October 20th, 2014 8:26 AM by Jackie A. Graves, President
Realtor® (pronounced ré-al-tor) is a designation of those real estate agents
who, along with the companies they work for, are members of the National
Association of Realtors. Virtually all top agents are Realtors®; it is quite
common for the words Realtor® and real estate agent to be used interchangeably.
What is a top realtor?
Realtor® is one who puts your interests before his or her own, and has the
experience and know-how to get you the home that best suits your needs for the
best deal possible.
Why is choosing a
top realtor such an important part of the home buying process?
a home is a huge financial commitment, and the difference between various
choices can be significant. It doesn’t help that home buying is foreign
territory to most people, even if they have done it before. Practices,
procedures, and terminology are well-known to real estate professionals but
baffling to those outside of the industry. Following are some of the reasons
why using a good realtor is so important in the home buying process:
Realtors often know of properties that are
not advertised and that you would have no way of knowing about unless you knew
Realtors can be “the voice of reason” when
you are overcome by your emotions (which is easy to do when house-hunting). If
you fall in love with a property, a realtor can be there to help you recognize
the property’s flaws. Conversely, a realtor can help you to see the positive
side of a property with which you might not be immediately impressed. In
addition, realtors can provide information about the neighborhood, schools,
comparative sales in the area, and other important home-buying factors. This
objectivity and information is critical when you are making such a major decision.
Realtors are skilled, experienced
negotiators. When conducting a sale, there are many angles through which to
negotiate beyond the asking price, such as financing, condition of the house
when you move in or out, etc.
Realtors can help you navigate the home
buying process in general, making sure you are not rushed into making a
decision, that you have time for inspections and appraisal, etc.
remember – the above describes top realtors, not all real
estate agents. Read on to learn how to discern between less than ideal agents
and top realtors.
How can I determine if an agent is a top
Get referrals, and then check references.
is simply no substitute for getting referrals from friends. But once you’ve
gotten referrals, check references. Referrals can be flawed–a friend might
refer you to a family member, regardless of their experience; they may refer
you to someone who was great 15 years ago, but hasn’t had much experience
since; or to someone they’ve only heard is great, but whom they have no
personal experience with themselves. Bottom line: you are leaving a lot to
chance if you don’t check out the past behavior of real estate agents. You should
get references from an agent’s three most recent clients and call them to
verify that the agent is being truthful about his or her accomplishments.
Look for properties that you’re
interested in, and for agents who are selling the type of home you’re interested
should check the “For Sale” signs in the area that interests you. Typically,
you’ll find one or two agents who are doing more business than the others in a
certain neighborhood, who probably have significant experience and knowledge in
Beware of common traps.
seller’s agents; if you are buying a home, work with a buyer’s agent who is not
also representing the seller.
An agent working simultaneously for the buyer and the seller has the best
interests of both parties in mind, as opposed to an agent who is exclusively
working for the buyer and only has the buyer’s best interests in mind. If an
agent is representing both you and the seller, they will be trying to make
money for both you and the seller when it’s time to negotiate. Your goal is to
find someone who is in your corner exclusively.
say you tell the person you think to be your agent, “Let’s offer $250,000 but
I’m willing to go as high as $265,000.” If the agent were acting as sub-agent
of the seller, s/he would be obligated to present the offer like this: “Their
offer is $250,000 but they are willing to go as high as $265,000.” That pretty
well destroys your negotiating power.
careful at “Open Houses.” Oftentimes, the agent working for the seller will try
to pick up home buyers at these events, so that they can represent both the
buyer and the seller for that house (and thereby make a 6% commission).
have the right to be represented by someone who will be your agent without
giving you cause to worry about it. There are companies that work only with
buyers. If you can’t seem to find one locally, go to the webpage of the National Association of Exclusive Buyer Agents. You can also
check with your local real estate companies for agents who work only with
buyers. In many states the real estate industry has created a Buyer’s Broker
Representation Agreement that you can use with an agent.
you should understand that you ought to have someone in your corner, someone
who will help you understand the process, help you understand values, help you
develop a negotiating strategy, and help you execute it just as if s/he were
dealing with a member of the family. That person is out there and it is really
important that you make an effort to find him/her.
the agent who works only for him or herself.
We just explained why it is important to work with a Buyer’s Agent who
represents your interests exclusively. But there is another common kind of
agent: one who works primarily for him or herself. There are many ethical real
estate agents, but there are also agents who look out only for their best
interests. Their primary concern is how much money they can make on the
transaction and how hard they have to work to earn it. Getting referrals and
references, and conducting interviews is the best way to avoid these agents.
sure your agent will show you ALL properties you might be interested in (not
just the ones they’ll make the most money from).
Real estate agents get paid a commission, but it is almost invariably a portion
(usually half) of the traditional 6% commission that is paid by the sellers.
While a recent survey indicates that the average commission paid by sellers has
actually dropped to little more than 5%, the buyer’s agents still retain the 3%
they always have, with the rest going to the listing agent.
agents will often ignore listings that would provide them with a reduced
commission. They think they deserve 3%, and won’t show you a home on which they
would earn 2.5%. You need to let your agent know that you will be shown ALL the
properties you might be interested in, regardless of the commission structure.
