How Do I Choose a Real Estate Agent? 

Key takeaways: 

• Whether you’re buying or selling, having the guidance of an experienced real estate agent can be essential. 
• One of the best ways to find an agent is by word of mouth, but we have some other suggestions if that’s not possible. 
• Given the current uncertainty about agent business models, it’s critical to communicate upfront about how your agent will be paid. 

If you’re considering buying or selling a home, you have a long to-do list ahead of you. But one of the very first things to do is to decide whether you’ll need professional help, and if you do, how to find the right professional. 

People have been doing “for sale by owner” for as long as there have been homes to sell, and online platforms make it a breeze for buyers to browse. Buying or selling a home on your own is possible for some homeowners. For sellers, it usually requires that you have a good background in marketing or sales, can devote time to the process, and are organized and detailed. If you are considering buying or selling on your own, it’s imperative to enlist the services of a real estate attorney in your state to handle contracts, title, survey and closing matters, and to protect your legal and financial interests. 

However, having a pro guide you through the process can prevent all kinds of headaches. An experienced real estate agent may also save you money, get you a better deal, help win concessions and more.  

It’s a bit daunting to know how to shop for someone to help you, and whom to trust. And it’s likely even more confusing right now, with the recent upheaval in the industry. We’ll cover all that and more in this post.  

Who’s who in real estate 

First, here are quick definitions of some key terms:  

• A Realtor is a real estate agent who belongs to the National Association of Realtors professional organization. The term “real estate agent” is broader. All Realtors are real estate agents, but not all agents are Realtors.  

A buyer’s agent is focused on helping people who want to buy real estate. They may identify homes for buyers to choose from, negotiate offers and guide the closing process.  

In contrast, a listing agent is hired to sell a property. Listing agents, sometimes called selling agents, help a homeowner decide when to sell, how much to ask, and how to market it. Once offers are in, they help the seller negotiate a deal.  

• A broker usually has more qualifications than the average agent, and the term is often used to refer to someone who owns their own company and has agents working for them.  

New changes in the way you buy or sell a home 

Both buyer’s and listing agents have a responsibility to act in the best interests of their clients. But that mandate has traditionally been a bit blurry. For many decades, the seller of a home was responsible for paying both the listing agent and the buyer’s agent, with standard commissions standing at 6%. 

But after several years of litigation against the national professional organization that represents Realtors, that arrangement looks set to change. The National Association of Realtors recently announced a settlement with groups of home sellers and agreed on a set of new rules for buying and selling real estate. Key among those are: 

• Agents’ compensation can not be included on any multiple listing service (MLS). 

• An end to requirements that brokers subscribe to multiple listing services, where homes are given a wide viewing in a local market.  

• Requirement for buyers’ brokers to enter into written agreements with their buyers. 

In general, the changes are very good news for consumers, as most analysts believe commissions will fall, perhaps significantly. It’s also likely to lead to more experimentation among real estate agents. Some might offer their services for a flat fee rather than a commission based on the sale price, for example.  

Some observers also believe that home prices may also soften a bit. That’s because in a commission-based system, agents for both buyers and sellers have an incentive to make prices as high as possible. It’s still early, though, and there’s a lot of uncertainty about what could happen in the short term as well as in the future.  

That means that no matter whether you’re buying or selling, even if you decide to hire an agent you’ve worked with before, you should be careful to understand exactly what kind of arrangement you’re entering into. Ask as many questions as you need to to understand the situation and get everything in writing. 

How to find a real estate agent 

There are several ways to find a real estate agent. 

• Relying on personal referrals is the single best approach to finding someone to represent you. Buying or selling a home is a big, stressful process, and if someone you know can vouch for an agent’s professional skills and personal manner, that’s the best recommendation you can get. 

• Online real estate marketplaces can be good sources for personal recommendations. Most have ratings for real estate agents. Be sure to read what the reviews say about the agent and don’t just decide based on the number of stars the agent received. Try to get a sense of what kinds of properties that person has bought or sold with clients to see if your goals are a good fit. It’s also ideal to ask the real estate agent to provide you with references. Reach out to those people and ask about their experiences.  

• If you’re already working with a lender, you might want to ask that person for a recommendation. You’ll get the advantage of a referral to someone who presumably works well with that mortgage professional, which can be helpful at closing time.  

Consider these qualities when interviewing the list of agents you’ve gathered: 

Experience: This doesn’t just mean experience in real estate or with selling homes, although that’s important, too. Ideally, you want to work with someone with at least five years in the real estate industry in your area. You want to work with someone who knows the streets and neighborhoods of where you’d like to buy. 

On top of that, they should have experience and knowledge with buyers like you, in your price range, looking at the kind of properties you’re interested in. They need to know what it’s like in your world, so they can lead you to the right homes at the right prices. 

Influence: Your agent isn’t the only professional you need to work with when you look for and buy a home. You may need access to mortgage brokers, lenders, insurance agents, home inspectors, contractors and more. A great real estate agent will have a good network and relationships with other individuals and businesses that can help their clients every step of the way. 

Personality: How well you click and get along with your agent can affect your entire experience in a major way. You’ll be communicating with this person a lot. They’ll represent you in negotiations when you put in offers and should be able to help guide you through some difficult decisions. 

In summary, taking some time to research a real estate agent who can represent you is critically important. Buying and selling property is a stressful process, with lots of money at stake. Before you start to work with anyone, make sure you have a clear understanding of how much he or she will be paid, when and by whom. Good luck!