, including what they liked and problems they experienced.
Many former clients are reluctant to criticize in writing but may open up in a conversation. Before ending the conversation, be sure to ask whether the client would hire the agent again.
Negotiate Commission Rates
Negotiating the right commission arrangement before agreeing to representation is critical. Many agents are amenable to reduced or flat fees if offered. Canada’s average commission rate is 3% to 7%, shared by the two agents representing the buyer and seller.
A 1% reduction in the rate might be thousands of dollars, savings that can be used to defray other moving costs.
Buying or selling a home is often the most significant financial transaction of a person’s life. Its impact affects all phases of daily life — neighbors, the schools children attend, lifestyle, even time with family. With such importance, the advice for the person facing the purchase or sale of a home is most often “take emotions out of the decision.”
In a world of conflicting claims, hidden agendas, and professional salespeople, feelings are easy to manipulate and often lead to bad decisions. Unfortunately, the advice ignores one of our greatest strengths: intuition. Most people experience it from time to time but typically discount it because we do not understand its source.
Intuition is especially important when selecting a real estate agent. Being able to trust the person guiding you through the process is critical. Do not ignore or discount the feelings you have about an agent. Good chemistry between client and agent is just as important as their experience. Trust your gut.
Finally, after you’ve completed your real estate transaction, it’s time to move. Again, you don’t have to do all of this alone. Moving concierges are available to assist you and reduce the stress of your move. Take advantage of the free services of a moving concierge and organize your move quickly and efficiently.
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