Choosing a real estate agent

2005-11-24

There are several things to consider when choosing a real estate agent and how you should select one can vary somewhat depending on if you wish to sell real estate or purchase real estate. It is important to remember that your real estate agent have personal motives for his or her actions, such as securing a large commission. You should therefore not uncritically believe in all the facts presented by a real estate agent. If you need an attorney it can be a good idea to find one on your own instead of letting your real estate agent select one for you, since an attorney brought in from outside will have no affiliations with the real estate agent.

Real estate agents are salespersons, but this does not mean that you should allow your real estate agent to become pushy or irritated if you don wish to buy the third house that he or she has showed you. A good real estate agent will understand how important this decision is and let you take your time without feeling stressed. It is not uncommon to visit at least 10 houses before choosing one. A good real estate agent will also accept your desired price range and not keep dragging you to see houses that are more expensive than the price range that you asked for. Providing your agent with a list of all the things that you look for in a house can make the process easier and faster. You can for instance make one list of things that your house must have, e.g. a large garden, and another list with things that you would like but that are not crucial, such as a guestroom.

If you are selling a house you will probably have friends in the area with prior experience from regional real estate agents. Asking friends, neighbors and acquaintances about their experience with real estate agents can be a rich source of information that you can never obtain by looking through the yellow pages and choosing the real estate agent with the pretties add. You might be surprised to find out how strong feelings and opinions people have about real estate agents that they have worked with earlier.

It is not uncommon for agents to work only part time, but this should be seen as a warning sign. If your agent works only half time, ask how prospecting buyer will be able to reach her when she is not working. Will interested buyers be able to reach her if they call between 9 a.m. and 5 p.m. or will they have to contact her during a very limited amount of hours, such as between 9 a.m. and 12 a.m. tree days a week? A part time agent can also have troubles keeping up with the latest changes on the real estate marked, legal changes, and business practices etcetera.

If you are looking for a real estate agent to sell your house it is important that you distinguish between Exclusive Right to Sell, Exclusive Agency listing and Open Listing. Exclusive Right to Sell is the most common form of contract between homeowners and real estate agents. This contract gives the real estate agent the exclusive right to sell your house and you will have to pay a commission even if you find the buyer your self. The benefit of this contract is that the real estate agent will invest more time, effort and money in selling your house if she knows that she will not be deceived by you and the buyer. Without the exclusive right to sell contract, it is rather easy for the seller and buyer to arrange the deal behind the back of the real estate agent and trick her out of her commission even if it was her marketing that brought seller and buyer together in the first place. It is common for real estate agents to refuse doing any business without an exclusive right to sell contract.

Before you sign an exclusive right to sell contract it is important that you check the time limit. It is not uncommon for real estate agents to use standard contracts that stipulate 6 months of exclusive right to sell before you can fire your real estate agent and hire a better one. Half a year is a long time, and if your house is located in a popular area and you are prepared to sell for a reasonable price that is in line with the market price for similar houses, a good real estate agent should be able to sell your house much faster. You should therefore not hesitate to negotiate this time limit and demand a shorter time limit before you sign anything. Being stuck with a bad real estate agent for 6 months will be horrible and can seriously harm your financial situation if you have already purchased a new home.

Exclusive Agency Listing is a more uncommon form of contract will give one real estate agent or agency the exclusive right to market your house. You will however not have to pay any commission if you find a buyer yourself and arrange the deal on your own. Since this is a more risky contract for the agency they will most likely invest less effort in trying to sell your house. With Exclusive Agency Listing you can usually not expect any expensive advertising or other forms of marketing. You will also usually have to arrange open houses etcetera on your own.

With an Open Listing, you can list your property with several agencies and none of them will have the exclusive right to sell. If they bring you a buyer, they will usually be entitled to a commission but this can vary between different types of agreements. In some cases, you will instead pay an initial fee before you are listed. With an Open Listing you can expect even less marketing than with an Exclusive Agency Listing, but you will on the other hand be permitted to do a lot of the marketing yourself by listing your house with several agencies. You can also use For Sell by Owner websites where potential buyers can contact you directly.

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