Choosing a real estate agent is like any other relationship; how satisfied you are is going to depend largely on chemistry and compatibility. Even the top-ranked agents in your area may not be a good fit for you personally, depending on what you hope to get out of the transaction.
But often the problem is that inexperienced and first-time buyers may not know how to effectively evaluate an agent; almost half of buyers don’t fully understand how agent commission works.
Read on, and we’ll discuss some of the factors that can determine whether you mesh with your agent, how to tell if they’re qualified, and go into detail about how to interview an agent (which is no easy feat, considering they’re an expert negotiator!).
Table of Contents
- Do I Need an Agent to Buy or Sell?
- The Qualities to Look for In a Realtor
- How to Interview a Realtor
- Should I Consider a Discount Agent?
- Related Reading
Do I Need an Agent to Buy or Sell?
Maybe interviewing and picking an agent seems like too much work, or maybe you’re tempted by the savings of going solo, with no agent. Do you actually need an agent to buy or sell a house? Let’s look at each side of the argument.
This one’s a no-brainer for buyers; while buyers don’t technically need an agent to buy a home, an agent brings a ton of expertise to the table, and for zero cost. That’s because the traditional real estate commission is paid by the seller, out of the proceeds from the sale.
A good buyer’s agent can show you new properties the moment they hit the market, and will often hear about new listings in advance. They can also offer intel about the mindset of the other side— are they a highly motivated seller, under pressure to offload the property? Are they hopelessly set on an inflated price?
A good buyer’s agent will also get you the best possible price at the negotiating table, as well as any other credits and concessions you might be entitled to. To be honest, it’s hard to think of a reason why a buyer wouldn’t want to use an agent.
This question isn’t so cut-and-dried for sellers. The seller is expected to pay the 6% real estate commission out of the proceeds from the sale; 3% to their listing agent, and 3% to the buyer’s agent. For a home that sells for the U.S. median home value of $257,000, that comes to $15,420. That’s no small amount of money.
For sellers, then, this is more of a cost-benefit analysis. What are you, the seller, getting for the money you’re paying?
For starters, your home is going to sell for the highest possible price. Your listing agent is making a percentage-based commission, which means that the more money you make, the more money they make.
With your incentives aligned like this, they’ll go to the negotiating table with the intention of getting you the best price possible. That alone will probably pay for their commission, and then some; data from the National Association of Realtors (NAR) shows that agent-assisted homes sold for an average of $280,000, compared to $200,000 for FSBO sales.
They can offer other advantages, too. A good listing agent can help you with:
- Staging: Making your home as appealing as possible to buyers
- Marketing: Making sure the largest number of buyers see your property
- Showings: Most buyers decide if they like a house within eight seconds, so a smooth, welcoming showing is vital
- Negotiations: Your agent will go bat for you when the buyer comes back with a list of negotiations, keeping expectations in check for everyone
- Paperwork: An agent knows what legal paperwork you need throughout the transaction, from listing disclosures to closing documents
The upshot? For both buyers and sellers, working with an agent can offer huge benefits.
So how do you choose the right realtor for you?
The Qualities to Look for In a Realtor
If you’ve decided a realtor is right for you, it’s time to figure out how to choose a realtor and thoroughly vet them.
This list covers the most important qualities to feel out in a real estate agent. Note that while many of these qualities are objective a lot of them are subjective.
For example, “good communication” means different things to different people. An agent who’s extremely communicative, and proactively checks in with their clients will be perfect for clients who expect frequent communication. But for clients who prefer a more laid-back approach, this type of agent can seem suffocating.
As we go down the list of agent qualities, we’ll be discussing each one in both objective terms and, when appropriate, in terms of how that quality might fit with your style. You’ll need to decide for yourself what traits are most important to you when hiring an agent.
This is a big one. Just as you’d expect your surgeon or attorney to have a lot of experience, you also want a seasoned real estate agent. In fact, experience is even more important when it comes to real estate agents; there’s no graduate school for realtors. Real estate agents learn real estate almost entirely on the job, which makes experience one of the most important qualifications.
That being said, you don’t necessarily always want to go for the agent with the most experience. An experienced realtor will likely have a large portfolio of clients they have to manage, so you’re not always getting their undivided attention.
On the other hand, if you’re a first-time home buyer, an agent who’s establishing their practice can often be a great fit when it comes to enthusiasm and availability. If you’re thinking of trying out a newer agent, remember to ask about their qualifications and, especially, their mentors. A novice agent who apprenticed under a great agent can definitely offer a high level of services.
