How to Find the Right Real Estate Agent
Every year, a majority of real estate transactions completed in the U.S. are facilitated by agents or brokers. In fact, no more than 20 percent of all home sales are completed without representation, and this includes many "for sale by owner" deals in which a buyer's agent may still close the transaction.
If you're looking to buy a new home or sell your current one, you may have already begun the hunt for an agent. To find the best one for your needs, keep the following facts and tips in mind.
Real estate agents facilitate the search and negotiation process between buyers and sellers. These agents should be experienced and knowledgeable about the more technical details of the homebuying or selling process, including the financial and legal processes that the average homeowner is relatively unfamiliar with. Ideally, when both the buyer and the seller are represented by knowledgeable, experienced agents, they can arrive at a purchase deal that satisfies both parties equally, and come to that agreement much faster and easier than would otherwise be possible.
Real estate agents or brokers generally charge a fee for their services, often a commission that's a percentage of the final purchase price (between 3 and 5 percent is common). Fee structures and details like when that money must be paid may differ from agent to agent.
Commissions can represent a significant additional cost, which is a primary reason behind some people's decision to buy or list a home without representation. Most real estate experts, beyond agents and brokers themselves, consider this ill-advised for a few reasons:
- Buyers who aren't represented by an agent conduct negotiations themselves. That often pits them against experienced seller's agents who can easily outmaneuver them. Regardless, the risks involved in homebuying extend beyond the possibility of paying too much - a seemingly minor oversight could have lasting legal and financial implications.
- Buyers and sellers who choose to represent themselves could also miss out on the expertise of a local market specialist - something that describes every top-notch agent. Without in-depth knowledge of prices, sales trends and legal requirements in the area, unrepresented buyers and sellers might not know what they are getting themselves into.
- For those who are simultaneously selling their old home and looking to buy a new one, the amount of work required to facilitate both transactions can quickly overwhelm even the most capable homeowners. Just having another person to do the heavy lifting - from marketing your home for sale to collecting listings that meet your exact criteria - is worth a great deal.
Once you're ready to start seeking out agents, you can begin the process in much the same way you would any other important purchase: conduct thorough research and lean on recommendations from trusted friends or family.
The best real estate agents are those who work in the field full-time, with ample experience in the exact market you are searching within. A friend or family member with those credentials may be a good fit, but remember that home searching can be a stressful, emotional ordeal. No one needs their personal relationships to suffer because they chose a friend or family member to be their real estate agent.
Digging a little deeper in your search, look to hire an exclusive buyer's agent rather than the most convenient agent of any kind. The distinction may sound trivial, but unless they are an exclusive buyer's agent, real estate agents may actually be contracted to sell only certain listings. An exclusive buyer's agent, on the other hand, is under no obligation to show one home over another, and is more able to act in your best interests as a homebuyer above all else.
Even with this distinction, the specifics of the agent's relationship to you will be outlined in a contract. It's important to read and understand the terms of this contract, which may include some unfamiliar phrases or definitions. Be especially vigilant for contracts that include certain clauses like:
- Dual agency agreement: This clause means the agent can simultaneously represent both a buyer and a seller in a home purchase deal. This could invite conflicts of interest and is actually illegal in some states. Avoid this if you want to ensure the agent is an exclusive buyer's agent.
- Designated agency agreement: This clause may be included in contracts to allow for sales in which the buyer's and seller's agents each work for the same firm, although they are each contractually obligated to act in their client's best interests. This can be a complicated situation that some buyers may want to avoid.
- In any case, if you are seeking an exclusive buyer's agent who will act in your best interest, their obligation to do so should be explicitly outlined in the contract.
Once you have nailed down a few candidates who would make great agents, you can conduct brief interviews with each to finalize your decision. Take time to meet with them in person and ask for references, recent sales and how they go about their process. Don't be afraid to treat it similarly to a job interview, except you get to be on the other end of the table for a change.
With all this in mind, you should be in a perfect position to find a great real estate agent and soon, a perfect home. For more information about how to ace each step of the homebuying process, work closely with your mortgage lender at Trustmark.
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