The proliferation of online real estate information makes it easier than ever to be an informed consumer when buying or selling a home. Yet the digital revolution has done little to lessen the importance of choosing the right real estate agent to work with you.
The right agent can help you buy your dream house or sell your existing home quickly. The wrong agent can botch the transaction, leaving you with egg on your face and nowhere to call home.
Despite the high stakes, many buyers and sellers give little thought to choosing an agent, whether they’re buying or selling.
“They get dazzled by these great listing presentations,” says Michael Soon Lee, regional manager of Better Homes and Gardens Mason-McDuffie Real Estate in Walnut Creek, California, who likens the relationship to dating. “It’s a longtime, intimate, trusting relationship. If it doesn’t start out feeling good at the beginning, it’s probably not going to get any better.”
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. Interview three or four agents to find the one who is the best fit for you.
Most real estate agents are independent contractors who are paid a commission based on the number of homes they sell. The commission, paid from the sales proceeds, is usually split equally between the listing agent and the selling agent. Once the deal is closed, each of those agents usually has to pay a share to the broker who owns the office where he or she is affiliated.
Don’t be afraid to ask questions about how many listings the agent has, how many homes she has sold in your area, how often she will communicate with you – and in what format – and who she will represent in the transaction.
If you’re a seller, ask how the agent will market your home, who the target buyer is and how he will get your home in front of those preferred buyers.
If you’re a buyer, ask how often the agent will send you listings and whether he has worked with other buyers in your situation. A transaction involving a Federal Housing Association or VA loan, for example, includes some steps that aren't required for a conventional loan. Some buyers may want to sign a buyer-broker agreement, agreeing to pay a share of the commission if the agent shows them homes where the seller won’t pay a commission, such as for-sale-by-owner houses or new construction properties.
Here are nine red flags to watch for when choosing a real estate agent:
The agent suggests the highest price for your house. If you’re selling your house, get listing presentations from at least three agents, who will tell you what comparable homes have sold for and how long they take to sell. The agents are all looking at the same data, so the suggested listing price should be close. Pricing a home too high at the start often means it takes longer to sell and ultimately sells for less. “If you’re too high for the market, buyers will not even look at it because they know you’re not realistic,” says Lee, the author of eight books and a frequent speaker at real estate conferences. “The longer your property sits on the market, the more people are going to think there’s something wrong with it.”
The agent does real estate on the side, part time. Whether you’re a buyer or seller, you want to choose an agent who is actively following the market every day. If you’re buying, you want an agent who can jump on new listings and show them to you immediately. If you’re the seller, you want an agent who is always available to show your home to prospective buyers.
The agent is a relative. Unless your relative is a crackerjack full-time agent who specializes in your neighborhood, he or she is unlikely to do as good of a job as another agent. That can breed resentment, as well as derail your transaction.
The agent doesn’t know the real estate landscape in your neighborhood. Finding a neighborhood expert is especially important in areas where moving a block can raise or lower the value of a home by $100,000. An agent who specializes in a neighborhood may also be in touch with buyers who are looking for a home just like yours or sellers who haven’t put their home on the market yet. “It’s really a very local business,” Lee says.
The agent charges a lower commission. In most areas, commissions are traditionally 5 to 7 percent, split between the buying and selling agent. If the commission on your house is lower, fewer agents will show it. This doesn’t mean you can’t negotiate a slightly lower commission if one agent ends up both listing and selling the house. Some newer companies rebate part of the commission to the buyer or seller, but don’t use that as the sole reason to choose an agent. That’s only a bargain if the agent is otherwise a good fit.
The agent’s face shows up with online listings. The agents’ faces are there because they paid to be there. They may or may not be the best choice for you. Don’t accept the online portal’s assertion that the agent is a neighborhood expert. Interview him or her yourself and find out.
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 you want to make sure the agent is well-versed in the type of transaction you’re doing.
The agent doesn’t usually work with buyers in your price range. Some agents specialize in homes of all types in a specific area. But if you’re a first-time buyer looking for a $200,000 entry-level home, you are unlikely to get much attention from an agent who mostly handles $10 million luxury listings.
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 not to find the home but to make sure the sale closes. That 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.
