How to Choose a Real Estate Agent

by on June 24, 2012Jason Van Steenwyk

Buying or selling a home or investment property may be the largest single transaction you ever make.  Surely such an important transaction – commonly worth hundreds of thousands of dollars – and occasionally millions of dollars, warrants a rational, deliberative process.

There are no hard-and-fast rules to selecting a real estate agent. Experience counts, yes. But sometimes you can be well-served by a young and hungry agent with a lot of energy as well. Here are some general guidelines about what to look for.

A License in Good Standing

The first criterion is to find a real estate agent who is duly licensed in your state. This is crucial, because real estate agents are held to a rigid professional standard of conduct. If agents are guilty of professional misconduct, they can have their real estate licenses suspended or revoked. Even if their actions don’t rise to anything worth killing a career over, state licensing boards do keep a record of disciplinary actions or complaints.

Even great agents occasionally get a client who just can’t be pleased. But if you see a pattern in the agent’s background of issues that come up over and over again, you may want to keep looking.

Another reason to look for a license is safety. Real estate agents carry a special kind of insurance called “errors and omissions” insurance, or “E & O.” Think of this as malpractice insurance for real estate agents and brokers. As hard as we all work, sometimes things go wrong with a transaction. If something does go haywire and you suffer economic damages, errors and omissions coverage helps ensure that the money is there to compensate you. Without it, even if you sue the agent, you may never be able to recover the damages. Use licensed real estate agents. By the way, in some states, a real estate agent whose license is in an inactive status is not required to carry E&O insurance, so check with your state’s licensing division to ensure the agent’s license is in an active status.

Investment Property Experience

People look at investment properties with different eyes than people who are looking at buying a home in which they plan to raise their families. For real estate investors, it’s important to consider non-emotional factors, such as expected cash flow, return on investment, and the costs of expected upgrades and repairs. Some agents have more experience working specifically with real estate investors than others. Just as importantly, some agents may have more contacts in the local real estate investment community than others. For those looking to sell quickly, and who are willing to discount their properties to attract investors, a strong Rolodex of qualified investors – who are both in the market to buy property and who can afford it or qualify to finance it – can be a crucial consideration.

One idea: Ask successful real estate investors in your community what agents they personally use. Sometimes, that investor may be willing to buy the property directly from you – saving you a hefty agent’s commission! More often, though, a good referral can save you weeks or months of waiting for your house to sell in a stagnant market, because your real estate agent just doesn’t have the natural market to place the home.

Match the Real Estate Agent to the Property

Ideally, your agent should routinely handle properties that sell in your price range. If you’re looking to sell a $95,000 condo, you don’t necessarily want the agent who sells a lot of $1 million dollar mansions. The agent should have a database of contacts and possible buyers who are interested in the specific property you are looking to sell.

A Real Estate Agent Who Listens

If you’re buying, look for agents who are sensitive to your concerns. The best agents will listen to your specific concerns – and then go the extra mile to find properties that are suitable for you.

Get an Agent With a Plan

If you’re selling, ask your prospective agent how she plans to market your property. If her whole marketing plan consists of putting your property up on the MLS and praying, look for someone else. The best agents are constantly networking and phoning their contacts, and they go to get-togethers with other real estate professionals in various disciplines looking to make contacts and execute transactions.

{ 8 comments… read them below or add one }

Mary-Lee Henson November 14, 2012 at 6:18 am

My newlywed husband and I were looking for a elegant, tropical home in the Ocean Reef Community, to start our new beginning. We looked everywhere but couldn’t find the perfect home for us. Then a colleague suggested Bob Ecuyer, we gave him a try, and he found us a breathtaking oceanfront home. Bob was so professional and knowledgeable of the community. You can call him at (305) 367-3600.

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Apartments In NY July 9, 2012 at 11:28 pm

Great advice!! I agree with all of the sentiments expressed in this blog, 100%, thanks for sharing.

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Property Investment Perth July 9, 2012 at 12:43 pm

The best rental agents know what are the best homes available for rent (because they make it their business to know that kind of information) and they do all of the legwork in terms of setting up appointments, chauffeuring you around to showings, getting a copy of the property rules and regulations, and helping you manage the process. Thanks.

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Capital Growth July 6, 2012 at 11:20 am

When selecting a real estate agent to sell your home, you should interview multiple agents to get an understanding of how they operate, how they intend on marketing your home, the strategy i.e. auction or private sale, and how much they charge for their service.

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Marianasliving June 28, 2012 at 9:58 am

One of the greatest fear for me, I think, is to give trust to real estate agent. But hopefully we could hire the best agent who could help us. Thanks for sharing your tips.

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Jason Van Steenwyk June 27, 2012 at 2:17 pm

Hello, and thanks for writing!

Most real estate agents specialize in a given niche or neighborhood, so that might help narrow your search. You might drive around your neighborhood and look at the signs to see who’s listing a lot of properties in your neighborhood. You can ask people about their experiences with agents. Look for one who really hustled for the last owner. Check with your state regulatory agency to make sure their license is in good order and there’s no lengthy history of disciplinary problems. And then go through the checklist above.

Thanks again for writing!

-Jason

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Teressa Storch June 26, 2012 at 3:03 pm

I am looking towards the future (next few years) of selling my home and relocating. I feel it is going to take awhile to get a buyer especially with the housing market and so I am going to put it up for sale now rather than wait till the last minute. This is my first time selling and my first home I have bought so I don’t now what to do to choose an agency to list my home for sale, I don’t know where to start.

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Gloria Matthews July 6, 2012 at 7:20 pm

Dont worry so much about the AGENCY. Most Agencies operate much the same, are all members of the MLS, and your listing will propagate across all agencies, who participate in the Multiple listing service. The difference in service, experience, and marketing lies with the INDIVIDUAL AGENT! Each agent is an independent contractor. How big or beautiful their offices are doesnt matter either. That only means more of the dollars are going into offices, and not into marketing.

The internet has changed a lot of things in our industry, and some of the most innovative and progressive agencies are now VIRTUAL agencies, capitalizing on the tools available, and perhaps not having “OFFICES” at all.

All realtors would need to see your home, and show your home, and that is where the business is really done!. Find an AGENT who goes the extra mile for you, in helping you meet YOUR GOALS.

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