How to Select a Good Real Estate Agent
August 1, 2020
Sellers are usually confused if they should hire a professional or an agent to assist them. It seems the obvious answer is yes since they are experts in their field. Yet, a lot of it depends on your budget, needs, and requirements. Several competent agents across the country have years of experience in selling homes. But how do you know which one to pick?
Agents advertise, promote, and refer their services across regions and neighborhoods. Many sellers end up asking recommendations from friends or neighbors who have previously hired an agent. Research has indicated that nearly 40% of sellers found their agent through a referral by a neighbor, friend, colleague, or relative. About 12% used an agent they have previously worked with before. The rest found their agents by walking into real estate agencies, websites, research, or answering to direct mail.
What does this tell you? That you can use multiple routes to select an agent, but you won’t know how good they are till you work with them. Sellers also work with previously known agents for ease, convenience, and because they trust them. What about sellers who are selling homes for the first time? Who can they trust? In this article, we will discuss how to select an excellent agent.
Mentioned below are some qualities, criteria that constitute an excellent real estate agent.
Knowledge
Being a licensed agent isn’t enough. A competent and good agent will have knowledge, skills, experience, and know-how to navigate the market. His/her years of experience will have proven handy to their learning experience. A knowledgeable agent will be familiar with the home selling and buying process, the local community, laws, market situation, and negotiation tactics. Hard skills aside, he/she will have excellent people skills, relations with the local vendors, professional conduct, and communication strategies.
Regulations
Selling and buying a home is a big financial transaction with legal implications. Hence the government has strict control over licenses for agents. This is for the safety of consumers from criminal or incompetent agents. Real estate agents have to strictly follow the rules and regulations to earn and maintain their license. These rules provide a safety net for consumers. A good agent will have an updated license and understand the government regulations for a sale.
To clarify, licensed agents do know the basics of selling and buying a house. Ultimately, you need more than just a licensed agent for a good and optimal sale.
Commission
Agent commissions are fixed in a compact range of 5%-6% across the United States. This figure doesn’t vary despite additional services, size of the home, or the home’s price. As a homeowner, you must know this before you hire an agent. Listing agents split their commission with the agent from the buyer’s side. They also bear costs for marketing, staging, and promotions.
Did you know that the commission is nearly twice of what agents charge in Europe? Or that agents in the United Kingdom charge 1%-3% commission? Global price differences aside, American home sales also take longer than other countries. American agents manage to close between 5-10 transactions annually while a British agent will close anywhere up to 40. This is mainly due to the American agents building leads, sourcing sellers, and working with buyers for an extended period of time.
Value
The above criteria are a great way to discover an excellent agent. But the most critical question you should be asking is HOW DOES THE AGENT ADD VALUE? Is the value quantifiable?
Our previous articles have provided you with a treasure trove of information about value, optimal price, and selling your home. In those articles, we have always asked you-IS THE THING YOU ARE CONSIDERING WORTH IT? So, to apply it here, is hiring an agent worth the commission cost? Agents will always advise you that they are. The selling and buying of a home has so many steps and legal requirements that it can confuse a common man. It makes sense to trust a professional. But how is the professional adding value to your sale?
A good agent will add value by assisting the buyer in finding leads that they didn’t have before. For sellers, a good agent will be one who doesn’t advise them to settle for less because it means a quick sale. The worst kind of agents will be the ones who make buyers overpay, or sellers sell quickly and cheaply.
Agents are well-informed, sales experts, and their job is to give you the price you desire. A good agent will also be responsible for making you aware of the reality.
Research
The easiest option would seem to hire an agent who has previously worked with your neighbor or colleague. Is it the best and the optimal choice for you? Your neighbor or colleague may have wanted to sell under duress or quickly. He/she may have even ended up getting a price lower than expected. Are you aware of all these factors before you hire their agent?
It is on you, as a homeowner to research the agent and agencies in question. You are within your rights to visit a few agents, ask questions, and compare them for your benefit.
During your research, you can make a list of questions to ask your agent. These questions give you a clearer picture and help you in making a decision. We will provide you a few examples, and you can either use these or create your own-
- How many transactions have you done in the last 12 months?
- Why should I hire you instead of XYZ agent/agency?
- How do you add value to my sale/purchase?
- Have you worked in my neighborhood/area before?
- Have you sold homes similar to mine?
Certain agents have a niche or an area they prefer. Before you hire them, it is best to understand their capabilities and past experiences. A competent and ethical agent will be able to offer clear, concise answers to your questions. A respected, professional agent will also have completed 10-12 transactions in a year. Any less than that and you should be considering another agent or agency. There is nothing wrong with giving a new or inexperienced agent a chance, but it does raise the risks for your sale.
A strong recommendation from us is that avoid hiring your friend or family as a real estate agent. This can complicate matters and strain relationships. They may be great at their job, but the personal element can make it difficult for you to communicate honestly.
Meeting Goals
A listing agent can provide value/support in 4 goals-
- Valuation
- Listing
- Marketing
- Negotiation
A good agent should be able to offer you a short valuation of your home. He/she will also come up with a pricing strategy that will get you the optimal price for your home. Creating a listing is an art that requires experience to master. A smart and competent agent can craft an appropriate listing and ensure it captures the attention of the buyer. Marketing includes holding a perfectly timed open house, spreading information through all media forms, and promoting the listing. The best agents are well versed in negotiation and familiar through the process.
Some sellers don’t have experience or negotiation skills. First time sellers are confused or worried and end up taking the first offer they get. A good agent’s role is to comfort them and complete the negotiation on their behalf. The agent will also advise you not to jump at the first offer. Poor negotiation tactics could cause you a significant decrease in selling price.
Quality
Agents have to split their commission with the buyer’s agent, brokerage firm, marketing costs, etc. This gives them little to no incentive to spend more time making quality sales. They would instead take a few hundred dollars less and wrap the deal immediately than wait for the right buyer. As a homeowner and seller, you should know the quality of the sale and agent matters.
Agents don’t want to risk waiting for other offers because it stretches the sale. It also means marketing more, holding another open house or viewing, and waiting for a good offer. However, this is directly in contrast with an agent selling their own home. Agents field several offers and wait longer on their homes than they do for their clients. Remember this before you trust your agent blindly.
These are the qualities and criteria of a good agent. We also looked at how you should go about hiring an agent. Despite our research, it is still a better idea to work with a professional real estate agent.
Why should you hire a real estate agent?
- Agents have access to Multiple Listing Services or MLS and can post homes for sale in the system. Different real estate websites and apps access the homes listed on these databases and share them with interested buyers. This exposure is possible only with an agent.
- Good, helpful agents can simplify the legal and financial process for first-time buyers and sellers
- Since agents don’t have any personal stakes in your home, they can be objective and give you a real idea of the market scenario and estimated selling price
You can ask to visit home viewings or open houses held by the agent to understand their role and way of working. Talking to existing or previous clients of the agent can let you know if the agent would be a good fit for you personally. A practical seller or buyer would hire an agent but also trust his/her judgment. Use the agent to assist and support you and make your own decision after researching all the facts. Putting in some extra time or effort would allow you to gain optimal profit from selling your home. Pick an agent who has the knowledge, local networks, experience, and is updated with all the market trends.