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Having a successful real estate transaction with your Realtor® requires several parties to be able to work together. Unfortunately, Realtors® are often viewed with the same disdain as used car salesmen. But it doesn’t have to be this way. In this article, we look at how to make your relationship your Realtor® successful.
You might be surprised to hear someone who buys houses privately say, that you should normally sell through a Realtor®. But for most situations and homes, a good real estate agent can help you navigate the potential pitfalls of selling your home. There may be times when selling to an investor makes more sense. These might be selling a home needing lots of repairs, selling a home out of state or needing to sell as soon as possible. However these are the exception, rather than the norm.
Selection criteria for choosing the best Realtor®
It all starts with selecting the right agent for your situation. Everyone has a family member or knows someone who is or was an agent. I’ve lost count of the number of people I’ve met in my life who said they were or used to be an agent.
However, just because you know someone who’s an agent, doesn’t mean that they’re a good fit to represent you in a very expensive transaction like selling or buying a home. While this relationship comes with a certain level of trust built into it, it’s better to use more independent criteria, than just a personal relationship.
Choose an agent who is willing to tell you what you don’t want to hear
Sellers naturally look for agents who can get them the most money for their home. However, just because an agent says that they can get you the most money for your house, doesn’t mean they really can.
Here’s a little secret agents don’t want you to know.
Many of them tell you the price they think you want to hear, often overpricing the value of your home. Even if they know the price is not realistic, they tell you this in hopes of winning your business. Then when your home doesn’t sell they come back and say “maybe we should think about lowering the price”.
You need an agent who will tell you the truth about what your home is worth, even when you disagree. And then you need to be willing to accept their advice. If you’re not willing to accept their advice, then choose a different agent.
Choose an agent who is going to help you, protect yourself
If you have ever bought or sold a home through a real estate agent, you know there are lots of papers to sign. If you look closely, you’ll see that many of those forms protect the agent’s broker, more than they protect you. That’s fine, but you also want a Realtor® who’s going to make sure you’re protected, as well as they are.
This means they’re going to encourage you to disclose everything you know, when selling your home. If you’re buying a home, they’re going to encourage you to get home inspections done. They probably will not be able to help you interpret the results of the various home inspections. First, they are probably not qualified. Furthermore, most would violate their real estate license agreement if they provided any interpretation of the results. They will simply have a list of contacts for various types of inspectors – pest inspectors, soil engineers, home inspectors, contractors, etc.
Choose an agent with experience
Being an agent is hard and building a successful clientele takes years of hard work. In addition, most states require agents to take numerous classes and continuing education to maintain their license. If they’re a Realtor® they will have additional training required by the National Association of Realtors and California Association of Realtors helping them stay abreast of current changes in contracts and the law.
However, like any other profession, some things are only learned with experience. Real estate has many specialty sub topics and areas of expertise: short sales, foreclosures, commercial, agricultural just to name a few. You want to choose an agent who is experienced with dealing with the type of property you’re either selling or buying. You’ll need to ask some pretty specific questions to see what their experience level really is.
Choose an agent who is familiar with your neighborhood
Whether you’re buying or selling, having an agent who is familiar with the unique issues of a particular area of town can be a benefit. For example, if you’re buying a home in East Sacramento, just crossing a street can mean a difference of several thousand dollars for a similar house. These subtle differences might only be known by an agent who’s intimately familiar with the neighborhood. This is one of the pitfalls of relying only on online websites such as Zillow or Redfin where the algorithms used may not be neighborhood specific.
Interview multiple agents
Always interview multiple agents. You can start by looking at the agents who post signs in front of the homes they’re selling in your neighborhood. Identify and make a list of three or four agents who are actively selling in your community. Next, google the agent’s names, looking for reviews on Yelp and Google. Don’t just look for five stars. But also look for agents with 4 or 4.5 starts. These reviews will likely paint a more realistic picture of the quality of service you will receive. After all, even the best of agents, have had clients who weren’t happy when the process is done.
Next, schedule interviews with your list of agents. Have a list of questions you want to ask them. You’re conducting an interview for a very expensive transaction, so make sure you’re prepared.
Here are some suggested questions:
Ten questions to ask a prospective agent
- How many houses have you sold in this neighborhood?
- How recently have you sold a house in this neighborhood?
- What has been your biggest mistake as a Realtor® and what did you learn from it?
- Can you give me the names and numbers of your last three clients as referrals?
- If you have a short sale or similar situation, ask “How many short sales have you personally negotiated?”
- When considering a short sale or you need to stop a foreclosure, ask them if they “personally negotiate with the lender or if they hire someone else to do it?”
- Will they ever represent both the buy and sell side of the same transaction? This is important as it tells you in advance if an agent might be double ending the deal, representing both sides of the sale. Though not illegal, some agents prefer to avoid this possible conflict of interest.
- Do they do this full time, or do they have another job?
- What is your preferred means of communication, and how quickly should I expect a response back?
- What is the average difference between asking price and selling price of the homes you list?
You will be working with your agent a lot. Make sure you like their personality and will be comfortable working with them, even during stressful situations.
Remember, it’s a hiring interview. It’s doubtful that you will find someone who meets your criteria perfectly. You’re looking for the best candidate, not one that meets every criteria exactly. If you’re not comfortable with anyone, interview more agents until you find one you’re comfortable with.
Additional reading: Top 10 interview questions to ask a prospective agent.
Don’t look at the shiny presentation
Many agents will come with a shiny portfolio of transactions they have completed. It will include a Comparative Market Analysis (CMA) and possibly an Estimated Net Sheet showing you what you can expect to pay or receive for your home. Don’t let these shiny presentations fool you. Agents buy these presentation packages for a few hundred dollars and simply change a couple of pages for each house. You’re looking for the agent who will protect you and help you. Not the one who knows how to print paper on their computer.
