When buying a home, one of the most important factors in your future is the realtor you select to represent you as a buyer. They are the ones who should find you the right home and negotiate you the best price. How do you make sure the right person is doing the job?
20/20 Mortgage Life Insurance knows how frustrating house-hunting can be. We’re here with tips on selecting the right realtor, one of the most important decisions in the process. Real estate agents typically do one of two things: they list the house for the seller, or they represent the buyer. (If they do both for the same property, this is called dual agency and it is a conflict of interest.) The right realtor has experience, knowledge, and enthusiasm. Remember, real estate agents work on commission, so they don’t get paid if they don’t close your deal.
Research Phase
Even if you know a real estate agent or your brother has his license, you may still want to shop around. Getting an agent who knows your neighbourhood could be more important than not hurting a friend’s feelings. Buying a home is a complicated, stressful and involved process, and you want to do it right so that you end up with your dream home at your dream price. Even if you are looking to purchase a “starter” home, you still want something you can live in and that won’t hurt your long-term financial and home-owning goals.
Check Credentials
Real estate agents must be licensed. Check how they are credentialed and by whom. Do they have any awards? Or formal complaints against them? Someone who repeatedly tries to “upsell” you a home out of your price range is not the realtor for you.
References and Reviews
It’s fine to ask a real estate agent you’re interested in to talk to past clients, but keep in mind they will refer you to the happiest clients they can find. Alternatively, if you look at sites like Yelp for reviews, keep in mind that often these are clients who had outlying worst experiences. The truth will be somewhere in the middle, so it’s best to look at both. If you can’t find anyone saying anything bad about someone, or conversely, anyone saying anything good, this can tell you a lot.
Questions To Ask Past Clients
- What the difference was between the asking price and the final selling price--did the agent negotiate strongly? Why or why not?
- Would they recommend this agent or use them again?
- What would they consider the realtor’s strengths and weaknesses?
Other Considerations
Be careful of agents who work part time. While they can be good agents, they could also be less experienced or less dedicated due to other obligations. Do your homework to find out. They might not be as knowledgeable as someone who’s out there every day working listings.
How long has the realtor been in business? Someone new might be very keen, but less experienced. A junior agent at a good firm might be a good compromise if neither of those things is more important than the other to you.
Does this agent have a specialty? Are they used to working with clients like you? An agent who specializes in finding their clients luxury homes won’t be as committed to getting you your starter home. Remember, agents work on commission. Conversely, an agent who is all about first-time home buyers might not be helpful when you’re downsizing as empty nesters. Make sure the agent is used to dealing with your price range and home type. You can typically get an idea by looking at the listings on an agent’s website.
Never plan to interview two agents at one company. Pick the one you think will be the best fit, and they can refer you to their colleague if you discover they’re not.
Selection Phase
The Interview
- How long have you been a realtor?
- What kind of properties do you typically handle?
- How does the agent prefer to communicate and how often? Does this mesh with your own expectations and desires?
- Do they have experience with the neighbourhoods you’re looking at?
- How would they strategize for you? How do they negotiate?
- What kind of education and experience do you have?
- Do they have areas of expertise such as a certain property type or neighbourhood? You want someone who knows your neighbourhood!
- How many clients do you have right now, both buyers and sellers? If you aren’t choosing an exclusively buyer’s agent, be careful of how many listings to sell an agent has. This could make them unavailable to represent you at open houses, for instance.
- Why do you think you’d be a good fit for me? Do they have a competitive edge like name recognition/a strong network, special neighbourhood knowledge, or similar?
- Do you have partnerships in place with or referrals for home inspectors, mortgage brokers, or lawyers?
While any of these could be a deal-breaker for you, making sure the agent knows the area you want to buy in is critical. If they don’t know the neighbourhood, they won’t know the numbers that could result in stronger negotiations, like how quickly homes are selling and at what prices.
More Questions
Pay attention to the questions a realtor asks you--if any. Are they interested in you as a client, and what you want? Are you having a dialogue or are their answers fairly closed? Do they seem enthusiastic? A real estate agent should be direct and able to ask you questions to make sure they are doing the best work for you.
Trial and Error
Consider asking for a short-term contract, like ninety days. It’s easy to renew or extend if things go well, and if they don’t you aren’t locked in. If you find you’ve signed a real estate agent who isn’t working out for you, it’s okay to “fire” them. Just make sure your contract is clear on how to do this.
Serious Business
It probably goes without saying, but don’t waste a real estate agent’s time. If you aren’t ready to buy, don’t start interviewing agents and going to open houses “just to look”. And if you are ready, make sure you know what you want. Then discuss this with your realtor. If a deck and fireplace are musts, but most homes with those features are out of your price range, how will you compromise? Start thinking about it now to avoid making snap decisions or choices under duress. You need a plan before you get worn down from the long haul that can be a house hunt. The right real estate agent can’t help you if you can’t articulate deal-breakers and must-haves or set boundaries around budgets.
Get a Quote
If you’re on the hunt and know what your expected mortgage will be, why not get a quote now for mortgage life insurance from 20/20? Having all factors on the table, like insurance, can be helpful in making your final decision.
