In last week’s post, I introduced the topic of finding and working with real estate agents when buying or selling a home.  We looked first at the question of whether or not you even need to hire a real estate agent.  We learned that the answer to that initial inquiry lies in understanding what real estate agents do, what makes an agent great and what kind of client you think you will be.  Now that we know what real estate agents do and what makes them great from last week’s post, it is time to delve into the most critical factor, you.

Your wants, your needs, your personality – those are what will tip the scales in favor of one great real estate agent or another.  Let’s dive in.

What kind of client are you? 

You would not walk into a Ford dealership looking for a Honda or vice versa.  Nor would you hire an engineer to do your taxes.  Same holds true with real estate agents.  Ultimately, the best real estate agent for you will be one that provides support where needed, direction where desired and resources where appropriate.  All of those things depend on you.

Are you technically savvy or do you still play Ultima on your Apple II E?  Do you need or want lots of handholding or are you more comfortable functioning independently?  Do you have a ton of time to devote to this process or are you under the gun (keep in mind – you should never be in too much of a hurry that you don’t see the forest for the trees)?  Do you have specific needs; what are they?  Are you relocating to a new area that you know nothing about?  Are you extremely picky and difficult to work with (you know who you are!) or are you more laid back in your approach?  Do you work better with men or women; people older than you or people younger than you?  All of these things matter in selecting the right real estate agent for you. 

In the current real estate environment, thanks to the internet and social media, buyers and sellers have access to more and more information everyday that was traditionally only available to real estate agents.  Whether you are surfing www.homesdatabase.com, www.redfin.com, www.zillow.com, or assessment databases run by most states and counties, there is an almost limitless amount of information available on homes for sale and property values. 

If you are technically savvy buyer with time to spare, you can probably find out as much about a property listing as a real estate agent can.  Sort of begs the question as to why buyers need agents – emphasis here on “sort of.”  If the process of buying a home was limited to just finding the property you want, then perhaps all of my agent friends would need to find other ways to earn a living.  That and it would not be much of a “process” either.   

Identifying the type of home you want to buy or even the actual home you want to buy is just the beginning of the process.  A good real agent can help you identify the type of home you are looking for if you are struggling with that.  A good real estate agent will ask you a ton of questions, many that could seem silly, too far into the future or financially irrelevant.  It is best to answer them all as openly and as honestly as possible.  They have done this before and can help you narrow down a sprawling universe of choices to something manageable based on you, your spouse, your family and a mix of your needs, wants and finances. 

Even if you know what you want, have done the research, have houses picked out to see, and are ready to go, there is still plenty of value a quality real estate agent can add.  First, no matter who you are, you should never go to see a property without having an objective third party with you.  You could bring a buddy or a family member or your Aunt Jenny who used to be an agent or whatever.  Better than nothing; but, bringing a licensed professional that has seen countless properties and knows what to look for, what to ask about, and, what to “read” from the experience is definitely the way to go.   

Most of us that put in some time and effort can come up with good questions, see many, if not most things and so on; but, only an experienced professional has been around the block and can fill in the gaps.  Remember, as is the case in many of life’s arenas, it is not what you know; it is what you don’t know that can hurt you.  Very, very true in this process.  A good real estate agent can bridge that gap for you; in fact, is their job and their fiduciary to do just that. 

For buyers, helping you to identify what you are looking for, helping you research and find appropriate properties to see and going to see them with you hopefully brings you to a point where you are ready to make an offer.  Again, this is not a time to be forging ahead full speed by yourself.  Getting the offer right, with the appropriate contingencies and addendums is crucial.  A poorly set table will lead to a tough meal.  Even if you “know what you are doing,” you are emotionally connected to the process and it will be close to impossible to remain objective.  Like they say in my world, an attorney who represents himself has a fool for a client. 

Beyond seeing the house with you, your outstanding buyer’s agent (called a selling agent for some reason that has eluded me for 10 plus years) will evaluate the Disclosures with you; will run and manage the home inspection process (a critical part of the process probably worth a separate post); will connect you to a reputable settlement company and/or lender, if you need it; will ensure that the final contract reflects your expressed intent; will manage the negotiation with the seller/seller’s agent (called the listing agent) and will continue to run and manage these ongoing, shifting and overlapping processes until the home is yours.  Definitely easier said than done considering the number of twists and turns this process can take; from the simplest to the most complicated transaction. 

Another function that a really good real estate agent must perform is to stay detached and be the reasonable, objective and grounded voice for you throughout the process.  Believe it or not, buyers and sellers can get so entrenched in the emotions that are necessarily interwoven on both sides of the deal that they lose sight of the end goal – for the seller to sell and the buyer to buy.  Transactions blow up for all kinds of non-economic reasons that should never lead to such a drastic result.  A good real estate agent can prevent that.  Conversely, they can also force it where it should happen.  You, the client, is far too deep in the proverbial water to get out when all signs say they should.  

