Would you consider hiring a home improvement contractor without first checking references and analyzing their portfolio of past work? Probably not. Most people do their research before they hire service professionals like roofers, plumbers, and general contractors to make sure they find someone trustworthy.
However, this due diligence often falls by the wayside when it comes to hiring a real estate agent. Yet buying or selling a home is one of the biggest financial decisions you’ll make, and finding the right person to represent your interests is key to getting the best deal or the best return on your investment.
If you choose the right real estate agent, the process will go relatively smoothly. However, the wrong agent can wreak havoc on a transaction and possibly even lose you the sale entirely. In other words, it’s a big decision.
But what should you look for when hiring a real estate agent? What red flags should you watch out for? Here’s what you need to know to find a great real estate agent.
What Type of Agent Do You Need?
Agents who work with homeowners selling a home are called “seller’s agents” or “listing agents.” These agents represent the interests of the homeowner during the listing and negotiation process.
Agents who work with homebuyers are called “buyer’s agents” or “selling agents.” These agents represent the interests of the buyer during the showing and negotiation process. Some buyer’s agents work exclusively with buyers, meaning they don’t list any homes at all.
The terms “seller’s agent” and “selling agent” often confuse people in the home buying and home selling process because they sound almost identical. However, they represent different parties with different interests. Seller’s agents represent the party selling a home, while selling agents represent the party buying the home; however, they’re only called a “selling agent” once the final contract is signed.
Some agents are called “dual agents,” which means they’ve agreed to represent the interests of both the buyer and seller during the home buying process.
Here’s how it works. Imagine you walk into an open house and fall in love with the place. It’s a hot property, and you know it’s not going to last. You just started your home search and don’t have your own agent. However, the listing agent is on site and would love to help you make an offer on the home right there. You don’t want to wait to get your own agent, so you agree to work with her. In this case, you just entered a working relationship with a dual agent.
Dual agency is controversial because agents are forced to walk a very fine line and stay neutral throughout the process. After all, they’re representing a seller who wants to get the highest price possible for their home and a buyer who wants to get the lowest price possible for that same home.
There’s also a potential conflict of interest because of commission. In a typical sale, the buyer’s agent and listing agent split the roughly 6% commission, getting roughly 3% each. A dual agent keeps 100% of the commission, which means it’s in their best interest to sell a home for the highest price possible. This works out great for the seller, but not so great for the buyer.
Many real estate professionals feel strongly about dual agency, with good reason. Dual agents are legally prohibited from taking sides in the transaction or sharing confidential information. So they get double the commission while providing less advice and guidance to both parties. Most of the time, the only person who really benefits is the agent.
Dual agency is only legal in some states, such as California and Texas. In the states where it’s allowed, agents are legally bound to disclose their dual agency before a contract is signed. To find out if dual agency is legal in your state, simply Google “Is dual agency legal in” along with your state’s name.
How to Find a Great Real Estate Agent
Not every agent out there will be the right fit for you. Even highly successful agents have their downsides.
For example, the top-selling agent in your area might have an impressive advertising budget and a large team in place to assist clients. However, this might mean you end up working with several different people throughout the buying or selling process. If you’re looking for personal attention, this particular agent might not be the best fit.
On the other hand, you might come across an agent with much less experience but whose personality fits perfectly with yours. You suspect that their drive to make you happy – and receive some much-needed referrals and testimonials in return – might be more important than experience alone.
There’s a lot to consider when it comes to finding the best agent for your situation. Here’s how to get started.
1. Create a Short List of Agents
Thanks to Google, you can easily find dozens to hundreds of agents in your area with a few keystrokes. However, you’ll usually find more detailed information on agents through a real estate website.
One of the best places to start your search is Zillow’s Agent Finder, which allows you to see a full list of local agents with their client testimonials and recent listings. The recent listings feature is especially useful. First, you can use it to find agents who have recently worked with sellers or buyers in the area you’re considering. If you’re selling your home, it also lets you analyze how each agent photographs and markets their listings. For example, does each listing look professional and appealing? Is there a video tour?
Make a list of at least three agents you’re interested in interviewing.
2. Ask Lots Questions
Now that you’ve got a short list of agents, your next step is to talk to them in person. Yes, you can do a phone interview, but meeting in person is better.
