With so much good information available online, do I really need to hire a Realtor to help me buy a home?
Legally no. But I would highly recommend working with an agent. The advantages to working with a good agent far outweigh any reason not to.
What do Realtors Bring to the Table?
Experience – Agents will add their education and experience in pricing, contract negotiation, and local market conditions to your buying efforts. If you are inexperienced in any of these areas, you won’t want to go it alone.
Buffers – Agents will be your go-between, and shield you from the sometimes contentious side of a real estate transaction. They will deal with the seller and the seller’s agent for you.
Paperwork – Your agent will help you navigate the mounds of legal paperwork that are required when purchasing a house. I’ve personally hired them for this reason alone.
Buyer’s Agents and Listing Agents
Listing agents represent the seller in a transaction. They are being paid by the seller, and are working for the seller.
The buyer’s agent represents only the buyer in a transaction. They have a fiduciary responsibility to the buyer, and work the buyer’s best interest in mind.
Although most agents can handle both sides of the transaction, most of the time they represent one party in the deal. When looking for an agent to represent you, look for someone who specializes in working with first time home buyers.
Interviewing an Agent
Smart buyers interview potential real estate agents before deciding on whom to hire. Just as you are sizing up the potential for a good fit, rest assured that the real estate agent will likely be interviewing you, too. Be wary of agents who don’t ask you questions and probe for your motivation. You wouldn’t work with just any agent off the street, and good agents are selective about their clients too.
Here are some important questions to ask when selecting your agent:
How long have you been in business?
Not every new agent is bad, and not every experienced agent is good. There are plenty of duds everywhere, regardless of their age or time in the business. But you want to make sure that your agent will have the knowledge (or access to) of the marketplace.
What is your average list-to-sales price ratio?
This will tell you a lot about your agent. A good buyer’s agent should be able to negotiate a sales price that is lower than list price for buyers. A competent listing agent should hold a track record for negotiating sales prices that are very close to list prices. Therefore, listing agents should have higher ratios closer to 100%. Buyer’s agent ratios should fall below 99%.
How well do you know the area/market I am interested in?
Real estate is a local business. There are nuances associated with different neighborhoods (HOA, local laws, market conditions, etc.) that only a local expert would know. Pick an agent who knows the area(s) you are considering.
What would be your purchase strategy for me?
How many homes will we need to view? How will you search for the homes to see? How will you handle multiple offers? These are just a few of the questions you’ll want to know the answers to when discussing a plan with a potential agent. Make sure the agent gives you solid answers that you feel comfortable with.
What will our Buyer/Broker arrangement be?
Buyer’s Agents will have you sign a Broker Agreement before representing you. The details of this agreement will spell who the agent works for, and how (and by whom) they will be paid.
Can you provide me with references?
All professionals should have references. Even a new agent can provide references from previous work. Think of yourself as an employer. You wouldn’t hire just anyone without checking them out first, right?
When should you stop interviewing agents? When you find the right one. Talk to several, until you feel comfortable. Make sure that you can work with this person – on a personal level- for the next several months, maybe longer!