How To Choose A Good Real Estate Agent
By: Jeff Ostroff
In This Section:
All the tips you need to help you choose a good real estate agent that will work diligently in selling your house if they are your listing agent, or as a buyer's agent if you are buying a house. We even have tips on how to make your relationship with your real estate agent go as smoothly as possible, and scams to avoid.
HouseBuyingTips.com Buyers Warning
One of the biggest mistakes many home buyers make is assuming that their "buyers agent" is working for them. They could not be more wrong. Also, never let a real estate agent choose your attorney. You must choose your own attorney, not one with a cushy relationship to the salesperson who is trying to sell you a home.
"Real Estate Agent" Is Just Another Name For "Salesperson"
Don't ever lose sight of that fact. Their only mission is to sell, sell, sell to YOU. Don't ever let on that you are in a desperate situation, or that you need to sell a house fast to pay for emergency bills, or that you are in a desperate crunch to buy this house now, because you are being transferred into town this week. It's simply none of their business and as far as they are concerned, you are not in a rush to buy a house.
You cannot guarantee impartiality
If your real estate agent's commission is based on the selling price of a house you are about to buy, you cannot guarantee that the agent has your best interest at heart. The only way to guarantee that is to actually pay a large fee to a real buyer's agent who does not get a percentage of the selling price. But the fee almost removes the benefit of bypassing the commissioned real estate agent in the first place. To play it safe, never tell anyone but yourself how high you are willing to go. By law the seller's real estate agent has a fiduciary responsibility to the seller, and they WILL tell the seller everything you say, so pretend you are under police interrogation. The first thing the agent will do is ask you how high you are willing to go on the house. Don't fall for this trick. Just give them the price you want to pay for the house and if they ask how high you are willing to go, tell them that's it. If the seller does not agree there is no deal and you're taking your money elsewhere. If you are a home buyer, don't think your real estate agent is "going in to do battle on your behalf" with the seller's agent. That's just like your car salesman "going to get his manager's approval" on your offer for a new car. See CarBuyingTips.com for more on car buying scam.
Choosing A Good Real Estate Agent
If you are buying a house instead of selling a house, you really don't need a real estate agent. For many savvy home buyers, the only purpose a real estate agent serves is to get the buyer past the guard at a gated community, or to unlock the key to the seller's empty house from the lock box on the front door. They also handle the closing and escrow, which can be done instead by your property attorney. But if you know you have a great Real Estate Agent who will tenaciously hunt down houses matching your criteria, it can save you a lot of time. But you do still need a good property attorney, and no matter what you do, don't let your real estate agent choose your property attorney. You choose your own property attorney on your own.
Before hiring a real estate agent, I tell everyone to watch a movie that accurately portrays a large number of people in the Real Estate Agent industry:
Glengarry Glen Ross stars Al Pacino, Jack Lemmon, Alec Baldwin, Kevin Spacey, Alan Arkin, and Ed Harris. They all shine in this Pulitzer Prize-winning play adapted to the screen. It focuses on a back stabbing competitive office of real estate salesmen whose sales have dropped. Corporate executive motivator Alec Baldwin shows up and commands a sales contest among the agents in the tiny office. The winner gets a Cadillac, 2nd place gets a set of steak knives, 3rd place gets to keep his job, the others will be fired. Hey, maybe this is where they got the idea for Survivor. All sorts of back stabbing and rivalries begin. Pacino won an Oscar nomination, but I thought Lemmon was the shining star here, doing the best work of his career.
Web sites To Help You Find A Real Estate Agent
Try HomeGain. Their free site with over 1.7 million consumers and 42,000 real estate agents registered, matches informed, confident homeowners and buyers like you and I with the most productive, highly qualified real estate agents in your area. You remain anonymous as agents submit detailed marketing proposals online. You can compare real estate agent qualifications and marketing plans before choosing the agent you want to work with. Other features give you the facts on prospective agents' backgrounds, experience, local sales, commission rates, and more. You can use these reports to find agents who will list your house at a lower rate. Be sure to use their "What's My Home Worth?" feature. Whether you are buying or selling your home, everyone should at least start on HomeGain.