A face-to-face meeting allows you to really get a feel for who this person is, what their values are, and whether or not their personality will fit well with yours. This is the person who will be guiding you through a stressful, and financially significant, process; you need to feel comfortable talking with them. You also need to know if they’re going to tell you the truth instead of sugar-coating some bad news. And you need to know that you share the same core values.
Start with these general questions:
- Do you work in real estate full-time?
- How long have you been licensed?
- Are you a member of the National Association of Realtors (NAR)? (The NAR requires additional training and adherence to a strict code of ethics.)
- Do you work with a team? If so, will I primarily work with you or someone else?
- How much of your business comes from referrals?
- What is your average number of current clients?
- How do you like to communicate? (For example, your agent might prefer quick texts to pass along information, while you’d rather have a phone call. Make sure you’re on the same page here, as good communication is key to a successful working relationship.)
- Has a client ever filed a complaint against you or your agency? If so, how did you handle it?
- Have you won any professional awards?
- What kind of contract do you offer? What happens if I’m unhappy with our working relationship?
- What do you like best about being a realtor? What do you like least?
These questions are a great way to get the conversation started. However, you’ll need to ask additional questions depending on if you’re buying or selling.
If You’re Selling a Home
If you’re selling a home, ask potential agents the following questions:
- How many sales did you close this year?
- How many homes have you sold in my area? Were they in a similar price range as my home?
- How many of those homes sold at or near the list price?
- Do you require pre-qualification or pre-approval from a mortgage company before showing homes?
- What is your fee? What other real estate fees will I be responsible for? (Keep in mind that real estate fees are negotiable.)
- What is your marketing strategy for a home like mine?
- Do you use a professional photographer or home stager?
- What do I need to do to get my house ready for sale or increase its curb appeal? (They might have some suggestions for remodeling projects to increase your home’s value.)
- Do you host open houses?
- How long do you think it will take to sell my home?
- Who is my target buyer?
If You’re Buying a Home
If you’re buying a home, consider these questions:
- How familiar are you with the areas or neighborhoods I’m interested in?
- Is there anything happening in this area or neighborhood that I should know about? If so, will these changes affect home prices now or in the future?
- What times are you available to show houses?
- How often will you send me new listings that match what I’m looking for?
- Can you recommend other professionals I’ll need, such as a home inspector?
- How long does the typical buying process take with you?
- How many homes do you show buyers, on average, before they make an offer? (This is an important statistic because a good realtor will know what their clients want and will have to show fewer homes before finding the right fit. This saves time and energy for everyone involved.)
- Do you attend each home inspection? (Agents who attend home inspections can ask the home inspector detailed questions directly; this information can help them negotiate a lower price.)
- What is your sale-to-list ratio for your last 10 transactions? (The difference between the sale price and list price will give you an important clue about how good this agent is at negotiating.)
3. Talk to Past Clients
Once you’ve interviewed several agents in person, it’s essential to talk to some of their past clients. Ask each agent to provide you with contact information for at least three clients they’ve worked with in the past year.
Consider asking these clients the following questions:
- How was your experience with this agent overall?
- What did you like best about this agent? What did you like least?
- If you sold your home, how did the agent market your property? Do you feel it was effective? How long was your home on the market?
- If you bought your home, do you feel the agent was willing to show you every property you were interested in? Did you feel they understood what you really wanted in a home?
- Were they quick to respond to phone calls and email?
- Are they a good listener?
- What was your home’s list price and final sale price?
- Do you feel this agent got you the best price possible?
4. Verify Their License
It’s hard to believe that someone would lie about being a licensed real estate agent, but it happens. Fortunately, there’s an easy way for consumers to check that an agent’s license is legitimate. The Association of Real Estate License Law Officials (ARELLO) has a searchable database that allows consumers to verify any agent’s license or registration.
Working With New Agents: Pros & Cons
If you’re considering working with an agent with little or no experience, then you need to find out more about their current situation and future goals.
For example, many agents begin their careers selling homes on the side while still holding down a full-time job. While there’s nothing wrong with this, it’s important to find out whether this agent will have the time and flexibility you need. Consider these questions:
- Will you be able to return phone calls or emails during the day, or only in the evening?
- Will you be limited to showing homes only on the weekend?
- Do you have a mentor you can turn to if the negotiation process gets tricky or unfamiliar?
- Have you attended any recent conferences or seminars? If so, which ones?