There is one final benefit to working with a real estate agent on the buyer’s side that I want to mention.  Just like there are jobs that never make it to Monster, CareerBuilder or Craigslist; so too are there homes that never make it to the open market.  The best real estate agents, unlike members of the general public, are tied into the channels of the market and are really the ones that know when something is going to get listed.  They necessarily maintain relationships as part of their profession to gain an edge over the next guy.  Knowing about properties before they get listed can be extremely valuable; a deal maker or breaker. 

For sellers, while the same bottom line is true where you have to match up what you need and want with what an agent brings to the table, the decision whether or not to use a real estate agent is typically much easier.  For the overwhelming majority of people out there, having a listing agent is a must.  Listing agents are your conduit to the market.  They know how to prepare your home to be listed and seen by other agents and buyers; they know how to price it (critical); and they know the channels to exploit to get your home the traffic it needs to sell.  Unless you are a former agent or stayed at a Holiday Inn Express, chances are, you simply cannot perform these functions to the same level of competence as a good real estate agent (even a bad agent might have you on this one). 

Even in a crazy hot market, where homes are selling within hours of going on the market, a listing agent, like a buyer’s agent for someone that knows the exact home they want to purchase, can still add value to the process.  First of all, “going on the market” is typically the function of a listing agent.  They are the ones that actually do that.  Further, they can manage the complicated offer review and acceptance process; especially helpful in a hot market where multiple offers are coming in with conditions, escalation clauses and so on.  Moreover, listing agents also serve as the objective, detached voice for their seller clients who get too deep in the process to make good, balanced decisions.   

Remember, we are assuming your real estate agent is in the “good to great” agent category.  Listing agents below this threshold can fall victim to self interest and list a home with their best interests in mind (getting it sold and sold fast) instead of their client’s.  Same goes for the buyer’s agent.  They too can exert improper influence one way or another and put a buyer in a home they should not be in or at a price that they should not be paying, or both.  These scenarios are clearly bad for the clients and a clear violation of the agent’s fiduciary duty; but, you can bet the farm that it happens every day and probably more often than anyone will freely admit.   

How to go about finding a good real estate agent? 

Now that you know what a good real estate agent can do for you, what kind of client you think you are and have a sense of the kind of agent you need, you have to actually go out and hire one.  Considering the overall intensity of the decision, you want to try to get it right the first time.  You may have to work with several real estate agents until you get better at evaluating them; but, that is okay too.  While there are some sticky contractual obligations between agents and clients to be aware of, you can and, at times should, fire your agent.  But; first, how to find one.

For me, there is only one answer to this important question.  The best way to find a great real estate agent is by referral and through networking.  The last thing you want to be as a buyer or seller is an agent’s first client (or even first few clients).  Like most other professions, real estate agents learn their trade through training, experience and, most importantly, through making mistakes.  As such, experience is key.  That is not to say you should not work with a younger agent.  They may have parents in the business.  If they are good, they most certianly spent time working under a mentor.  Bottom line – one of your goals in finding and working with any real estate agent is to avoid being a learning experience for them.  I am not saying that there won’t be any learning done, experience gained, curve balls or thinking on their feet as part of the process; just that you don’t want to be a guinea pig to the extent you can avoid it.  [Think Seinfeld - do you want to be the guy getting operated on in the room where other doctors are watching and learning?  Hell no!]

You can avoid that, or at least do your best to, by talking to others about their real estate agents, what they liked, what their challenges were, how they would do it better next time, etc.  Don’t forget to find out what kinds of clients these people were before ending the inquiry.  Your best friend may have had the best real estate agent ever . . . for them.  That agent might be the wrong choice for you – and not because of them!  Then go and meet with the real estate agents that you think are the best matches based on your referral and networking research.  Ask good, direct, honest questions and make sure to do plenty of LISTENING.  Worthy real estate agents will tell you exactly why they are or are not a good fit for you.  They may even have a referral for you if they do not feel that they are the best choice for you. 

The bottom line here is that you may need to kiss a lot of frogs to find your prince or princess.  I urge you to put the time and effort in at the beginning of the process to make the best possible first choice you can make.  While it is not impossible for buyers and sellers to fire their real estate agent and get a new one, it sure is a whole lot easier to get it right up front.

Despite all good intentions and sufficient time spent researching, networking and interviewing agents, there are times when the wrong decision gets made by clients and by real estate agents.  Remember, they are choosing you as well.  When that happens, it is important to carefully evaluate the relationships before making a change.  There is plenty already invested making it worth consideration before making a change.  In my next post, we will examine when it is best to make a change and how to go about doing it.