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You wouldn't hire someone to work in your office without interviewing them and checking their references, yet you might very well consider using a real estate agent you met briefly at an open house or called in response to an ad. Since this is the person who will be guiding you through the biggest financial and legal transaction of your life, search for your real estate agent with almost as much care as you hunt for your home.
Using the Internet to Find an Agent
The National Association of REALTORS® Web site is one place to search for agents in your area who use the registered designation of REALTOR®, which identifies a real estate professional as a member of the association and someone who agrees to abide by their code of ethics.
HomeGain.com is another online resource that let's you screen real estate agents. HomeGain founder Bradley Inman says buyers and sellers who use the site can expect to get about seven proposals from agents who want to represent them.
When using the Internet, be aware that agents pay for listings on some sites, so you may not be finding all of the best agents who could meet your needs. With that in mind, use the search results to check experience level, education and recent sales in your area. Then set up interviews with at least three candidates and be sure to check references.
Personal References Make the Agent Search Easier
Ask everyone you know who has bought or sold a home for their recommendations -- and ask specific questions such as:
- What were the agent's strengths and weaknesses?
- Did the agent demonstrate knowledge of the home buying/selling process and the market?
- Did the agent generate results (new properties for buyers to see or prospective buyers for a seller's property)?
- Was the agent attentive to clients' specific needs and schedules?
- Did the agent communicate well with the other party's agent?
- Most important, did the agent have integrity?
Don't forget to ask other professionals who work with agents for their input. Check with your mortgage broker, banker, attorney and financial advisors. Ask other agents who they respect and why.
What Agents Get Paid
Commissions generally run between 5 percent and 7 percent. By law, commissions are negotiable, but you'll find that 6 percent is pretty standard with most established agencies.
That commission is split between the listing agent and the buyer's agent. The money comes from the seller, but you can be sure it's built into the home's price tag.
What to Look for If You're Selling
If you're selling your home, interview at least three agents, checking background and recent sales performance in your area, and expect each to outline his or her plans for marketing and selling your home. A listing, or seller's, agent should also be able to advise you on ways to make your home more attractive to potential buyers.
Make sure your agent has a realistic (though perhaps optimistic) sales price target -- setting the price too high can be as much of a problem as setting it too low. Your agent should be able to justify a particular asking price, providing support (comps, or comparable homes that have sold in the past few months) that it is in line with current market conditions.
Once you decide on a listing agent, you will sign a listing agreement, which is a contract that shows what the agent is obligated to do, the price you want, the terms under which you will sell your home and the commission you will pay. The length of the agreement is negotiable, but make sure you understand that you may be giving the agent exclusive rights to sell the home until the agreement expires.
About 11 percent of home sellers do not use an agent. Some sellers find a middle ground, hiring professionals for flat fees to do some of the work, such as running open houses or placing ads, while managing most of the sale themselves.
Whether you're buying or selling, doing it yourself or not, you'll need to build a team of professionals for at least some of the process. Make sure they're the best.