Look Beyond the Obvious!
There are currently over two million licensed real estate agents in the United States, with over 30,000 in Maryland alone! Consequently, choosing a Real Estate Agent can be a daunting task. Of course, there are obvious questions that need to be asked prior to hiring a real estate professional. How long have you been in the real estate business in this particular location? What is the dollar value of your career sales volume? Are your commissions negotiable? What guarantees do you offer? If I request, will you release me from your listing or buyer's broker agreement prior to its expiration? Needless to say, all of these things need to be taken into account at the outset.
However, once this line of questioning has been answered to your satisfaction, the interview process needs to advance to a more professional and specialized level. Regardless of whether you're a buyer or seller, it's crucial to recognize that the Real Estate industry has changed dramatically in recent years. Consequently, in order to ensure that you'll select the real estate agent who's most likely to meet or exceed your expectations, you'll need to take several less conspicuous but equally important questions into consideration.
1. How internet-savvy is this real estate agent?
Think about it: When was the last time you used a travel agent? Remember, less than two decades ago, that was a HUGE industry ... and then the internet came along, and most travel agencies vanished within a few years. People quickly discovered that everything a travel agent did for you, you could do online yourself more quickly and FAR MORE cheaply. Well guess what: the real estate industry is headed in the exact same direction. The comparison may not be totally analogous, but it is somewhat analogous. In other words, unlike travel agents, real estate agents will not likely be totally replaced by virtual counterparts any time within the foreseeable future. Because real estate sales and purchases are usually the largest and most significant financial transactions of a lifetime, there will always be a need for guidance from actual flesh-and-blood real estate professionals. What the internet has changed, though, is the PRIMARY means through which sale properties are marketed and researched by BOTH buyers and sellers. Newspapers, direct mail, conventional radio and TV broadcast, and even word-of-mouth advertising all still have their place within overall marketing strategies used to give sale properties maximize exposure. However, online resources now provide interested parties with unprecedented access to the most accurate, up-to-date, and relevant information about the property in question. Consequently, the public has quickly embraced the internet as the standard instrument through which potential real estate transactions are initiated. Regardless of whether you're a buyer or seller, if your real estate agent is averse to using e-mail, or has an amateurish and dysfunctional web site, chances are that you're not going to get a chance to consider all available offers and possibilities ... or conclude your experience with an expedient and satisfactory real estate deal.
2. How successful a negotiator is this real estate agent?
The final dollar figure of any real estate transaction ultimately depends upon how motivated both the buyer and seller are, which is of course not entirely within the control of their respective real estate agents. Nevertheless, buyers should NEVER pay the full list price. At the same time, sellers have the right to expect a final price that is reasonably close to the list price. The real estate agents on both sides of the table are understandably anxious to make sure that the deal ultimately happens. After all, a few thousand dollars one way or the other is not going to drastically effect their commissions. Nevertheless, they're responsible for representing your best interests, not their own. You therefore need to make sure that the agent's record represents a history of getting the best possible bargain for his or her clients. The agent's competency in this regard can be quantified through his or her list-price-to-sales-price-ratio. Listing agents are expected to successfully haggle for a final price that is as close as possible to the original asking price. Their ratios should therefore be closer to 100%. Conversely, a buyer's agent is depended upon to persuade the seller to accept a reasonable reduction from the original listing price. His or her ratio should thus fall below 99%. Every agent should know his or her list-price-to-sales-price-ratio, so don't hesitate to ask about it.
3. Does this agent work well and play well with others?
Real Estate is a VERY COMPETATIVE business. In order to close a deal (and be rewarded with the accompanying commission), a real estate agent must first attract listings and client buyers. These are prizes that local agents compete for directly with each other, so understandably, a certain degree of tension may arise from time to time between the contending professionals. Nevertheless, the relationship between local real estate agents is ultimately a symbiotic one. After all, at the end of the day, they're the ones who provide buyers and sellers to each other, and they all share the common desire to get to the closing table as smoothly and efficiently as possible. Perhaps more than any other, it's a profession that requires friendly cooperation with competitors on an ongoing basis
Choosing an agent that other agents prefer to avoid dealing with can cost you countless opportunities that you'll never even be aware of. Thus, it's critical to select an agent that enjoys an excellent professional reputation not only among his or her peers within the local real estate industry, but within the regional business community at large. Therefore, don't be afraid to ask for a few references. These should include former clients, as well as area business associates.
4. Are there any potential conflicts of interest?
You're money isn't greener than anyone else's. Nevertheless, you should insist on a reasonable degree of exclusivity with respect to the representation of your interest in a particular property. Be sure that the agent you select agrees to solely represent you and not other buyers who may express interest in the same inventory. Likewise, be aware that agents regularly refer business to mortgage lenders, title companies, attorneys, home inspectors, escrow officers, appraisers and other professionals. If you'll need your real estate agent to procure such related services on your behalf, be sure to ask whether or not the agent or his/her firm receives any sort of compensation for such referrals. If so, you may want to give your final selection of a real estate professional some further consideration.
You may also wish to review copies of the agent's standard legal forms prior to making any final decision. If you're a buyer, you may wish to see the buyer's broker agreement (to determine whether or not it's exclusive or non-exclusive), agency disclosure forms, the purchase agreement form, and any buyer disclosure forms. If you're a seller, you may wish to inspect agency disclosures, seller disclosures, and of course, the listing agreement.
5. And don't forget ...
If you're a buyer, it's good practice to loan shop BEFORE you home shop. That way you'll know in advance exactly how much you can afford, and will save time, effort and heartache by only seeking properties that you know to be within your financial reach. If you would like your real estate agent to assist you in procuring a loan, be sure to review the particulars of that task with the prospective agent prior to making any commitment to him or her.