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 real estate agent is easier that you think. Here are our tips for finding a good real estate agent to help your house hunting.
How to find a good buyers real estate agent (a.k.a. realtor)
Finding a real estate agent is your first BIG step towards buying your very first home. These tips will help and should include asking friends, local real estate agencies, google, and our favorite open houses.
Hiring a real estate agent 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 real estate agent can help you avoid.
Understanding the different types of real estate agents
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 real estate agent 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. They know the best months and the worst months to sell a house and are looking to make sure they get the most for their client.
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 real estate agent 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.
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How does my real estate agent get paid?
Most importantly you are paying your real estate agent, 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 real estate agents their commission from what they get from the sale.
Where to Look for a Good Real Estate Agent
Here are some easy ways to find real estate agents for your home buying team.
Bus benches in your sought after area
This one might sound like a cliché, but normally real estate agents 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 real estate agent. Use the experience of someone you know to find a reputable real estate agent 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 real estate agent, 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 real estate agent. 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 real estate agent. 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 real estate agents they recommend.
Yup, good old Google. The quickest way to find a real estate agent 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 real estate agent you plan to use. Search for things like: real estate agents’ name + complaints or real estate agents’ 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 real estate agents who work in the area, I could see which ones had complaints and which ones didn’t.
Steps For Choosing A Real Estate Agent
Come up with a list:
Once you have a shortlist of real estate agents 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.
What happens after you find a good real estate agent?
When you finally settle on a good real estate agent you will be asked to sign a contract with them. This will enable the real estate agent 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!
Next read: “10 Questions you should ask a realtor“