Experience counts in the real estate field – ideally, you want to use an agent
with at least five years of experience. A word of warning: the newest agents
are likely to be the ones who take the “Up Desk,” meaning they’re the ones who
answer the phone when you call a particular real estate office. They do it
because they are trying to convert phone-in callers into clients. Frankly, you
may not do as well being represented by one of these people. How are they going
to get ahead? That’s their problem, not yours.
Interview potential agents.
want to ask potential agents questions about how long they’ve been in the
business, how many deals they are currently processing, and other questions
designed to tell you their level of competence. There are five basic questions
you should ask a prospective real estate agent before you start to shop for a
home. When interviewing potential agents, remember that it’s important not only
that you know what questions to ask, but also what answers to expect. Here are
some questions to ask:
long have you been licensed as an agent?
Check that the real estate agent currently has a license in good standing and
ask him or her about their professional experience. Look for a real estate
agent who has been in the business for at least five years. Ask the agent about
his or her work schedule and how s/he wants to be contacted. Ideally, your
agent is a full-time realtor who is easily accessible by email, cell phone, and
many homes did you sell last year and for what average price?
Ask your agent about his or her recent experience helping people in your area
buy and sell homes. See if s/he will provide you with the contact information
of former customers as references.
many clients are you currently working with?
Look for an agent that works with a few clients at a time, but not so many that
s/he won’t have enough time for you. Ask if the realtor will be acting as a
“dual agent”, i.e., representing both the borrower and the seller. (As mentioned
above, this is not ideal). If the agent will be representing you exclusively,
ask whether s/he expects you to pay the commission instead of the seller.
What are your fee and commission structures? Will you be willing to show me ALL
properties I might be interested in, despite your commission structure?
Most real estate agents work purely on commissions from the sale. When a
homeowner sells a home, they pay a real estate agent a commission and closing
fee. This listing agent’s commission is usually about 6% of the sale price. The
listing agent then shares his or her commission with the buyer’s agent. For
helping you buy a home, your agent will receive about 3-4% of the sale price.
Some agents offer discounted commissions, rebates, or flat-fees for their
services. Cheaper may not be better: a discounted real estate agent may not
work as hard to help you find the best home.
can you help me afford the home I want?
Your agent should be knowledgeable about the financing process and mortgage
loan options available to you. You should ask him or her about tax and
insurance policies that may impact your purchase. Also ask about the agent’s
experience in making tough negotiations. Is your agent going to work hard to
get you the best price on a home?
the interviews it is important to use all of your senses. Don’t just listen to
what an agent says because some agents use a highly developed sales
presentation. What you want to identify are more subtle factors, using skills
you have been using all of your life in evaluating people. Remember that your
goal is to find someone trustworthy and with whom you communicate effectively,
and these qualities have nothing to do with a canned sales presentation.
Use your common sense and be a skeptic.
of warning: there are many salespeople who are not nice people, but have been
through what I like to call Charm School. They can do a good job of
appearing to be nice when, in fact, all they are thinking about is how much
money they can make off of you.
another sad-but-true aspect of the home-buying situation: Although great
numbers of real estate agents are honest, hard-working people with whom you can
place your trust, there are also great numbers who are unethical and will try
to manipulate you into doing something that makes them a big commission but
puts you into a situation which can be damaging.
families are facing foreclosure now and in the near future. And many got into
this situation because they let some smooth-talking real estate agent tell them
juicy tales about how much money they were going to make. They let some
smooth-talking mortgage lender stuff them into a toxic sub-prime loan that they
said they could refinance out of.
are some real estate people who seem to be unable to talk with a client without
launching into a sales presentation. They get so used to using superlatives
that they can’t have a simple give-and-take conversation about the facts of a
particular neighborhood or home. Every house isn’t the cutest one in town, and
not every house is a terrific buy. Indeed, half are cuter than average and half
of them are better buys than the other half. But you wouldn’t know that from
talking to some agents. These people are so intent on making a sale that they
overlook their primary mission: listening to what the client wants and helping
him or her get it.
when selecting a real estate agent, you want to avoid this type of person if
you ever want to get a straight answer. But even if you think that you’re
working with a person you think is right for you, it is important to review and
summarize what has happened and been said after a day of looking at homes with
an agent. Once you’ve done that, ask yourself this simple question about each
point, “Does that make sense?”
Don’t be totally forthcoming (even if you trust your agent).
even though you have chosen an agent you hope you can trust, you may not want
to be totally forthcoming with him or her. You should be honest, but you don’t
have to tell him or her everything about your intentions.
example, when making an offer, you should go through a process to decide what a
property is worth, which is likely less than the listing price. So you and the
agent try to come up with an offering price. It would be quite natural to say,
“It’s listed for $250,000, probably worth about $240,000. Let’s offer $230,000,
but I’d be willing to pay $240,000 for it.” You may not want to do that.
about what is going on in the mind of your agent when s/he presents the offer.
If s/he knows you are willing to come up to $240,000 he will probably not be as
tough a negotiator as if he really believes that $230,000 is your BAFO, your
Best and Final Offer. He will work harder to close the deal at your offering
agent’s job is to communicate your intention and if she is portraying you as
having reached your limit–that there won’t be any counter-offers–you stand a
better chance of buying that home for $235,000 instead of $240,000.
can shop and compare REALTORS® in your area online with no obligation. Don’t be
afraid to ask an agent hard-hitting questions about her services. A good agent
will understand your concerns and will help you find the best deal. Good luck
and be careful out there!
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