Keep in mind that new agents won’t have the experience of seasoned professionals; real estate is definitely a “learn as you go” profession. This lack of experience can be a drawback at the negotiation table, especially in complex transactions. Are you comfortable being part of this agent’s learning process?
That said, new agents are hungry for both clients and experience, and as the old saying goes, “The hungry wolf hunts best.” An inexperienced agent will likely bend over backward to meet your needs and make you happy, and they’ll probably have plenty of time to give you one-on-one attention. Weigh what you want and what you’re comfortable with before signing a contract
Red Flags to Look Out For
According to ARELLO, as quoted by NAR, there are around 2 million active real estate agents in the United States. That means there are plenty of great agents to be had. It also means you’re likely to run into some bad apples.
Make sure you find an agent who’s right for you by keeping an eye out for these red flags.
1. They Want to List Your Home at a High Price
If you’re selling your home, the initial list price is key to a successful sale.
Hopefully, you’re planning on interviewing at least three listing agents. Each of these agents should be able to tell you what they’d like to list your home at. This list price is based on a number of factors, including your location, square footage, recent comparable sales in your area (called “comps), and the home’s age and condition.
All the agents you interview are using the same information to price your home, which means that all the quotes should be pretty similar. Beware of an agent who prices your home significantly higher than other agents you interviewed; this is a sign of inexperience, greed, or both.
A price that’s too high means that many prospective buyers won’t even look at your home because it’s out of their budget or simply too expensive for what they’d be getting. Your home will languish on the market for months longer than a more competitively priced home, and it might even sell for much less than it would have with an accurate starting price.
2. They’re a Poor Communicator
All too often, a lack of communication is the No. 1 complaint from people working with real estate agents.
Clear and timely communication is essential in the home buying and home selling process. Real estate agents need to be great communicators to effectively help their clients and ensure that this complicated process comes to a close successfully. In some cases, you’ll be communicating with this person on a daily basis.
Look carefully at a prospective agent’s emails to you, their marketing materials, and their website or blog. Is their writing clear and free of errors? Is it easy to understand what they’re talking about? When you initially contacted them, did they return your call or email in a timely fashion? During the interview, do they take the time to listen to what you’re saying, or do they cut you off and start talking?
Poor writing and communication skills could mean that the agent won’t convey important information quickly or clearly, or it might signal that they’re just too busy to work with you. Either way, move on.
3. They Don’t Ask Questions
Great agents are great listeners. They know that the key to a successful working relationship hinges on understanding what you want and need.
A good agent will take time to find out more about your dreams and goals. For example, if you’re buying a home, a good agent will want to know if you’re an investor or looking for a long-term home. If you’re selling, a good agent might ask about your timeline, pricing flexibility, and what you’re looking for in the relationship.
These are just a few examples; the point is that a good agent will ask questions to learn what you’re looking for. If the agent keeps mum, go with someone else.
4. Their Commission Is Low
The seller pays real estate commissions, which are is usually included in the list price of the home. Typically, commissions are 6%, which is split between the listing agent and buyer’s agent.
If an agent quotes you a commission lower than 5%, beware. They might be trying to win your business by offering you a deal, but this ultra-low commission will likely scare off other agents who don’t want to share such a low fee.
Buying and selling a home is emotional and stressful for many reasons. A lot is at stake, and it’s one of the biggest financial decisions you’ll make in your life. Finding the right agent for your situation is key to making sure the transaction goes smoothly and everyone walks away happy.
When I sold my first home, I didn’t give any thought to who my listing agent would be – a common mistake for first-time homebuyers. I went with the agent we’d used when we bought the home because she was friendly and we knew her.
While she was a good buyer’s agent, she was a terrible listing agent. She priced our home way too high for the market, did zero marketing, and as a result, it took over two years to sell. I finally wised up and found an amazing agent who sold our home within a few months of taking over the listing.
If I’d done my homework from the get-go, our home likely would have sold quickly and at a competitive price. Instead, it languished on the market, and we lost almost $40,000. It was an expensive mistake we’ll never make again. We’re getting ready to sell our current home, and you can bet we’ll be interviewing several agents to find the right one for our situation.
Do your research. Yes, it takes time and effort, but choosing the right agent will pay huge dividends in the long run.
Have you worked with a great (or not-so-great) agent when buying or selling your home? What was your experience like?