How to Buy a Home - Step Four: Choose a Real Estate Agent

If you didn’t catch our last blog post on choosing a neighborhood before you start your home search, you can get caught up here. In today’s blog, we take a look at the fourth step to purchasing a home: choosing a real estate agent.

Why do I need a real estate agent if there’s Zillow?

In today’s high-tech DIY world, surfing real estate listings online has become an American pastime. Shopping for a home in your pajamas on your couch has never been so convenient.

But, what happens when you want to see a house in person? And…what if you fall in love with that house and want to submit an offer on the spot? What should you offer? What are the other homes in the neighborhood selling for?

Once you’ve been Pre-Approved or Cash Approved™ and are ready to move from scrolling on Zillow to unlocking the door to your dream home for the first time, you’re going to need the right real estate agent.

Although showing homes is a big part of an agent’s job during the house hunting phase, it’s important that you understand how an agent can help once you purchase a home and it goes under contract. As with any profession, there will be good and bad apples. While an average agent might complete only the minimum requirements to cash out on his or her commission, a good agent will wear many hats throughout your homebuying process including negotiator, problem solver and therapist.

Remember, buying a home is one of the biggest purchases of your life and an agent can make or break your homebuying experience, so it’s vital you pick one who will get you to the finish line.

Here are some tips to consider when you’re choosing a real estate agent:

Do’s and Don’ts of where to look for an agent

When looking for an agent, you can use many online tools for research. But don’t dismiss interviewing agents face-to-face to get a feel for how they communicate before making a decision.

Here are some things to keep in mind:

• Do ask trusted resources such as friends and family if they have had a good experience with an agent.
  
• Don’t hire someone simply because they are a family or friend connection.
  
• Do visit open houses and check out “for sale” signs in the neighborhoods you are interested in. Consider interviewing agents hosting those open houses. Take note of which listing agents and brokerages are most active in that area.
  
• Don’t determine how much an agent can or can’t help you based solely on their current book of business.
  
• Do look up online reviews of agents and take them into consideration.
  
• Don’t make a decision solely based on reviews or online presence, though. Many successful veteran agents choose to not focus on technology for marketing.
  
• Do look for an agent who has experience helping clients similar to you (first-time homebuyers, empty nesters).
  
• Don’t make an agent’s experience with clients a deal-breaker, however.

Find an agent who knows the neighborhood

An agent's ability to “pull comps”-a list of comparable homes that have sold within a specified area and time frame is one of their most valuable assets. The ability to argue or defend how comparable sales affect market value of the property will be one of the most powerful tools when negotiating price.

An agent should have a thorough understanding of the housing inventory in the neighborhood you are interested in. They will know what has sold or not sold recently.

Find an agent who has experience managing and closing transactions

Showing homes is a critical part of how agents help you, but an agent’s ultimate job is to close your deal. They don’t get paid unless it closes. On House Hunters, we see homebuyers choosing a house and in the next scene, they’re playing football in the backyard as the credits roll.

In real time though, closing a home can take weeks. There are hundreds of laws, contingencies and deadlines in a real estate transaction to address. There will be a number of people working on your transaction, including a lender, an inspector, a title company, and possibly an attorney . These professionals will make up your homebuying “dream team” and your agent will be the glue.

A good agent will know how to navigate your purchase agreement. They will be proactive in making sure you satisfy all requirements and deadlines from the moment you submit an offer to closing on a home. They will be the central point of contact for the seller’s agent and your dream team.

Need a survey? Need original building plans or copies of permits? Need an extension on your inspection period? Your agent should take responsibility for directing and coordinating all of these processes and people and advise you every step of the way. They will advocate on your behalf when they are legally able and they will know when they aren’t, such as in the case of an appraisal or inspection report. Don’t try to DIY a Realtor’s job. You will need a licensed professional who understands real estate laws and regulations for your state.

What does a good agent look like?

Know there will be unexpected challenges on your transaction so hire an agent who is a creative problem solver and can work cooperatively with the seller’s agent and your dream team to close the transaction on time.

A good agent has more than just industry experience and market knowledge. They need to be able to troubleshoot problems cooperatively and effectively with the seller’s listing agent.

Here are some indicators to look out for:

Red Flags

• Impatient, aggressive or pushy behavior
• They persist in steering you down a path you don’t want to pursue
• They offer a discount on their commission as a reason you should work with them
• They don’t follow up on your communication the same or next day
• Their broker doesn’t have an established or good reputation
• They are picky in what they will or won’t help you with
• They speak poorly of other agents, brokerages, buyers or sellers
• They make you uncomfortable in any way

Green Flags

• They are persuasive and can develop a good rapport quickly with anyone
• They are patient and flexible with you-even if you keep changing your mind
• They are creative and cooperative with other agents in solving problems
• They are always a few steps ahead of the homebuying process when preparing you and the paperwork
• They are responsive with a high sense of urgency for deadlines
• They are good listeners and empathetic
• They are trustworthy and make you feel comfortable
• They are natural educators who explain the process clearly

Pro-Tip: Understand that only sellers pay real estate agents a commission. Be wary of agents offering discounted commissions upfront for service. An agent’s commission can be negotiable and sometimes an agent will contribute a portion of theirs as a “best and final” negotiation strategy they keep in their back pocket to push a deal over the finish line at the right time and get it closed.

Here are some questions to ask any agent before hiring them

• How long have they been in the business? More importantly: how many transactions have they closed and when was the last one?
• What days and times are they available to help you? Does it coincide with your schedule?
• Are they part of a team or do they work alone? Do they have an assistant who you will be relying upon?
• How do they communicate? Do they only text? Do they return calls or texts on the same day?
• How long have they lived and sold real estate in the area? What neighborhoods do they focus on? What is their knowledge of that market and do they see any patterns or trends?
• What are the comparable properties that have sold in the neighborhood during the past 6-12 months? What are their opinions about price, housing inventory and other trends for purchasing in that neighborhood?
• What is the median price of a home in your ideal neighborhood? Do they think your budget and timing is realistic?
• Do they have confidence that the lender you want to work with can close the deal as fast as you need?
• Will they represent only you as a buyer’s agent, or is there any chance they will represent the seller as well? Ask what the laws are in your state and what their position is on this.
• Can they walk you through a purchase agreement and explain how they will be paid?
• Can they walk you through the homebuying process from offer to close of sale?

Go with your gut

You must be able to trust your agent completely. Feeling comfortable and having chemistry with your agent is something that only you can determine.

Just as important as an agent’s knowledge and experience is their ability to guide you smoothly through a transaction. You can expect bumps in the road throughout your homebuying process, especially in a highly competitive market. You’ll want to work with an agent who is resilient with these setbacks and equally encouraging to get back on it until you close on a home.

Don’t forget: when you pick an agent, you are choosing who will be your primary advocate to the seller and your homebuying dream team. If you work with a good one, your chances of securing your dream home will be much higher!