How to Select the Right Realtor for You
Start this year by conducting a “selection process” for your new realtor. Do not wait to choose a realtor when you are desperate and need them the most. Many people find themselves in a relationship with a realtor because that realtor has the sign on the home they drive by and want to view. Alternatively, many times they are referred to a realtor by a friend or relative. These selections can work very well for some people, but as we embark into the New Year and some unprecedented territory, it might be an opportune time for you to re-evaluate the manner in which you select your trusted “advisors” to represent your interests.
Never has it been more important for you to select someone who not only knows this new market, but who also knows what it is like to be in your shoes. Someone who has experienced many of your same concerns, can empathize with your situation, and has experienced some of the same frustrations. More importantly, someone who can discuss the options that are available for your particular situation, and can help you implement solutions that will become the cornerstone for your financial future.
Home ownership has long been touted as the American dream and one of the key components of long-term financial planning and success. In the last few years however, many Americans have seen this “dream” evaporate and the “investment” in their financial future dwindle into the sunset. It seems like the people we were relying on, and who were responsible for structuring our purchases and loans, were also the same people capitalizing on the upside market and leaving us vulnerable on the downside. While it may not have been possible to completely predict the extent of the market‘s rapid decline or the extent of the devastation that it caused, it certainly was possible to predict that there would be a market downturn. Remember all of the talk we heard about “the bubble” that was getting ready to burst?
Somehow, they neglected to tell us that we were also tied, for better or worse, to that same market that would eventually crash and send our “investment” into a tumultuous spin from which we may need to recover. Is your realtor helping you now? Are they giving you advice on how you can position yourself for the future? Are they helping you with issues that have arisen since your purchase or sale?
Let us discuss how together we can find someone who can assist you now. Let us outline how we can select a realtor that will become our “trusted advisor” for now, and in the future. Let us discuss a few things for you to consider when you select your new realtor.
A friend (or family member) sells real estate.
Friendship is not enough to establish a professional’s credentials. A true friend will understand this concept, appreciate that you are making a business decision and will offer you their qualifications, and compete for your listing. Consider if you do encounter a problem, or a challenge develops while buying or selling your home, do you really want to feel uncomfortable dealing with a friend and possibly risk damaging that friendship or a family relationship? Business really should be just business.
A realtor that agrees with my selling price.
This technique is known in the real estate business as “buying a listing.” You should be aware of realtors who are more interested in being agreeable to you, then they are in offering you their unbiased professional opinion. However good it works as a short-term “sales tactic” in getting your listing, this is very bad strategy in selling your home at the highest possible price.
A house available for sale gets the most attention from other agents when it is a “new” listing. When it is priced properly, many agents will market it to their buyers. If it is priced it too high, very few agents will show the house and it will remain available for sale on the market for an extended period. When you finally drop your price to reflect its real value, your house is now “old news” and buyers may think you are growing desperate.
This tactic will almost ensure that the prices you are offered will come in lower and lower , and you may find yourself accepting a price that is below what you could have received had the house been properly priced at the outset. In addition, pricing your home too high will only make similar houses that are for sale look that much better.
A thorough market analysis conducted by a realtor who is informed of the market and aware of your particular circumstances, can best assist you in establishing the proper sales or purchase price of your home.
Do I really need to check references?
The best way for you to determine if a realtor is competent and they are truly customer service oriented is to check their references. Ask how an agent’s customers feel about their experience.
How long an individual has been in real estate is not necessarily all that you should consider. Many “experienced” agents become lackluster and complacent while newer agents may make up with enthusiasm and effort what they lack in experience. Someone who is very well respected in their profession, especially “among their peers,” is also a good sign that they may be well suited as a realtor for you.
Check their license status with the Department of Real Estate. Unfortunately, the last few years has spawned many unscrupulous con artists that violate many of the rules and regulations designed to protect members of the public. They prey on uninformed and unsuspecting clients that are generally quite diligent in their other family transactions. Beware of unlicensed agents and brokers, illegal advance fees for mortgage modifications, and lease option makers who are unlicensed and have no formal training.
List with the agent who has the lowest commission.
You get what you pay for. Anyone can place a sign in the front yard and enter your information in the Multiple Listing Service (MLS), but you deserve so much more effort from your agent.
Realtors initially invest their own funds up front, to market and advertise your home. The initial marketing and advertising costs money and this most often means the lower the commission, the less incentive a realtor has to invest their own money to market your home.
Incentive plays a very important role in sales. A “full service” agent earning a full commission will often “drop everything” to handle any challenges that come along; an agent earning a small commission does not have that same incentive. Remember, the ability of your realtor as a negotiator is a very important skill for any realtor. Are you willing to put your faith in a realtor to negotiate your best interest that cannot even negotiate the value of his or her own commission?
My realtor will hold as many open houses as it takes to sell my home.
Did you know that less than 2% of all homes are sold during an open house? Although open houses can and do sell homes, they usually not sell your home. It is an excellent opportunity for all of all of your neighbors to preview your home and compare its features, décor, and price to theirs.
Open houses create an event for realtors to “prospect” for potential clients. They often develop a rapport with the visitors to your open house, and take the opportunity to find out about their housing needs, and sell them a home that most closely matches their needs. In the meanwhile, the person who eventually does purchase your home is most likely visiting someone else’s open house.
Seasoned realtors know better than to attach all their efforts on an open house. They use their time in other more effective marketing methods. The most effective marketing is not accomplished directly to the public, but to other agents. By getting other agents interested in your home, your listing agent multiplies your sales force beyond just one individual. The weekly “homes tour” invitation by your realtor to all of the other realtors is actually one of the most effective uses of the “open house” concept.
Should I use a realtor who lives in my neighborhood?
Living in the neighborhood is not the only effective method to acquire local market knowledge. Although you should expect that your realtor would have an intimate knowledge of any recent sales, models, schools, businesses, etc., anyone can obtain this information with some basic internet research skills.
It is nice to have a “fresh set of eyes” look at your neighborhood and the people that live there. Neighbors tend to overlook issues that have become the norm for their neighborhood. A new prospective buyer can see those issues and might not be sold on “overlooking” them.
Your neighbors also tend to pre-select new neighbors they would enjoy living in their neighborhood. An objective view, coupled with local market knowledge, can be much more important to you in selecting your new realtor than just the convenience of working with a neighbor.
My new realtor sold more homes last year than anyone else.
Who is more likely represent your best interests, an agent who listed twelve homes and sold only seven, or an agent who listed twelve homes and sold all twelve? You may want to ask some additional questions. How many of their listings did not sell? How many were reduced repeatedly before they sold? How long were the houses on the market? How smoothly was the process handled? How accessible was the agent when there were questions or problems?
The best agent is the one who will do the most effective job of marketing the property, negotiating the most favorable terms and conditions, and in communicating with the buyer and seller to make the process as smooth as possible.
Make it a fun choice.
Selecting your realtor should be a fun experience and give you an opportunity to develop a new relationship with a “trusted advisor.” A professional realtor will want to establish a “lifelong journey” that they can travel with you and assist you all along the way. Their professional demeanor, expertise, and personal qualities can be a reliable resource for you if you seek to establish a strong relationship.
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