How to Select a Real Estate Agent
Monday, October 10, 2011
There are several things to look for when choosing a real estate agent to either buy or sell your home. Like other licensed professionals (such as doctors, financial planners, or lawyers) you are hiring an agent to help you through a technical transaction that requires a degree of specialized knowledge. Although it is possible to purchase a home without using an agent-just like it is possible to represent yourself in court or treat your own medical needs-most people choose to do so because of the value an agent provides.
After several years as a Boise real estate agent (and hundreds of real estate and property management transactions), I believe there are three key criteria to consider when selecting a real estate agent. I have written in more detail on this subject elsewhere, but for this article, here is a summary of the key issues to consider.
First, you need to choose a representative who is legally authorized and professionally competent. While there may be hundreds, or even thousands, of legally authorized agents in your community, not all of them are professionally competent. For example, according to Boise MLS records, there are about 2300 licensed real estate agents in Boise, Idaho. Surprisingly, nearly 900 agents (40%) did not represent a single seller last year in a completed transaction-and only 167 (7%) represented more than 10 sellers last year. Put another way, if you simply choose a real estate agent from the phone book as your listing agent, you have a 4 in 10 chance of selecting one that did not even sell a single home last year.
Find out about your potential agent's background and experience. Discover how many transactions she has completed within the past year and in her career. You may want to talk to three or four of his past sellers (and make sure they are not related to him). Many agents are selected only because they are a friend of a friend. Not surprisingly, those clients are often disappointed, but once an agent is selected, it can be awkward to de-select them .
Take some time to find out about your prospective agent's background and competency. Find out how many transactions he or she has completed in their career and within the past year. You may want to talk to two or three of their past clients (and make sure they are not related). The truth of the matter is that many agents are selected simply because the client knows them or is a friend of a friend. Not surprisingly, clients are often disappointed with the competency, knowledge, and experience of their agent.
Of course, many agents will pass these first two tests. Most realtors really are "people-oriented" and truly enjoy helping people. And, although you may be surprised at some realtor's lack of experience, there are certainly plenty out there who are technically competent enough to complete your transaction.
So what about the third criteria? Is your potential realtor someone who can help you strategize? For example, a good lawyer will have enough legal experience to keep you from doing something illegal or filling out paperwork improperly. However, a great lawyer will help you create a winning strategy-by accounting for countermoves by your opponent, appropriately interacting with the jury or judge, and foreseeing other issues that impact the outcome of your case. When buying a home, you probably want more than just an order-taker. You want a sales professional who can help you not only fill out the contract correctly, but also help you analyze research, interact with the seller's agent, negotiate strategically and ethically, help you qualify for the best loan, and most importantly guide you to your specific goal.
So how do you find a competent, strategic-thinking realtor you can be comfortable with? The first criteria is easy. Simply ask your agent how many closed transactions he/she has done in the past twelve months. Ask how they compare to yours. (Were they short sales, bank-owned purchases, acreage, etc.?) Let him explain his actual experiences-not just describe ideas and philosophies. Ask him/her for at least four testimonials from clients who closed deals within the past two months. Next, you can assess the second and third criteria (approachability and strategic thinking) with an easy test. Does he/she take the time to ask you questions? Does she ask you about your objectives, why you are selling or buying, how long you plan to retain the property, what kind of financial strategy you have, what your exit strategy is, etc. If he immediately lapses into his "sales pitch" he just failed both tests. It is impossible for him to give you strategic advice if he doesn't understand your situation. If he would rather talk than listen when he meets you for the first time, he will probably do the same when it comes time to discuss your offer.
After several years as a Boise real estate agent (and hundreds of real estate and property management transactions), I believe there are three key criteria to consider when selecting a real estate agent. I have written in more detail on this subject elsewhere, but for this article, here is a summary of the key issues to consider.
First, you need to choose a representative who is legally authorized and professionally competent. While there may be hundreds, or even thousands, of legally authorized agents in your community, not all of them are professionally competent. For example, according to Boise MLS records, there are about 2300 licensed real estate agents in Boise, Idaho. Surprisingly, nearly 900 agents (40%) did not represent a single seller last year in a completed transaction-and only 167 (7%) represented more than 10 sellers last year. Put another way, if you simply choose a real estate agent from the phone book as your listing agent, you have a 4 in 10 chance of selecting one that did not even sell a single home last year.
Find out about your potential agent's background and experience. Discover how many transactions she has completed within the past year and in her career. You may want to talk to three or four of his past sellers (and make sure they are not related to him). Many agents are selected only because they are a friend of a friend. Not surprisingly, those clients are often disappointed, but once an agent is selected, it can be awkward to de-select them .
Take some time to find out about your prospective agent's background and competency. Find out how many transactions he or she has completed in their career and within the past year. You may want to talk to two or three of their past clients (and make sure they are not related). The truth of the matter is that many agents are selected simply because the client knows them or is a friend of a friend. Not surprisingly, clients are often disappointed with the competency, knowledge, and experience of their agent.
Of course, many agents will pass these first two tests. Most realtors really are "people-oriented" and truly enjoy helping people. And, although you may be surprised at some realtor's lack of experience, there are certainly plenty out there who are technically competent enough to complete your transaction.
So what about the third criteria? Is your potential realtor someone who can help you strategize? For example, a good lawyer will have enough legal experience to keep you from doing something illegal or filling out paperwork improperly. However, a great lawyer will help you create a winning strategy-by accounting for countermoves by your opponent, appropriately interacting with the jury or judge, and foreseeing other issues that impact the outcome of your case. When buying a home, you probably want more than just an order-taker. You want a sales professional who can help you not only fill out the contract correctly, but also help you analyze research, interact with the seller's agent, negotiate strategically and ethically, help you qualify for the best loan, and most importantly guide you to your specific goal.
So how do you find a competent, strategic-thinking realtor you can be comfortable with? The first criteria is easy. Simply ask your agent how many closed transactions he/she has done in the past twelve months. Ask how they compare to yours. (Were they short sales, bank-owned purchases, acreage, etc.?) Let him explain his actual experiences-not just describe ideas and philosophies. Ask him/her for at least four testimonials from clients who closed deals within the past two months. Next, you can assess the second and third criteria (approachability and strategic thinking) with an easy test. Does he/she take the time to ask you questions? Does she ask you about your objectives, why you are selling or buying, how long you plan to retain the property, what kind of financial strategy you have, what your exit strategy is, etc. If he immediately lapses into his "sales pitch" he just failed both tests. It is impossible for him to give you strategic advice if he doesn't understand your situation. If he would rather talk than listen when he meets you for the first time, he will probably do the same when it comes time to discuss your offer.
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