Do’s and Don’ts for Clients
- Be decisive. Be ready and willing to make decisions when needed. If you have made a decision to buy a house, expect to have a little anxiety the next day. It’s normal. Don’t call your agent and say, “I want to cancel the contract” unless you discover something during your due diligence.
- Be available. When your agent sends you paperwork, be available to read and sign if necessary. Real estate transactions have several deadlines that need to be met in order to prevent contracts from being cancelled. Be available to read and sign paperwork to keep your transaction moving along.
- Don’t shop beyond your means. When looking to buy a house, you should already know what you can afford. Don’t waste your agent’s time by asking to look at houses you can’t afford.
- Don’t just sign the paperwork, read it. Be sure you understand what you’re signing. If you have questions, ask for clarification from your inspectors, lenders and Realtor®.
- Do have correct expectations. Remember that agents are in the business of facilitating real estate transactions. Their job is to make the process smoother, not make decisions for you. They’re not inspectors. They’re not engineers or contractors.
- Listen to your agent’s advice. Some agents are very tactful to the point of being easily ignored. Have you ever had a boss who made suggestions, but you knew it was more than a suggestion? If you’re unsure about a something your agent says, ask more questions. You don’t want to be blaming your agent later because you overlooked the importance of their suggestions.
A Word About Using Friends or Family who are Agents
I’m not a fan of choosing family members or friends to be an agent. There’s a lot of emotions that get triggered during the selling and buying process. There’s also an unnatural level of reliance upon friends to watch out for you, more than in a typical business relationship.
When things go bad with family and friends
So here’s the problem. If a real estate transaction goes bad, who are you going to blame? People tend to blame the Realtor® which may not be fair. I regularly hear stories of sellers and buyers, blaming their agent for some problem that was out of the agent’s control.
When problems like this arise, there’s conflict and often the friendships suffer. Ask yourself this question, “Is it worth risking your relationship?” Granted, you’ll probably offend the friend or family member just because you didn’t use them as an agent, but you can still save the relationship.
How to tell your friend or family member you’re using a different agent
So, how do you politely tell your family member you’re not going to use them to represent you? I would start on the positive note saying that you value their relationship too much to risk jeopardizing your friendship. Then, ask them for a referral to an agent that they can recommend.
They’ll probably be offended, but this approach does several things to appease the wound. First, you’re telling them that they’re important to you. But it also allows them to still make a little money from the transaction by the referral. When agents refer other agents, they receive a referral fee. It’s not going to be as much as the full commission, but it shows you value the effort they put in to help you.
How to know when it’s time to say goodbye to your Realtor®
A real estate agent’s job is difficult. They answer a constant barrage of questions, make lots of phone calls to inspectors and agents, and have constant meetings with clients. In the hours you don’t see them, they’re completing stacks of paperwork, fighting with software that never seems to work. Through all of this, most agents do a good job, but sometimes it’s not a great fit for both parties.
Your agent is unresponsive
In real estate, time is of the essence. You need an agent who returns messages in a timely manner. Remember, if they’re unresponsive with you, they will probably be unresponsive with other agents. If your agent doesn’t respond to emails or phone calls, you may have the wrong agent, or your relationship may have gone bad.
Your agent is unprofessional
Does your agent act unprofessional? Do they lose their cool or drop profanities every other sentence? Do they become defensive or change their tone when things start to go sideways? You may have the wrong agent representing you.
Your agent isn’t prepared
If your agent doesn’t show up prepared for the interview, this should be a warning sign. However, preparation also shows in how they arrive for every meeting after that. If shopping for homes, does your agent show up with detailed information about the neighborhood and the house? Has your agent already evaluated comparable houses in the neighborhood, maybe even driven by or gone in them? If your agent doesn’t appear prepared when they meet with you, how prepared will they be to represent you in negotiations where you’re not present?
How to gracefully say goodbye to your Realtor®
Say goodbye in writing
Realtor.com suggests that you always put your goodbye in writing. Remember, to stay professional and don’t get into accusations or lots of detail about why you’re cancelling the agreement. Acknowledge that they have probably spent a lot of time working for you and that you appreciate their time.
Get a release of contract signed with your former agent
Many experienced Realtors® have you sign an exclusive representation agreement before they will work with you. This saves them from providing lots of consulting time without being paid. If you have signed this type of agreement, you will need to get a signed cancellation of the agreement , preferably before selecting a new agent. If they will not sign the cancellation, speak to their broker to work out a solution.
Always let your new agent know they were referred by your previous agent
As mentioned above, ask for a referral to another agent when saying goodbye. Then, if you use the referred agent, be sure to let your new agent know they were referred. It’s common practice in the real estate industry for agents to pay referral fees to other agents. This token, normally around $500 is a kind way of letting your previous agent know you value their time, even if the relationship didn’t work out.
For more tips of how to break up with your Realtor®, be sure to read How to Break up With your Realtor® Gracefully.
When you may have to pay your former Realtor® anyway
Be aware that if your former agent introduced you to a home or a potential buyer that you ultimately buy or sell to, you may still owe your former agent. Attorneys call this “procuring cause”. Procuring cause is the “uninterrupted series of causal events that leads to a successful transaction”. This means if your transaction would not have occurred if your former agent didn’t introduce you, you will probably owe some kind of fees to your former agent. If this happens, contact the agents’ brokers and let the brokers work out how the commissions should be split.
Hopefully your transaction goes smoothly and without any glitches. Having a great real estate agent can make the process go smoothly and protect you from expensive legal issues or expensive repairs. But it’s not all up to your Realtor® to make things go well. Select your agent carefully and use the above Do’s and Don’ts to help your transaction be the best.