When it comes to time to find a good realtor, you have a lot of options of finding one. But like all professionals there are some good real estate agents and some that are less that stellar. While there are some pitfalls out there, finding a good realtor is easier that you think. Here are our tips for finding a good real estate agent.
How to find a good buyers realtor (a.k.a. real estate agent)
Finding a realtor is your first BIG step towards buying your very first home. Often, first time home buyers ask: “Do I need a realtor?”
In short: Yes.
Hiring a realtor ensures you have a professional in your corner guiding you through the maze of first-time home buying. You can attempt to do it on your own, but that often opens you up to many potential pitfalls that a realtor can help you avoid.
Understanding the different types of realtors
There are two types of real estate agents, the buyer’s agent, and the listing agent. This can also be the same person, but it’s in everyones best interest if they are separate people.
What is a buyer’s real estate agent?
A buyers agent is someone who helps a buyer (in the case of your first home, you) find the right house for them. They are generally paid a commission of the sales price of the home. While you pay for this in the total price of the house, it is the listing agent that collects it from the seller of the home.
The buyer’s realtor has a legal duty to represent you as the buyer in the best possible way. Their role is to help you find a house that you like (preferably love) and offer you advice and guidance through the whole home buying experience. This can include, finding the right home, negotiating the offer and its terms, helping you connect with other professionals such as a finding a mortgage broker, or finding a home inspector, or finding a real estate lawyer.
A good buyers agent is also there to offer emotional support. Buying your first home is a big deal and you want to know you have someone who’s got your back through all of this and isn’t just in it to get a quick commission.
What is a listing real estate agent?
A listing agent is someone who is listing the seller’s home on the market. They are the ones who represent the seller in all matters and communicate with your buyer’s agent. Their roll is to help sell the house of the seller at the best price and most favorable terms for the seller.
What is a dual real estate agent? Understanding dual agency
A dual agency is something that we believe is best to avoid. This is when the listing agent is also the buying agent. This means the realtor is working for both you and the seller. While many states permit this we strongly caution you in having the same agent represent both sides.
Because it’s hard to be impartial when you are getting paid thousands of dollars in a transaction. Think of it like this. You want to buy a house from me, and we have the same agent (i.e. dual agency). That means the more money you pay for the house, the more money I get, and because the real estate agent is acting for both of us, he also gets a higher commission. While there can be some benefits in dual agency, we prefer to avoid it whenever possible.
Already have a place? You’ll need the Essential House Hold Items Checklist (it’s free!)
How does my realtor get paid?
Most importantly you are paying your realtor, but it is an indirect way of paying. The listing agent of whichever home you buy will negotiate a commission with the seller. That commission will be split between both real estate agents at a prescribed rate. This will come out of the sellers pocket, but since you are the one buying the house, technically you are the one paying the commissions.
It may sound complex, but if you are buying a home for $100,000 and the commission is 5%, you are still only paying $100,000 for the house. The seller will take that $100,000 and pay both realtors their commission from what they get from the sale.
Where to Look for a Good Realtor
Here are some easy ways to find realtors for your home buying team.
Bus benches in your sought after area
This one might sound like a cliché, but normally realtors put bus benches in the areas they want to work in, not the areas they dislike. Take down some names while you check out the neighborhood(s) and visit their websites to see if it feels like a fit and what kinds of listings they have up.
Ask friends, co-workers and others in your network
This is usually the best reference for a realtor. Use the experience of someone you know to find a reputable realtor in the area you’re after.
Go to open houses in the neighborhood(s) where you’re searching
The best way to meet, and screen a realtor, is by visiting an open house they’re hosting. This way, you can see how they interact with you and the other potential buyers. It’s an easy and quick way to determine if this is the right person for your short list.
The bonus here, is that you can maintain a low profile, as they will likely assume you’re just there to look at the house and not scoping out a realtor. Keep in mind that at this point they are the listing agent and not a buyers agent.
Call the real estate body in your area
Many cities have real estate bodies you can call to ask for advice finding a realtor. Some states have legislation in place and others are self-regulated. It’s a good idea to contact them to see if there are any realtors they recommend.
Yup, good ol’Google. The quickest way to find a realtor is to do a search on Google and see who comes up.
Since we are talking about Google…
While we’re on the topic of Google – do some research on the realtor you plan to use. Search for things like: realtors’ name + complaints or realtors’ name + issues. Never accept a person onto your home buying team without doing some background research.