Many sellers don’t know a lot about the nuts and bolts of the sale process, and an agent should be able to answer any and all questions their clients have. Whether they’re about pricing, staging, financing, or any other facet of the transaction, the agent should be able to bring a big picture, and a customized, detailed perspective to the discussion.
Note: In the section “How to Interview a Realtor” below we’ll discuss some of the ways to quiz your agents real estate knowledge and ensure they’re qualified for the job.
As we discussed above, this can be a matter of personal taste; whether you prefer to have a lot of frequent communication, or to be left alone most of the time, you want an agent whose communication style mirrors yours. Incompatibility in this area is sure to sink any agent-client relationship.
That being said, there are some basic standards that any agent should observe. They should promptly convey any offers or developments to you, return any calls or texts in a reasonable amount of time, and just generally keep you in the loop.
Ironically, the good communication starts with you! Set clear, objective standards for communications (e.g. no calls after 5pm, texting is preferred, etc.) and make sure your agent abides by the rules.
Your ideal agent will have an extensive network of contacts they can tap in to to promote your listing. That can mean a robust social media presence, a weekly newsletter with thousands of subscribers, or maybe they just seem to know everyone in town. The bottom line is, the better connected they are, the better your sale is going to go.
Let’s say you live in a big city, and you’re looking at the #1 agent in Dallas, or New York City.
That agent might have a stellar track record, and tons of experience, but that doesn’t necessarily mean they know your neighborhood, or how best to sell your type of property. When you’re looking for an agent, you want someone who knows your neighborhood and the immediate area intimately, understanding the fluctuations of the local market. Sometimes being one street over can impact your listing price by thousands of dollars.
They can’t get you the best possible deal if they don’t understand the local dynamics.
Traditionally, most people found their agents through referrals from friends or family. This system is simple, transparent, and effective; if an agent did a great job for someone you know, odds are they’ll do right by you. And in 2020, don’t just rely on in-person referrals; look into online reviews to find outside perspectives.
Basic honesty is a requirement from any agent. They need to be open, honest, and forthcoming throughout the transaction. If you find out they’re withholding information from you— say, about an offer someone put on your house that the agent didn’t think was good enough to tell you about— this is a huge red flag.
But honesty also applies in other scenarios. You want an agent who’ll be honest with you even when it may be uncomfortable. If you’re insisting on a list price that’s simply way too high, or if your home is inadequately staged, you want an agent who’s honest enough to tell you that, instead of letting you sabotage your own sale.
Our partner Clever Real Estate connects sellers with pre-vetted, top quality agents, so you won’t have to worry about your agent’s integrity. Clever doesn’t choose a real estate agents for you – instead, you get several top picks to check out before you sign a contract.
They also let you interview as many agents as you like to find the best fit, so you can take your time to find your ideal real estate partner. Contact Clever today for a free, no obligation consultation!
Need Help Finding Your Perfect Agent?
Our friends at Clever Real Estate give you several options so you can choose the best agent possible. Find out how Clever saves you thousands on commission.
How to Interview a Realtor
Interviewing a real estate agent can be a difficult experience; after all, this is someone who reads people, negotiates, and makes good impressions for a living. But it can be done, if you know what to ask. Here’s a list of questions that can help you determine whether this is the agent for you.
How Long Have You Been a Professional Real Estate Agent?
This one gets right to the issue of experience. You want an agent with at least a few years of experience, so you know they’ve been through a lot of different types of transactions.
Is This Your Full Time Job?
While this may seem intrusive to some, this question gets to the issues of availability and competence. There are many part-time real estate agents who hold down full time jobs to pay the bills; these agents will necessarily have less availability than a full-time agent.
Then there’s the issue of competence. If they can’t sell enough properties to make a living, you should know that.
How Many Deals Did You Close Last Year?
According to the National Association of Realtors (NAR), the average real estate agent handles 12 transactions a year, so you can use that as a baseline. If their answer is in the single digits, you know they either aren’t very experienced, or aren’t very active.
What Credentials Do You Have? Who Mentored Your?
As we touched on earlier, there’s no graduate school for real estate agents beyond the basic licensing requirements. Most learn on the job, or through seminars or certificate courses. It can be illuminating to find out how their career path has played out; a novice agent who’s mentored by a top local agent, and holds several certificates may offer more expertise than a mid-career agent who’s figuring things out as they go.
