How to Vet Real Estate Agents
Don't let the money do the talking.
A real estate agent stands in front of a sold house.(Getty Images)
Picking a real estate agent could spell financial disaster if you choose the wrong one. After all, the goal is to make money on your home – not lose it.
But how do you know if you’ve picked the right agent? With more than 86,000 real estate brokerage firms in the U.S. as of 2012, according to the U.S. Census Bureau, you have quite a few resumes and websites to wade through.
Follow these recommendations for vetting potential real estate agents, and you’ll find the selling process far smoother.
Treat it like a job interview. Signing with a real estate agent is effectively hiring someone to perform a service, so treat it like any job interview – where you’re the employer. Ask questions, interview more than one candidate and make a decision when you find the right person for the job.
Joe Manausa of Joe Manausa Real Estate in Tallahassee, Florida, says as many as 2 out of 3 buyers and sellers select the first agent they meet, which can easily end in disaster.
“They put so little value in the quality of the people they’re going to work with that they end up getting screwed,” Manausa says.
Pay attention to how they communicate. Your real estate agent’s ability to understand your needs as a client is imperative to selling your home, and possibly finding you a new one.
Richard Ruvin, a real estate agent and team leader for Coldwell Banker in Milwaukee, recommends paying attention to how the agent listens, responds and follows up to your questions, requests and needs. "Almost always the complaints revolve, or the frustrations revolve, around those three,” Ruvin says. Not only should agents do all three in a timely manner, but in a way that you prefer, too, whether it's by phone, email or face-to-face meetings.
Ask around town. As with any job interview, you should check for references. Ask the agents you’re interviewing for the contact information of previous clients, and take it one step further – call around to other professionals in the local market to get a feel for their reputation.
Ruvin explains the ability of an agent to work with others in the business is key to the success in selling your home – if you hire someone who doesn’t play nice with his or her peers, you might find few agents willing to show your house to their buyer clients.
“We invest so much effort in developing relationships with other agents in Southeast Wisconsin," Ruvin says. "And that way, if we get to a point where it looks like a deal isn’t going to come together, we can rely on the good will we’ve created with the other side, so to speak, to keep chipping away and working towards a win-win situation.
The agent’s reputation will reflect on you as well, says Shannon Sharpe, broker and owner of Sharpe Realty in New Orleans. If you sign with a broker who makes closing a deal difficult, you could find yourself struggling to do more real estate deals in the future. “You want it to be a reflection of how you conduct business,” she says.
Talk about marketing and what you can do. In the initial meeting with a potential agent, you should expect her to present everything she plans to do to help you sell your home, including her marketing strategy and what you can do to prepare your home for tours.
Expect a large portion of marketing to be online, as print advertising has largely fallen out of style in a world of to-the-minute listing updates and Instagram ads. “This has become very much an online business. Most of the print advertising out there is designed to pick up listings, and the online listing is designed to pick up buyers,” he says.
Listen to money talk with a skeptical ear. Real estate agents will typically give you an estimate on your home’s value when they make their pitch, but don’t let dollar signs in your eyes cloud your judgment.
Picking a real estate agent based on promises of a higher sale price can leave you with a bad fit, and if an agent is making a higher estimate to try to lure you in, he's probably not a great agent to begin with. Sharpe says a promised price doesn’t mean buyers will actually be willing to pay it. “If it doesn’t go under contract and it doesn’t sell, then it’s Monopoly money,” she says.
Sharpe adds that selecting an agent who agrees to the lowest commission rate isn’t necessarily a smart decision, either. Buyer agents, who will split the commission with the listing agent, can see the commission amount, and may not be inclined to show your property if they know they wouldn’t get much reward for their work.
Go with who you trust. Your real estate agent will be privy to a good deal of personal and financial information about you, so only sign with the one you are confident will work with your best interests in mind. Manausa explains he works best when he has open communication with clients about their financial situation and reason for moving. As a result, he can secure the deal that meets their needs, “Tell your agent everything, but only after you hire one,” he adds.
When you find the agent you feel comfortable with, you can maintain the relationship for the next time you decide to move, and refer him or her to friends who are buying or selling as well.
Ruvin says his team pays particular attention to establishing long-term connections with clients. “They invariably feel like we’re trying to develop a relationship," he says, "and that the questions we’re asking and the efforts that we’re going through, one wouldn’t go through if they were simply looking at a single sale.”