A site to check out is http://www.rate-my-agent.com/ using a couple of realtors who work in the area, I could see which ones had complaints and which ones didn’t.
Steps For Chosing A Realtor
Come up with a list:
Once you have a shortlist of realtors you may want to work with, send the potential candidates an email that addresses who you are and what you are looking for.
We have a whole email template in our first-time home buying guide,
Questions to Ask Your Potential Real Estate Agent:
These are the questions you will ask them in person (or on the phone) after you’ve sent the email pre-qualifying them as your realtor.
Which area(s) of the city are you most familiar with?
You want to make sure your realtor has experience in the neighborhood(s) where you want to buy a house. If they don’t work in the neighborhood(s) you’re looking in, you can ask them to refer you to a realtor who specializes in those areas. Many realtors will want to take you on as a new client, so make sure to screen them accordingly.
If they work in the area, ask them to provide some addresses you can drive by. This allows you to determine what kind of homes the realtor typically lists.
Do you often work with first time home buyers?
Not every realtor wants to work with first time home buyers. There is a certain stigma with first time home buyers and many feel there is a lot more hand holding. This is because it’s a new experience and it’s often filled with a fair amount of indecision and second guessing.
This is perfectly normal when purchasing your first home, but not every realtor wants to work with first time home buyers. It’s best to know up front what type of clients the realtor is used to working with.
Can you set up a search function that will automatically let me know when new properties come up that match my criteria?
This should be an easy thing for your realtor to do. It should be free of charge, however the realtor may want to have you under contract before performing this service.
Do you have a lawyer that you can recommend?
Working with a lawyer that was recommended by your realtor can often make the process smoother because the two have a working relationship. They will need to be in communication once a deal is reached (provided you feel comfortable with the recommendations offered).
You are of course, not obligated to use the lawyer that your realtor recommends, but it’s a nice place to start your search.
Do you have a mortgage broker you can recommend?
Like the lawyer recommendation, working with a mortgage broker that has been endorsed by your realtor can save you the headache of searching for one yourself. But the due diligence is still on you to make sure that it’s the right mortgage broker for you. Visit our section on hiring a mortgage broker for more on this.
Do you have any first time home buyer references?
Again, you want to emphasize that you’re a first time home buyer. Going through the process with someone who’s already bought and sold multiple houses is much easier for a realtor because the client already understands the process and knows more about what they want.
As a new home buyer your needs are different and you don’t want to pick a realtor who is impatient when showing you multiple houses and pressuring you to buy something you don’t want.
Are you a buying or a selling realtor?
Some realtors specialize in finding homes for others (buying realtor) and others can specialize in selling homes (selling realtor). There are also a good majority that do both. It’s good to know if you find your realtor is a ‘selling home realtor,’ as they may not be the best fit when looking to purchase your first home.
Are you a dual agent
Do you have any open houses coming up that I can visit?
As we discussed above, stopping by an open house that a realtor is hosting can provide you with a feel for how the realtor interacts with people and what kind of sales personality they have.
It’s also a good idea to stop by some other open houses in the area to meet some additional realtors. Again, this will provide an opportunity for a first impression, without them knowing you’re vetting them. (Fun Fact: this is how I met my realtor).
Do your clients sign a contract? And for how long?
This is fairly common, but you want to make sure you know what you’re getting into. If your realtor has you sign a 90 day contract and you find a house on your own, depending on your contract, you might still owe them a commission.
Ask them about the terms of the contract and what happens if you chose to terminate it.
Tip: We’ve heard horror stories of people signing contracts with realtors, resulting in the realtor doing nothing for them during the term of the contract. This can force people to go out looking on their own and when they find a place, the realtor still gets their commission because they’re under contract.
While these cases are generally a minority situation, we think its best that you know it does happen, so you’re aware and prepared, should this ever come up.
How much do you charge?
Since you’re buying a home, you shouldn’t be charged anything. Your realtor will get paid once you purchase a home and the amount they are paid will be deducted from the seller’s commission.
How do you get paid?
Realtors should only get paid once you purchase a house. Some realtors may want to charge you upfront for their services. If that’s the case, we recommend looking elsewhere for a new realtor.
What happens after you find a good realtor?
When you finally settle on a good realtor you will be asked to sign a contract with them. This will enable the realtor to act on your behalf. The contract is usually called an “exclusive buyer agency agreement” and it will outline the length of the contract. The terms of the contract and the services the real estate agent will provide. After that you are set to start looking around for your new home. Congrats!