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Home prices across the U.S. were up 6.1% in October relative to a year ago, as mortgage rates dipped, as home supply tightened and as buyers rushed to purchase homes before winter set in. And, as you know, we all depend pretty heavily on our local real estate agents to guide us through the home selection and buying process, with their inside knowledge of the local market a key advantage in helping us close a good deal… so it’s really important that we have a good agent on our side.
And even though the Internet has led to a proliferation of online real estate information that lets us track homes sold, homes for sale, etc., the digital revolution has done little to reduce the importance of choosing the right real estate agent to work with.
Picking a Good Agent
And though a home purchase is typically a household’s largest investment, many buyers and sellers give little thought to choosing the right agent. So if you’re in the market to buy or sell a home, pay a little more attention to finding yourself a good real estate agent. Get recommendations from friends and relatives, and see which agents are buying and selling the most homes in your neighborhood. Read online reviews, but realize they don’t tell the whole story, since most clients, satisfied or dissatisfied, don’t write reviews. Once you’ve narrowed the list down based on competence, interview three or four agents to find the one who you feel most comfortable with. Ask them how many listings they have, how many homes they’ve sold in your area, how and how often they will communicate with you – and in what format, etc.
If you’re a seller, ask the agents how they’ll market your home, target buyers and get your home in front of preferred buyers. If you’re a buyer, ask how often the agent will send you listings and whether he or she has worked with other buyers in your situation.
Equally important – watch out for certain red flags when choosing an agent. So Teresa Mears of U.S. News and World Report put out a list of “9 Red Flags to Watch For When Picking a Real Estate Agent” and I’m going to share her list with you.
Equally important – watch out for certain red flags when choosing an agent.
Red Flags When Screening a Real Estate Agent
Here are a few prominent red flags to watch for when choosing a real estate agent:
The agent does real estate on the side, part time. Part-time really doesn’t work in real estate because you want an agent who is actively following the market every day, and can jump on new listings and show them to you immediately. If you’re a seller, you want an agent who is always available to show your home to prospective buyers.
The agent doesn’t know the real estate landscape in your neighborhood. Home values and desirability often change from block to block, so it’s critical that you find an agent who is an expert on your neighborhood. Local agents are typically in touch with local homeowners and may know what properties are going to hit the market before outside agents. In addition, if you’re looking to sell, having a local agent on your side may help you close the deal much sooner.
The agent doesn’t usually deal with your type of property. If you’re buying or selling a condominium, don’t pick an agent who rarely sells condos. If you’re looking for investment property, find an agent who traditionally works with investors. Many agents have multiple specialties, but make sure your agent is well-versed in the type of transaction you’re doing.
The agent doesn’t usually work with buyers in your price range. Similar to the point I just made, look for an agent that is comfortable working in your price range and is willing to do whatever it takes to close a deal. For example, if you’re a first-time buyer looking for a $200,000 entry-level home, don’t sign up with an agent who mostly handles million-dollar listings.
The agent is a relative. It’s often tempting to use a close family friend or relative who’s known to be a fantastic real estate agent… but for major transactions like home sales, it’s best to stay away from relatives because you reduce your leeway in getting what you want… and this can sometimes lead to lifelong resentments… so, since there really isn’t a shortage of good agents, it’s best to pick someone you’re not related to, to keep things objective and professional.
The agent is a poor negotiator or fails to keep up with details of the transaction. In many cases, the most important work of an agent is often making sure the sale closes in an efficient manner – this includes making sure the buyer is preapproved for a mortgage, the home is free of liens before it goes on the market, the appraisal is accurate and issues raised by the home inspection are resolved.
So, if you’re in the market as a buyer or a seller, I urge you to invest some time in the agent selection process. The fact is, most buyers put little thought into agent selection and probably do not get the most bang for their buck, so the time you spend on vetting and getting the right agent will serve you well – on your first transaction and over time, because a good agent may also come to you with ideas on move-up sales, property investments, etc. So look at real estate agents as potentially lucrative life-long relationships.