Step 3. Finding the Ideal Real Estate Agent
During the home-buying process, you will collaborate with and speak with your real estate agent more than any other party. This person will be your right hand, support system and expert throughout the home search. Find an agent that fits your needs and they’ll work for you to find the ideal home in the proper price range. We want to help you understand the agent’s purpose in the buying process and what questions to ask potential agents.
Typically, there are two agents involved in a real estate transaction. The agents are the buyer’s agent (represents the buying party) and the selling agent (represents the owners listing the property). These agents work on a commission basis, averaging a 3% commission for each agent, totaling 6%. This cost is normally paid by the sellers of the property. For example, a $150,000 property will be a $4,500 profit for each agent upon the closing of a property. Agents are paid when you close on your home.
These agents should provide the highest quality customer service, as many agents depend upon referrals from buyers & sellers for future profit. Remember that having the right agent is an investment into the future home and financial wealth by choosing the right home. But how does a buyer choose the best agent for their situation? Here are some questions and tips to use while interviewing real estate agents for home purchases.
How to Find a Quality Agent
Lender Suggestions: At this point, you’ve found a lender. Lenders interact with numerous agents over the years and can usually point buyers in the right direction towards professional agents that provide the best customer service and efficient documentation to the lender. Trust your lender’s opinion, especially if the lender is a local lender.
Friends & Family: Know family and friends who have recently purchased in the area? Ask for suggestions! They can give a review of their experience buying a home with a specific agent and steer the buyer away for unsatisfactory agents as well.
Drive the Area: See one agent’s signs all over the desired neighborhood. It is likely that this agent is an expert in the area and a great asset to purchasing in that specific neighborhood. Reach out and learn more about why so many neighbors turn to him or her for real estate sales.
Don’t Limit Options: It can be easy to choose an agent and not shop others. This also can lead to an unsavory experience buying a home. Interview 2-3 potential agents at minimum to determine which agent provides the most confidence that a successful transaction will occur.
- How Long Have You Been in Real Estate?
- Experience is often a benefit. These agents have probably seen and worked through some of the oddest situations that can occur in the buying process and handle any hiccups with ease.
- Ask About Their Headache Transactions
- The reality of home buying is that sales do not always go as planned. Ask agents about these situations to determine how they handled the pressure and what tactics they used to resolve the problems.
- On-Time Transactions
- Ask how many of their transactions close on time. If there is a large number of transactions not closing on time, this should be a red flag in the interview process.
- Is The Commission Price Negotiable?
- As mentioned above, the average percentage agents take for a commission is 3%. If their commission rate is higher than 3%, ask them to explain why they feel their services are superior to other agents. A lower percentage can be a blessing, but also possibly a headache. An agent may not be as experienced or may attempt to force a quicker closing on a home that the buyer is not 100% in love with to receive the commission faster. This is why the interview process is so important; know the true intentions of the agent.
Half Truths/Smoke & Mirrors
A real estate agent should always be upfront with a buyer, even if what he or she has to say is not what the buyer wants to hear. The agent is there to look out for the buyer’s overall best interest, not to reassure them down the path of a bad purchase. Buyers should trust their gut and choose the agent that is the most transparent overall.