Buying a Home: How to Find a Real Estate Agent
If you’re looking to a buy a home, odds are you’ll end up working with a real estate agent. Eighty-seven percent of buyers in 2018 worked with an agent, according to the National Association of Realtors. You may start your initial search online, but then enlist the services of a knowledgeable local agent. Here’s what you should know about the services real estate agents provide, and how to find one who is right for you.
Why is a real estate agent important?
A real estate agent is a professional who is licensed to work with people to buy or sell homes. Many real estate agents are also REALTORS®, which means they have joined the National Association of Realtors.
Joining this trade association involves agreeing to abide by its detailed code of ethics and standards of practice, which lay out how REALTORS® should treat clients and serve their interests. Real estate brokers are generally more senior real estate agents who have qualified for a broker’s license by meeting state requirements. For example, New York State sets experience and education standards for brokers, in addition to requiring that they pass a broker’s examination.
Real estate agents provide clients with a range of services throughout the homebuying process. Their primary responsibility is to help you find a home and negotiate the best price. During this process, they should be able to advise on current market conditions, how to make an initial offer and how to navigate the negotiations.
However, it doesn’t have to stop there. Agents continue to provide assistance during the closing process, including the inspection and loan application. Chairman of the San Antonio Board of REALTORS® Grant Lopez said clients should consider their agents their “local experts” with a wealth of neighborhood know-how, problem-solving experience and local vendor recommendations.
Real estate agents work on commission, a percentage of the home’s sale price that is usually paid by the seller and then split by the buying and selling agents. The size of the commission can vary by state, city or even individual brokerage, though the national average tends to be 5% to 6% of the sales price.
Lopez advised that there is no such thing as a standard commission. He recommends buyers work out in detail what they will pay and when as they are first agreeing to work with an agent.
Where to find a real estate agent
Referrals. Personal referrals are a great way to find good local agents. Forty-one percent of buyers use an agent recommended by a friend, neighbor or relative, according to a 2018 survey from the National Association of Realtors. Ask around to see if anyone you know has had positive experiences buying a home.
Local realtor association. Another option for finding an agent is to contact your local REALTORS® association, either online or by phone. They’ll have a list of REALTORS® who work in the area in which you are looking to buy. The National Association of Realtors also has this free online search tool.
Online listings. Online real estate listings can put you in contact with a range of agents. Seventeen percent of all buyers found an agent using a mobile device, according to the 2018 National Association of Realtors’ survey. If you find an agent you like through an online listing, it’s a good idea to ask them basic questions about how long they’ve been an agent, how many transactions they’ve done and how well they know your desired neighborhood. You can also always contact your local REALTOR® association or state real estate licensing entity to check their qualifications.
What to look for in a real estate agent
Local market expertise. A major part of the value provided by agents comes from understanding the area. They should have experience in the neighborhood you’re interested in, know the ins and outs of local school districts and understand what recent price trends are.
Personal chemistry. Buying a home is a stressful, expensive process. Take the time to find a real estate agent you feel comfortable with and whose style fits with yours. “Every client has a different personality and so does every REALTOR®,” Lopez said. Trust is an important part of the process. Meeting a few different candidates in person can help you make an informed decision.
Communication skills. It’s important to find an agent whose communication style works for you. Maybe you prefer an agent who texts to one who calls, or one who stays in touch every day rather than twice a week. Finding a good communicator — whatever your personal preferences are — can make the process easier.
Red flags to watch for
Complaints. To check the validity of a real estate agent’s license and/or find out what complaints have been filed against them, contact your state’s licensing board. This step can help you avoid scammers or people misrepresenting themselves as real estate agents.
Understand who the real estate agent is working for. When you meet a new agent, clarify if they are representing you or the seller or both parties. Some states allow “dual agency” with written consent, which means an agent or a brokerage can represent both buyer and seller. This could mean the agent has divided loyalties, or it may impact their ability to advocate for a buyer’s financial interest. Make sure to understand the situation fully and, if you prefer, get an agent who works solely for you.
Weird fees. You should not have to pay a fee or deposit to view a property. If someone is asking for money upfront, it’s probably a scam.
Steps to take when hiring an agent
Interview potential agents. Meet in person with potential agents so you can learn more about their previous experience in the local market and their communication style. Though many people interview only one agent, meeting and talking to a few different agents can be helpful in finding someone who is a good personal fit.
Ask for referrals. Request that a potential agent put you in touch with previous clients, and then ask these clients about their experience. Lopez said he regularly has new clients ask for one to three referrals from the past 18 months. Talking to previous customers will help you verify the agent’s claims and get the sense of whether they are the correct person to meet your needs.
Agree on the commission. As noted previously, there is no such thing as a standard commission. Before hiring an agent, you should discuss and negotiate how much the commission is and when in the process payment is due. Making an agreement upfront will only help prevent headaches later.
Set goals. Be clear and open with your agent about your goals. Do you need to find a home fast, or are you willing to wait for the perfect property? Is your budget strict or flexible? Are schools the most important thing for your family?
“That way they know how to go to work for you,” Lopez said.
Sign a buyer’s agreement. At some point in the process, an agent may ask you to sign a buyer’s agreement that lays out the services the real estate agent is required to provide and defines the agreed-upon commission. Some states require these by law. These documents spell out lots of specifics about the terms of the relationship. Agreements may deal with issues including whether the agent can represent both buyer and seller and what information must be kept confidential. A written agreement can be one way to guarantee an agent is working solely on your behalf and not representing anyone else in the transaction.
Sometimes written agreements are “exclusive,” which means the buyer agrees to be represented solely by the agent for a certain period of time. If the buyer finds a home without the agent during this time limit, they may still owe the agent money. A non-exclusive agreement details the obligations of both parties but does not include a commitment by the buyer to work with one particular agent.
The bottom line
A good real estate agent can be your ally throughout the homebuying process, from the initial search and negotiation through the inspection and loan application. Take your time and find one with local knowledge, whose personality meshes with yours and whom you trust. This can help make the homebuying process an easier one all around.