10 Unorthodox Ways Your Real Estate Agent May Market Your Home
Time to get creative
When it comes to marketing your home, real estate agents have started taking it up a notch. In an age when the grocery store home listing book is just about dead and social media marketing is the new norm, listing agents are coming up with increasingly different and out-of-the-box ways to intrigue buyers without having to resort to the dreaded tactic of price reduction. "If you go to the doctor and something hurts, you don't cut off somebody's leg – you take a look and see if something else may be causing the pain," says Mickey Conlon, a licensed associate real estate broker at Douglas Elliman in New York. Here are unorthodox ways real estate agents are marketing properties today.Skipping the MLS for now
Skipping the MLS for now
A real estate agent's first move in listing a home is often to put it in the multiple listing service, a database of properties on the market in the area. It may seem counterintuitive, but keeping your home off the MLS for a few weeks gives your agent the chance to entice buyers with what seems like an early peek at the property, explains Greg Hague, CEO of Real Estate Mavericks, a real estate coaching firm based in Scottsdale, Arizona. "It gives the seller – you – a chance to test the price. Then if you decide to put it in the MLS, you can put it in at the right price, not the wrong price," Hague says. Reducing the asking price on a property already on the MLS can make an agent or buyer wonder what's wrong the property.Marketing for another type of use or property owner
Marketing for another type of use or property owner
For a property that's proving tricky to drum up interest in, your real estate agent may look beyond the standard homeowner when attracting potential buyers. Conlon and his business partner, Tom Postilio, also a licensed associate real estate broker with Douglas Elliman, are listing a townhouse on East 64th Street on the Upper East Side of New York that they market not just as a home for a new buyer but as an embassy or consulate, as well. "We've put all of those efforts out at once, and we're waiting to see what sticks, and what's very interesting is we're getting responses from parties that have never shown interest before," Postilio says.Making a video that does more
Making a video that does more
Property videos are quickly becoming a must for homes on the market nowadays, but it requires more than just a compilation of photos strung together – it needs to entice buyers to come tour the property. For the New York townhouse, Postilio and Conlon cut down a longer film the seller had previously made and added a personal touch. "We coupled that with a piece of music that the homeowner wrote, because he's a song writer," Conlon says. Videos should be short to keep viewers from zoning out halfway through – a minute-long clip featuring the best rooms and views would suffice.Hosting an above-and-beyond open house
Hosting an above-and-beyond open house
An open house is considered an old standard of the real estate marketing world to pull in people who are driving by or buyers who may not have an agent yet, but they're getting a revamp to bring more people through the door, particularly in the higher end of the market. Incorporating a theme to fit the home, entertainment or other activities will attract more people that may have been on the fence about viewing the home. "You find that a broker's open on a luxury home could easily become a $15,000 to $20,000 event," says John Aaroe, owner of Los Angeles-based real estate firm John Aaroe Group.Packing Saturdays with showing appointments
Packing Saturdays with showing appointments
An open house to kick off a property's emergence on the market can be a good way to bring in interest, but Hague recommends setting up appointments ahead of time instead and filling every Saturday with scheduled showings. By scheduling the showings in half-hour increments, Hague says the buyers see one another going in and leaving, which generates a sense of urgency because of the interest in the home. "It creates social proof … people can see other people coming and going," he says.Inviting the neighbors over
Inviting the neighbors over
Neighbors showing up to an open house just to take a look around can be the bane of a real estate agent's day, but there's another way to let the neighbors take a peek with the potential for some interest as well. Hague coaches agents to host a neighborhood event – not just for the neighbors down the street but throughout the area. "Sometimes people see the home and they like it better than the one they're in, and you're not even trying to sell it to them," Hague says, adding that he's seen a lot of deals come about from neighbors who decide to put in an offer or pass the word on to a friend or relative.Staging on the next level
Staging on the next level
Staging a home with either existing furniture or pieces brought in to give a more appealing and less lived-in look to a space is a widely accepted practice for homes on the market nowadays, but that doesn't always mean it can be done well. Postilio and Conlon recall a home they listed for actress Joan Collins a few years back. She didn't like the idea of staging at first. But they brought in designers and high-end furniture dealers who lent pieces, including ornate rugs and a Steinway piano, and what would have been a $1 million home makeover came free of charge. The staging paid off, and interested buyers got into a bidding war over the home. "That's another case where simply changing the perception can renew the life of an older listing," Postilio says.Using drones and other gadgets
Using drones and other gadgets
Technology is constantly reshaping marketing strategies, and real estate sales are no different. Filming or photographing a home from the air with a drone, for example, has gained a fair amount of attention from real estate agents and photographers alike. Hague says it doesn't hurt to use a drone in this way, but it's not necessarily going to be a selling point: "Would it make a difference in terms of a person paying a nickel more for a home? No, no chance, no way. Now, might it make a difference in a person seeing that and wanting to see the home as opposed to not see the home? Maybe."Using your motivation to your advantage
Using your motivation to your advantage
Traditionally, sellers try to keep any urgency for a quick sale quiet to avoid low-ball offers because then buyers feel they have the upper hand in negotiations. But Hague says that motivation can be used to the seller's advantage by pairing it with a higher price at the top of the home's value range, explaining how it would be a great deal for the buyer because the property could easily fetch a higher price with more time. "We build that and work that story to make it a huge, big deal, and we use that to justify why you've got such an amazing price on the home," Hague says.Finding a buyer that may not be looking
Finding a buyer that may not be looking
Especially for a luxury or more unique home, it's possible the right buyer isn't necessarily looking yet. But that doesn't mean your real estate agent will just sit on the listing. Aaroe says his firm puts in special effort to think proactively about who may be moving to the Los Angeles area but hasn't necessarily started looking for a home, like rising tech industry leaders, for instance. "It's about reaching out to the firms that are being relocated to LA; it's not waiting for them to reach out to you," he says.Read More