There are good and bad real estate agents, as in other businesses. I'm sure I'll get a lot of hate emails from paranoid real estate people for this, but I'm going to point out some specific examples that I have come across that testify to the degree of greed there is in the real estate industry. We are not trying to portray all agents as bad.
A real estate agent we know went to lunch and left a few "real hot leads" on her desk of sellers who were interested in bidding on a property. When she returned she discovered another agent in the office had grabbed the leads, contacted one of the buyers, and closed the deal, stealing the commission.
A real estate agent we know told us that she knows a few real estate agents that spend all their time looking through the MLS listings for the houses that pay higher overall commissions or higher commissions to the buyer's agent. These agents then shove these high commissioned homes down the throats of unsuspecting buyers looking for a "good deal". Greed is good.
One real estate agent would get really antsy and complain if you did not buy the first house they take you to. It seems they only cared about getting that commissions and everything else was secondary.
Some real estate agents make home buyers pay a fee up front that does not even guarantee them a real buyer's agent. The fee is just a guarantee for the agent that the buyer is now committed to buying a house through them.
There are also some very good real estate agents
We had an agent who sold my grandmother's condo and she was a true professional who sold it within 8 weeks of listing, even though the president of the condo homeowners association did everything humanly possible to withhold required paperwork and thwart the sale. This agent on her own initiative brought in a broom and swept up some dead bugs in the house because she knew that would be a turnoff to prospective buyers. She even arranged for a repairman to fix the AC unit before the empty unit was shown to buyers.
Our neighbor across the street had a real good agent who sold her house in 9 days. Her daughter up the street sold her house in 2 weeks.
Choose a successful Real Estate Agent
The better agents have success selling homes in the neighborhood you are looking in. Often you'll find the same 2 or 3 agents closing deals like crazy in a neighborhood. Real estate agents often have a full page ad in the local home classified magazines listing houses grouped in one area. Successful agents have lots of houses listed. Part timers and unsuccessful agents may have few if any homes listed. I really have a hard time recommending someone who does this as a part time second job. I just do not see how you can get the attention you deserve from a part timer.
Where to look for Real estate agents
Probably the best source is people you know. They will tell you if they liked or hated their real estate agent. You want a real estate agent who is professional, aggressive, and maybe wins the monthly sales awards in their office. Certainly the large well funded real estate companies have certain minimum standards for business practices, ethics, and customer satisfaction. You'll still find bad apples at the larger firms, but maybe not as many as you would in small unaffiliated brokerage offices with no published standards or ethics practices. Ask the real estate agent to show you all the state required disclosure forms so you know ahead of time all your rights. You don't want any surprises later on. As I mentioned before, make good use of online sites such as HomeGain to help you locate a real estate agent based on their background, experience, local sales, commission rates and more.
Choose a Real Estate Agent that has the right personality
Your relationship with your Real Estate Agent can turn sour from bad communication. The Real Estate Agent may grow impatient that you are not making any offers on homes that match your list of criteria. They might start to complain that you are not serious about buying and that you are just wasting your time. You might start to complain that all they care about is selling the first house they take you to. These are communications problems that can be avoided if proper communication is disclosed up front. If you know you are an impatient shopper, or that you have to look at a dozen homes before you make your mind up, let the real estate agent know. Some are more patient than others. Make sure they have an accurate list house criteria you are looking for, and don't spring any surprises on them after you have seen 10 houses. Give them a written list of all your house buying criteria. Make sure your real estate agent knows every last detail of what type of house you are looking for.
Many Real estate agents will not show you new construction homes
A lot of builders refuse to deal with real estate agents because they don't want to pay them a commission. The builder feels their homes will sell themselves and they don't need to pay any Real Estate Agent commissions. Because of this, many Real estate agents won't tell you about new construction homes, even if they fit your criteria list and price range.
