The standard advice for finding a real estate agent to work with is to get a referral from a friend or family member. If a friend or family member *IS* a real estate agent, they’ll probably already have expressed to you that they expect you to work with them. This is fine for what it is but unfortunately, the referrals are usually based on relationships rather than the person doing a good job. Beyond this, an agent who is a good fit for one person, may or may not be a good fit for another.
Thinking About Who You Want To Work With
It isn’t always the case that the most experienced agent with the highest volume is the best person to work with. You may prefer to work with a particular gender or someone of a particular age. You’ll be spending a fair bit of time with the person and making big decisions with them, so this is fair. You’ll want someone with the right personality fit for you. This could be someone you’ll be joking with through the process. It could be someone who shares your taste and can be a sounding board about the right living space for you. It could be someone knowledgeable about property who can answer all your questions about the process.
I use an unusual technique for buying real estate, so for me finding an agent comfortable with following my process is more important than other considerations.
Understand How Agents Are Compensated
Real estate agents get paid a fraction of the sale price of the home (called the commission). The amount varies (it’s often around 5%) and the agent representing the seller and the agent representing the buyer will usually split this (2.5% to each). From this, agents usually need to pay out money to their brokerage, which will amount to roughly 1/2 of their share of the commission.
This money is paid out at closing and is taken out of the seller’s proceeds before the seller receives the money.
This means that agents are highly motivated for deals to go through. This is often, but not always, aligned with the interests of the buyer and seller.
Agents At Open Houses
Open houses are a misunderstood part of real estate. Sellers think open houses help them sell their property. It’s INCREDIBLY rare that an open house ever results in a sale. Instead, open houses are a way for agents to build their client base – to find new buyers.
If you’re looking for an agent, going to open houses is an excellent way to find agents trying to get more buyers.
My wife and I, for our last 2 properties, followed an approach we found to be quite effective. We short-listed all the agents we could find who seemed to have experience with the type of property we were interested in. We cut out the agents who didn’t have an e-mail address prominently featured. Many agents, especially older ones, like to do business by phone. We prefer doing as much as possible via e-mail.
We then set up meetings with each of these agents, about 20 minutes for each. We are quite clear with all of them that we’re interviewing many agents looking for the right fit for us. After we’ve met with a bunch of them, we go with the one we get the best feeling with.
If you google questions to ask your real estate agent, you’ll get tons of ideas about what to ask them at the interview. The questions I used when last time we were doing this are here.
Keep in mind it isn’t always just the answer you’re looking for when you ask agents these questions. HOW they answer them tells you quite a bit about them. I explain my unusual buying process to them. I’m not just looking for them to say “yes, I’m willing to do that”. I evaluate how reluctant or enthusiastic they seem. Similarly, I ask them a question about conflicts they have had with past clients. Every agent I’ve ever interviewed (probably getting into the dozens at this point), has avoided this question. If I had an agent give an honest answer to it, I’d probably hire them just because of that.
Be cautious about anything an agent wants you to sign. If you sign a “buyers representation agreement”, you’re committing to working exclusively with that agent. If someone plays it off that it’s a formality and wants you to just sign it without looking at or considering it carefully I would strongly recommend against working with that person.
If an agent wanted me to sign something at our first meeting (or before we first met!!!), that isn’t someone I would work with. I would probably say that I’ll get back to them after I’ve reviewed their document and that would be the end of that.
Check Them Out Online
Once you’ve found an agent, google their name and look at some of the reviews. Understand the nature of reviews – they’ll usually be people who are very happy or very unhappy. Put negative reviews in the context of the profile – if they have 187 good reviews and 7 bad reviews maybe that’s ok. If they have 7 good reviews and 7 bad reviews that probably tells you something.
Be cautious about “shills” – friends of the agent who give unconditionally good reviews. Some sites will remove all negative reviews and just be a puff piece for agents, be cautious about these too.
I released a book on Amazon about “Getting Started As A Small Scale Landlord”. It treats this as a part-time job you can give yourself, rather than a get-rich-quick scheme. If you enjoyed this post, I think you’d dig it.
How have you found real estate agents you’ve worked with? Were you happy with them? How would you find an agent in the future?