Can You Provide References?
This question also touches on their experience and expertise. Former clients will be able to give you the best perspective on that agent’s abilities, though keep in mind that no agent is going to give you a reference who might trash them. And don’t just ask for the references; actually take the time to follow through and contact them!
Are You Familiar with My Neighborhood?
Different areas in a city can be radically different markets; a rapidly gentrifying neighborhood is going to be a totally different sales environment than a mature, old money neighborhood. Make sure your agent understands your neighborhood’s dynamic.
What’s Your “List Price to Sales Price” Ratio?
A listing agent should negotiate a final price that’s equal to or, ideally, higher than the list price, while a buyer’s agent should negotiate a final price that’s less than the list price. This ratio will quickly give you an idea of how good the agent’s negotiation skills are; a listing agent’s ratio should be greater than 100%, while a buyer’s agent should be less.
That said, this isn’t an infallible metric; in super hot markets, list prices are just starting points, and most properties close above ask, so don’t put too much weight on this number.
How Would You Sell My House/Help Me Find My Dream Home?
This question will give you a big picture idea of how they work, but don’t miss the opportunity to ask for detailed answers, too. Do they help with staging and photography? What kind of social media presence do they have? What are their preferred channels for marketing? Even when they’re put on the spot, they should be able to outline a general plan of action.
What Do You Do Better Than Any Other Agent?
This is their opportunity to showcase their strengths— and for you to see if their strengths dovetail with your priorities. If you’re looking for a strong marketer, and they list marketing as a strength, you know you have a good match.
How Much Do You Charge?
The traditional real estate commission is 6%– 3% for the listing agent and 3% for the buyer’s agent. But you shouldn’t just assume this is what you’ll be paying. Make sure you ask, and receive definitive answers.
And don’t forget— everything in a real estate transaction is negotiable. That includes the commission!
Can You Recommend Third-Party Vendors?
Most agents have home inspectors, title companies, and mortgage brokers that they habitually work with. Ask for a list of these vendors, and ask the agent why they prefer to work with each vendor.
If the list mentions any “affiliated” vendors, that could mean that the agent is receiving kickbacks from working with this vendor— and that extra charge is likely getting passed onto you. Make sure you ask about any affiliated vendors, and how their rates compare to market rates.
Will I Be Able to Review Documents Before Signing?
An honest agent will let you look over any documents they expect you to sign well in advance. Ask for any disclosure forms, as well as the listing agreement if you’re selling, or the buyer’s broker agreement if you’re buying.
Do You Guarantee Satisfaction?
A signed contract is binding, but most agents will let you cancel an agreement if you’re not happy with their services. You should ask if they allow this, and if they guarantee their services to you. Take this opportunity to ask if they’ve experienced any canceled agreements in the past and, if yes, how many and why.
Have I Missed Anything?
If you’re not a real estate professional, it’s likely that you’ve overlooked an area of their expertise, or forgot to ask an important question. If the agent answers this question easily and openly, that’s a great indicator not only of their expertise but of their honesty.
Should I Consider a Discount Agent?
A discount agent costs less than a traditional, full service agent, but many of them also offer fewer services. Some of these agents work for as little as 1%, but many of them don’t conduct showings, don’t help you market your home, and may have severely restricted availability.
If you have a market-ready property in a hot market, or if you have personal expertise that can help you replace a portion of an agent’s services (let’s say you’re an interior designer who can handle staging, or a professional marketer who can publicize your own property), it might be worth it to pay less to a discount agent and take on some of those responsibilities yourself.
But most sellers will need the full spectrum of agent services. Again, if you have a great property in a hot market, you might be able to easily sell it without an agent, but the majority of sellers will be making a serious sacrifice in working with a discount agent— sacrificing not only time and convenience, but leaving real money on the table.
However, there is an alternative. Companies, like our partner Clever Real Estate, connect sellers with agents who offer a full service selling experience for a fraction of the normal cost.
That means sellers get everything they’d get from a full commission agent, from staging help, to open houses, to negotiations and closing assistance, for thousands less than usual. Clever agents sell your home for a flat fee of $3,000, or 1% if your home sells for more than $350,000, and Clever only contracts with elite, pre-vetted agents.
These agents use their expertise and network to quickly sell the properties referred to them by Clever, so while they might make less on each transaction, they more than make up for it in quantity. That means it’s a true win-win, for both the agent and the seller. Contact Clever today for a free, no obligation consultation, and get started on your real estate journey!
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