Stupid Real Estate Agent Tricks
I could swear some Real estate agents are the most unimaginable people and use the same useless banter to get you to buy or sell. Here's some common phrases they'll pull on you either in the ads, during house shopping, or in negotiations.
Tacky, real tacky!
I see too many real estate agent ads with cars in the driveway! I'll bet half those cars belong to the idiot who took the picture. That's the best way to cheapen the look of your house, and any decent real estate agent would not allow this.
Adverse-tisements: "Boca's Best Kept Secret"
If it's such a good secret, why do I know about it? Why has it been in the grocery store real estate listings for 6 months?
Adverse-tisements: "Hurry, won't last at this price!"
Yeah, you mean it won't sell at this price.
Other common annoying phrases you'll see: "Too good to be true!"
Give us a break. The only houses that are too good to be true are Bill Gates, and Donald Trump's houses.
"Now this one's a steal."
If it's such a steal, why hasn't anyone "stolen" it yet? They say that about every house you visit. The seller wants $15,000 too much, but gee what a steal.
"Oh, this house is so beautiful!"
They usually combine this trick with the one above, and use them on every house. The truth is they see so many houses they are probably numb to it all.
"Better than new!!!!"
OK....Whatever that means. Expect it to be used with "Too good to be true".
"A buyer looked at this house today and is interested in making an offer".
Yeah, right. If they were really interested, the Real Estate Agent would have a deposit check already. This is one of the oldest tricks in the book. Actually, many car dealers use this one and we warn car buyers about it on CarBuyingTips.com
"You'll never get that high of an asking price for your house".
This is one of the top complaints I hear from sellers about their agent. You would think the agent knows more about property values, but often the appraisal sides with the seller. Agents who pull this trick seem to want you to list your house for less to get a quick sale.
This looked cool maybe 20 years ago
Many agents used to pose with a cell phone in their ad for that look of prestige. I always thought it looked stupid. Now everyone has cell phones, even kids walking around in middle schools, so this picture just makes the agent look like a goofball. Everyone we show this picture to just laughs, and I'm sure they are not laughing with him.
Hey buddy, if you really want to make a statement, you would be much better off posing next to a "For Sale" sign with happy sellers that says "SOLD". Then people might take you seriously.
Just an observation on Real Estate Agent ads
I've noticed that some agents are really good about content in their ads, while others need some real coaching. Some ads have the top 30% of the page taken up by the agent's oversized photo of their whole family and kids and large type contact information. Are they selling themselves or your house? The better ones manage to get it all to fit into a one inch stripe across the top or bottom, including their portrait.
Common complaints we get about real estate agents
Hopefully none of these issues will happen to you, but you should be aware that they are common. These are the most common complaints we receive about real estate agents from our visitors:
The buyer's real estate agent continuously tries to get them to buy houses for much more than they told the agents that they wanted to pay. One person we know specifically told his agents $160k was the top limit. But the agents kept dragging them to homes priced at $180k. The agent might tell you "Come on, just take a look anyway, it will give you ideas for other houses". Translation: Once I get you into this house to look around, I can get you to buy and I'll get a bigger commission. Any agent that rushes you is just looking for a quick commission. Unfortunately, selling real estate takes a lot of patience, and if they don't have patience, they need to choose another profession, and let the Real estate agents who do have patience take over.
The real estate agent tells the buyer there are no houses in the area in their price range. But gee, there some for only $15,000 more. The savvy buyer then fires the agent and finds plenty of houses in the area in his price range by searching for homes on the Internet real estate classifieds.
If you're selling the house yourself, real estate agents start calling you stating they have a client waiting to buy the house, the agent just needs to come take a quick look before they bring them over. This is a scam, there is no buyer. The agent shows up and tries to get you to sign an exclusive contract naming them as your listing agent. For more details on this scam, read How To Sell You House.
