Virginia Realtor Lon Crow has firm ideas on how homebuyers should choose a Realtor. And they don't involve calling the agent named at the bottom of a listing.
"You have to find someone who will act on your behalf. A listing agent's not going to do that. A listing agent is going to try to get the price that, in theory, they've helped the seller determine," Crow says.
Home sellers often go to great lengths to choose a Realtor to help in selling their homes; an effective Realtor can assist in determining an appropriate asking price, stage a house to sell and market the property.
But buyers, 90 percent of whom now use the Internet for their home search (according to the National Association of Realtors), often just pick up the phone and call the Realtor or agent who is selling the house.
It's an approach to choosing a Realtor that can cost the buyers, Crow says.
"In my area, I've looked at the stats," he says. "Buyers who use the listing agent for a home usually save about five percent off the asking price. But if they have a buyer's representative, it's closer to 10 to 15 percent, and sometimes as much as 20 percent off."
Realtors can facilitate a deal, when it comes to selling or buying a home. But to help with one of the largest transactions in their lives, both sellers and buyers should do their homework before engaging in a business relationship with a realtor. The National Association of Realtors reports that 85 percent of home sellers retain an agent while 79 percent of buyers bought a home with assistance from one.
Should you decide you'd like the advice of one of these professionals, consider the following before you choose a Realtor:
Selling or buying?
Real estate transactions potentially needing a Realtor involve two sides – the seller and the buyer. Sellers hire listing agents to aid with the deal on their end. Buyers use a selling agent, sometimes called a buyer's agent, to locate homes and assist with the paperwork associated with the sale.
The selling side
It's recommended that sellers interested in enlisting the help of a agent or a Realtor (the proper name of an agent who is a member of the National Association of Realtors) should interview at least three agents before choosing one.
To find these potential Realtors, first ask neighbors for references, or attend open houses in your neighborhood. Strike up conversations with colleagues who have recently sold homes nearby. Once you have a list of Realtors, set up interviews with individual agents.
When interviewing a Realtor, ask a series of questions, including:
- How well do you know the neighborhood?
- What are your plans for marketing my house?
- How much do you think I should ask for this house and how do you justify that price? Can I see the data?
- Will you be going to the closing with me or will you send an associate?
- With whom will I communicate in the office? (Some busy agents often use assistants for the bulk of their communication with clients.)
- What have you sold lately? How much experience do you have? What percentage of sales have closed? What is the average time the homes were on the market? How close to the asking price was the final sales price?
- How do you plan to market this house among your colleagues?
Once you, the seller, have determined who you'd like to hire, you must sign a listing contract with the Realtor or agent. Seriously consider asking for a maximum 90-day listing contract – that's enough time for a home to have showings if it is priced right, and it's short enough that if the seller is not happy with the agent's effort, he or she can move on.
While many Realtors will say they need a 180-day listing, especially in a slow market, a 90-day listing can always be extended by agreement by both parties.
The Buying Side
Buyers' agents help buyers find homes. Often, they first work with a buyer without any formal contract, but after looking at a number of houses, they'll likely ask buyers to sign a buyer-broker agreement, binding the buyer to them for all real estate transactions during a set time period.
But before buyers begin even looking at Internet listings, they should consider choosing a Realtor. All Realtors can show properties listed on the MLS or multiple listing service, but not all real estate agents are created equally. In the Realtor search, friends, colleagues, strangers and the Internet can help.
Start by asking for Realtor referrals from people who bought homes in the community you are interested in. Drive around the neighborhood and look for signs – see who is doing business in the community. You want an agent who knows the area in detail. Look online, usually in county real estate assessment records, for the names of people who have recently purchased homes in the neighborhood. Find out whether they'd recommend their Realtor.
Look at agents' websites and the Internet for reviews on specific agents. Lon Crow suggests looking for Realtors who not only give information about their listings but also provide information about their region -- both the good and the bad. "You really want an agent who knows the place," Crow says.
After looking on the Web, call Realtors who seem like a good fit. Evaluate the conversation. Do you hit it off? Do you feel like they're trustworthy? Can you communicate well? Remember, you might be spending long hours with this person. Having confidence in your agent, as well as feeling comfortable with him or her, can help you feel like you're getting your money's worth.
While the internet has helped both buyers and sellers become more market-savvy, a dependable real estate agent can be a timesaver. Crow says that he sees the future of the profession changing, largely in part to the availabliity of information on the Web, but for now, real estate agents still hold the keys to the lockboxes. So it pays to give careful consideration to choosing a Realtor.
"It helps to hire someone you trust," Crow says.
Want to learn more about home buying and home finance? If so, you won't want to miss
our online discussion with industry experts,
"What Works Now: Smart Moves When Buying a Home,"
created by AOL Real Estate in participation with Bank of America Home Loans.
Watch it now on AOL Real Estate.