It can be argued that everything in life is a negotiation: from little decisions like what the family watches on television on Thursday nights and what coffee creamer to buy at the store to the big, life-changing decisions, such as big purchases of cars and the buying and selling of a home.
Hiring the right real estate agent can be the difference between you finding the home of your dreams or selling your house at top market value. But how do you find the right real estate agent?
While some negotiations can be managed solely and with minimal research, others demand a little legwork. Research is key in finding your way to the keys to a new home, according to business consultant and owner of OptiSyn Consulting Fahim Moledina.
There are some decisions that demand the right allies, and real estate transactions are certainly in that category.
Fahim Moledina offers the following tips for finding the right real estate agent for you and your family:
Know exactly who you are hiring
Did you know there are distinct differences between a realtor, a real estate agent and a broker? Moledina iterates that it is vital that you know exactly what kind of professional you are hiring.
Real Estate Agents: Have passed an exam in order to be licensed in the areas where they work and abide by local and national laws.
Realtors: Are real estate agents who are also members of the National Association of Realtors® and therefore subscribe to the association’s code of ethics and standards, which go beyond what is required under the law.
Brokers: There are three different types of brokers: principal, managing and associate, which all have differing levels of responsibility. Still, all have earned additional credentials beyond what is required to be a realtor.
What to ask prospective agents
The first and most important question Moledina says you should ask an agent is whether he or she will represent your interests–and your interests only. It might seem obvious that the agent you hire will just represent you.
However, prospective homebuyers should have cautionary understanding that in some situations, a so-called “dual agent” can represent both the buyer and seller in the same deal. While that can work sometimes, it is better to have someone completely on your side, Moledina says. A “transactional agent” works with both the buyer and seller but has no fiduciary responsibility to either party. Whatever you do, get an agreement in writing that the agent will represent you, and you alone, in the transaction.
Next, you want to work with the person who is the most knowledgeable: this, he says, is key in all business transactions. It is important to ask whether your agent will be doing the bulk of the heavy lifting, or if they have an assistant who will be doing much of the work. While it is completely normal and acceptable for an agent to have an assistant, you do want to be certain that you’re going to have direct and easy access to the agent you hire.
Finally, you’ll also want to ask the agent what he or she will be paid. Typically, the seller in a real estate transaction pays the real estate commission. That commission is split with the buyer’s agent, with the typical real estate commission being 5 or 6 percent of the sales price. If you’re the seller, you might be able to negotiate a lower rate, especially if you have a high-price property, and as a buyer you can ask for a rebate of a portion of the buyer’s agent commission.
But be warned, Moledina advises: agents might not be willing to budge on commissions, whatever leverage you may have. It is the nature of business: be open to negotiating, but also be ready if it does not work.
Buyer versus seller concerns
It is best to understand how your agent should be helping you in different scenarios:
If you’re a buyer and hiring an agent, your agent should be able to explain to you the challenges you face in the current market and what he or she will do to help you find listed homes in your price range.
If you’re a seller and hiring an agent, your agent should be able to (a) show you comparable listings in your agent, (b) tell you what your home is worth and why and (c) what you should do to improve the value of your home.
Your best bet for finding an agent is going to be through referrals, from either friends, relatives or colleagues. Again, Fahim Moledina notes the parallels between regular business and real estate: Find people you trust and ask who they trust. You’ll also want to do your due diligence and review agents’ websites and online profiles, read about their specialties and check out their reviews. Then, narrow your list of potential candidates down to three or five and interview your finalists, in person if possible.
You may be interested in: How Much Is A Real Estate Agent’s Commission?
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