The buyer calls a Real Estate Agent to hire them for buying a house. But the agent never calls back after several calls. Ever since the recession of the early 1990's I have been repeating my brilliant observation that businesses might sell something once in a while if they would just return a phone call. I could swear that the reason we have recessions is because people don't return phone calls.
A potential buyer emails an agent about hiring them, but the agent never responds back, even after several emails.
The listing Real Estate Agent used too much poetic license and embellished the description of the house. In one case one of our visitors reported the listing described "hardwood floors", but it was cheap plastic imitation wood, only in one room.
Agents didn't show disclosure forms buyers stating who they were working for.
The buyer's real estate agent starts to grow impatient and complains if the buyer has not made an offer by the 3rd house. Most experts recommend that you visit at least 10 houses before you make a decision.
Questions to ask a prospective real estate agent
Ask if they are licensed and if it's up to date. I actually thought this one up on my own! A no brainer.
First of all, ask if they are part time or full time, because you want a full time agent to assure you get the most attention. Look at it this way: if they only work part time, your house is only marketed part time.
Ask them what type of training they take to stay current, and ask them how good are they at using the Internet, and what type of training they have for marketing homes on the web. Since many consumers now use the Internet to locate homes, you better have an Internet savvy real estate agent. In many cases, people reported back to us that they were more savvy at finding homes to look at than their agent. There are several highly trafficked home classifieds web sites. They better know how to get your house listed on them.
Ask them if they'll take a lower commission. If you're selling a $150,000 home, every percent point less that you can negotiate down on their commission saves you $1500. Not bad for a few minutes worth of work.
Ask them if they are a broker or an agent. Brokers are more experienced, and it's more difficult to become a broker, so they are more resourceful.
Home buyers and home sellers should both ask their agent if they will get them a printout of all the recent selling prices AND the original listing prices of homes in their area, showing what the owners paid for them, how much they sold for, and full details on the homes. Selling price is useful, but knowing what they listed for and how much the sellers dropped in price is a great gauge of the real estate market in your area.
For sellers, ask the agent how they plan to market and sell your house. Get it all in writing, absolutely no verbal promises. You want them to blitz the market and get your house into the premium listings and the free listings, and all the online web sites. You want your house to be found. You want no surprises or excuses later on. Pin them down and get their battle plan in writing now. This is a major source of miscommunications and resentment when the seller is expecting several things to be done, and all the agent does is list it in the MLS.
Ask if they are willing to offer more commission to the buyer's agent. There are many savvy buyers agents just looking for houses whose selling agent pays that extra 1/2% or more. This incentive can help sell the house quickly if needed.
Ask if they will accept a contract for 90 days or less. Many agents will force you into exclusive contracts for 6 months to a year or more. But what if your agent sucks? Then your house sits there for a year not being marketed, while you keep paying mortgage payments. I don't think so. This is what we warn car buyers of on CarBuyingTips.com. We tell them to stay out of long term leases. A lease is a contract, if you get a bad car, you're stuck. The same strategy applies to real estate agents. A 60 day contract is the max that you want, and ask for all their disclosure forms to study first, BEFORE YOU SIGN! Just tell the agent that they won't need more than 60-90 days if they are really as good as their flapping gums are making them appear.
Watch out for the exclusivity clause time limit!
Many real estate agents will hand you a contract to sign that has their 6 month or longer exclusivity clause permanently printed on the contract. Many people foolishly sign this, not knowing the potential for pain that they are signing up to. Because the contract was permanently printed, many people also incorrectly think that the terms are not negotiable. Everything is negotiable in life! You can add addendum's to it, or cross it out. Negotiate out long term clauses, or any other undesirables.
Do NOT sign a long term contract, and DO NOT pay money up front.
Real estate agents get paid by commission when they sell the house. If they do not sell the house, they don't deserve any commission, so there's no need whatsoever to pay in advance or any other time for a job not done. No commission when there is a deposit, only when there is a closing, no exceptions! No Excuses!
Read off my common complaint list about real estate agents mentioned earlier on this page, and ask the agent if any of that applies to them.
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