How do you choose the right Realtor to use for buying your next home? Should I go with the first Realtor that contacts me? Should I use the Realtor I met at the Open House to write the contract? How do I find the best Realtor when going to a new area?
These are all questions I have gotten from people when they were trying to make the best financial decision with their home purchase. It is easy to get caught up with the personality or the dress of a Realtor but you need to make the decision based on asking the right questions and being an informed consumer. There is a difference between looking for a Listing Agent (Realtor representing you as a Seller) and a Buyers Agent (Realtor representing you as a Buyer). We have divided the list and questions up because each type of Agent requires a different skill set. For details on how to interview a Listing Agent go to Selecting the Best Listing Agent
The questions you should ask are not limited to the following but they are a great start. I have listed both the questions and the results you will want for selecting the best Buyer Agent in your area.
Selecting a Buyer Agent:
Question 1: How many years have you been in the business?
I have this question listed first as many Agents try and leverage time as the best asset. I would encourage you to keep in mind that someone in the business 3 years may not know as much as someone in for 30 years. However, I have seen many accomplished Agents that have only been in the business for 5 years and have done more transactions/home sales than those in for over 20 years. So don't rely on time in the business, instead look at transactions and productivity.
Question 2: How many homes do you sell each year?
This can be a combination of both the homes they list (represent the seller) and homes they sell (represent the buyer). According to NAR (National Association of Realtors) the average Agent sells less than 10 homes a year. It is important that you use an Agent that does Real Estate everyday. You should automatically rule out any part-time Agents. Real Estate and selling homes is a business and you as a Buyer deserve full-time service. In the Northern VA/DC marketplace an accomplished Agent will sell over 100 homes a year. If you are looking in small markets you may need to scale that down. At a minimum, your Agent should exceed the average number indicated by NAR.
Question 3: What systems/partners do you have to help with the process?
Real Estate is not only a full-time job but requires the work of more than one person. Even if you are moving or live in a small market the solo Agents will have partners and others that are part of their team. At The Nellis Group we have 4 full-time office staff just for our clients, a licensed Appraiser, Interior Designer, Lender Partners, Licensed Contractors and 7 licensed Agents all working to make it a smooth transaction for our buyers. There are many moving pieces so when reviewing an Agent ask them to show you their Home Purchasing System that will enable you to buy the best home.
For more insight on how a Buyer Agent and all the parts should work together for you as the Buyer go to our Premier Buyer Book: Nellis Group Purchasing System
Question 4: Who will be working with me throughout the process?
This is a great question when interviewing a larger Brokerage or Team. Many times the lead/head Agent will not be working with you because some of the best Agents have licensed Agents that work with them. You need to know:
1. Who will be your main contact point? (If it will not be the lead Agent you need to make sure the other person is the best fit with the right skill set)
2. Who will be showing you homes? (Some Agents will utilize showing specialists/other Agents to help you see the home. If this is used make sure the Top Agent reviews your best options prior to purchasing the home)
3. Who will negotiate any contract that is offered on a home? (This is a huge part of selecting the right Buyer Agent. Thousands of dollars are won/lost based on the negotiating skills of a Buyer Agent)
4. Who will answer their phone after hours/emergency contact? (There are not many emergencies in Real Estate but if there is one, whose cell phone number are you given to reach after hours)
Question 5: How do you determine value/pricing for the home?
This is very important and will help you decide if this Realtor knows the market and how to assess homes. Here are the stages that I see in everyday Real Estate.
1. Most purchasers will review a national real estate website to get an estimate of value- that is normally derived based on tax assessments. This is not the best indicator of market value.
2. A Realtor will do a CMA (Comparative Market Analysis) this will provide needed insight.
3. On more accomplished Teams/Agents they will have a licensed Appraiser. This is not a full blown appraisal but it is the most detailed insight you can get as a consumer prior to purchasing a home.
If you find that there is not access to an Appraiser, compare the market knowledge of the area between the different Agents you interview.
Question 6: How does absorption rate affect the sale of the home?
Aborption Rate is used by accomplished Agents to help the consumer understand where the local market is right now. Is the market going up in price, down or is it stable? Absorption Rate is defined as the number of weeks it will take to sell the current inventory at the current rate of sales. Ask the Agents you are interviewing what the current absorption rate is where you want to buy your next home.
Question 7: Commission. How do you get paid on different types of transactions?
TRADITIONAL SALE: There is no standard but the seller typically pays the commission for the Buyer Agent. At the time of listing a new property the Listing Agent will set the terms and commission to be paid by the Seller. For instance if the Listing Agent collects 6% from the Seller, the Buyer Agent will normally receive 3% at the time of closing (settlement- when you get your keys).
FSBO: (For Sale By Owner) If it is being sold by the Seller without a Listing Agent then the commission and terms are subject to negotiation. We have found traditionally that a FSBO is 6-8% overpriced when selling their home. Most Sellers believe their home is worth more than the current market. It is very important to have a Buyer Agent that knows the market or a team that has an Appraiser to make sure you do not overpay for the home.
NEW HOME: The Site Agent that you meet when you walk into the model home does not represent you, they represent the Builder. The Site Agent's job is to sell the model and the community. The Builder will pay the commission for the Buyer Agent you select and you will want a professional to negotiate on your behalf with price, terms, upgrades and lot selection. Make sure when you walk in the first time you register your Buyer Agent so that they can negotiate for you.
Question 8: How do you leverage technology and the web to find the best home?
NAR (National Association of Realtors) states that over 87% of buyers begin their search for the right home online. There are 5 pillars to the home purchasing process that you must understand and utilize in searching for your home: Location, Community, School District, Convenience & Crime Reports.
For details on how to leverage the 5 pillars with technology using your smart phone and computer go to: Searching for the Best Home
Question 9: What are 3 things that distinguish you from other Realtors in the local market?
Have you heard the saying: "There is a Realtor on every block" - well there is and when you include the part-timers you can find an Agent just about anywhere. I remember when I took a trip to North Carolina I met 2 Agents before I even unpacked: the cab driver & hotel attendant both had their licenses. So what makes one Agent different from the others?
Many Agents will hang their hat on Experience (time on the job) as we discussed in question 1 that is not always a good indicator of true real estate experience. Another one is service. Service is important but many times this term can be lip service. What makes their service different? Ask them for examples if they use this as a point of distinction.
Negotiation is very important anytime you are purchasing a home. Make sure that you feel the Agent you will choose is a good negotiator. If you can not tell- ask them for examples of when they have negotiated for their other buyers.
Question 10: What else should I ask you about prior to selecting the Agent we will choose?
This gives them the opportunity to add anything that may help in your decision or highlight their team or company.
We hope these questions will assist you in selecting the BEST Realtor for your next Real Estate transaction. We at The Nellis Group actively screen Realtors throughout the country for our clients. If you are moving/relocating and want to make sure you get the BEST Realtor contact The Nellis Group. We will interview the local Realtors for you and get you the right one for your next transaction.