Of all the decisions home buyers and home sellers need to make, choosing a realtor is by far the most important. Hiring the wrong person can make an already stressful experience even worse. Hiring the right person can make your transaction smooth and problem-free. Given the importance of selecting the right realtor, why do some consumers make a poor choice? Generally, they interview too few candidates, ask too few questions or allow their emotions to interfere with rational decision-making. But more to the point, most people just don’t know how to hire a realtor.
The biggest mistake buyers make is to start shopping for a home before they select a realtor. Rather than interviewing candidates and making an informed choice, they drive off with whoever happens to be holding an open house in their preferred neighbourhood. Or they pick a realtor whose name is on a for-sale sign or who answers the brokerage’s telephone when they call about a home advertised in the newspaper.
Top agents rarely hold open houses personally, nor do they sit around the office answering cold telephone calls. (This duty is known in the industry as “floor time” or “opportunity time.”) Productive agents are busy with repeat and referral business from former clients and personal marketing efforts.
There are exceptions, of course. Some solid agents enjoy holding open houses. And some enthusiastic new licensees use floor time to build a client base. It’s okay to hire a realtor who does these activities, but you shouldn’t hire someone based primarily on the chance encounter of one telephone call, one open house or one for-sale sign.
Sellers make similar mistakes. Some select a realtor because he or she sold a few other homes in the neighbourhood or sent out seed packages last spring. While these “neighbourhood names” may be worth considering, sales and seed packages shouldn’t be the sole factors in the decision.
Another common mistake among sellers is to hire a realtor because he or she states a high opinion of their home’s value. Some agents suggest an inflated price to flatter the seller and capture the listing, only to argue for a price reduction after a few weeks. Other agents suggest a low price so they can sell the home quickly or attract multiple offers. Rather than being a factor in selecting an agent, pricing decisions should be made in consultation with the agent, based on market trends, recent sales of comparable homes and how soon you want to move.
The right way to hire a realtor is to know your own needs and find someone who will meet those needs. Talk to several candidates and take notes. Start by getting some background information about the agent.
Ask: How long have you been in the real estate business? What special training or qualifications do you have? Do you have an assistant? What difficult situations have you faced in this market and how did you handle those situations? What are your strengthens in negotiating? How many buyers/sellers did you work within the last year? How many of those people bought/sold a home through you? What is your view of market conditions?
Then find out whether the agent is experienced with low-downpayment financing, condominium associations, lease-options, multiple offers, high-end homes, disclosure concerns or other special needs you may have. Finally, call the agent’s references and ask them whether they were pleased with the service they received.