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Real Estate Agents Rock!
Finding and Working with Your Perfect Real Estate Agent
Written By Lisa Stassi
Introduction
Real estate agents fall into numerous niches based upon their expertise and experience level. It is important to find the precisely right real estate agent for you as soon as possible because the right real estate agent could make you large sums of money while the wrong agent could inadvertently cause you to lose large sums of money. The purpose of this book is to help the consumer and the real estate investor waste as little time as possible finding that real estate agent that wants to work with him and prosper him financially.
Four Broad Categories of Real Estate Agents
In general, there are four broad categories of real estate agents. A typical consumer needs a residential real estate agent for residential purposes, i.e., to find that consumer the right house to purchase. A residential real estate investor may choose to work with an agent and in that case, he would need a residential agent for investment purposes.
A commercial real estate investor needs a commercial real estate agent and this category can be further broken down into commercial office, retail, and industrial. Any one of these types of agents can lease as well as sell property, but an agent that excels at leasing is often much needed and difficult to find.
Finally, property managers are generally real estate agents that manage both residential and commercial real estate. Residential property managers are numerous but must be carefully screened and supervised. Large commercial brokerages tend to manage the properties of their clients but finding an excellent property manager for the small commercial investor is becoming increasingly challenging.
Residential Agent for a Residential Purpose
A residential agent whose purpose it is to find you a personal residence is the type of agent that most people are familiar with. All agents have the education required for licensing but many agents have additional education and training including various certifications. The biggest mistake most consumers make when hiring a residential agent is hiring a friend or a relative because they feel comfortable with that person or they believe him to be trustworthy. Another common mistake consumers make is hiring an agent who appears to have the most education and certifications in addition to that required for licensing.
What mattersthe most when hiring a residential agent is results and market familiarity. The availability of sites such as Zillow makes the decision of which agent to hire much easier. Zillow provides profiles and reviews of residential agents. When seeking an agent to buy or sell your house, search for an agent in Zillow using your zip code and look for those most highly rated. Take the time to actually read the profiles and especially the reviews of a few highly rated agents in your area. If you are selling your house, it is important to hire an agent who is familiar with your market and possibly even lives in the market himself.
If you are seeking to buy a house, you should enter the zip code of the area where you are seeking to buy a house. An agent that lives and/or works in that area will be far more familiar with the market and better suited to help you find the best house for the best price. For example, if you live in Henderson, Nevada but you wish to move to Summerlin, Nevada, you should choose an agent that lives and works in Summerlin.
Once you’ve identified a few agents you might want to work with, it’s time for a telephone interview. This is important because the vast majority of negotiation in real estate occurs over the phone or e-mail. This is your opportunity to see for yourself how your potential agent handles himself on the phone. Your prospective agent should be clear, pleasant, and friendly over the phone.
Your goal for the first phone call to a prospective new agent should be to determine how responsive he is and whether he would really like to have your business. If your prospective agent is very responsive, you might catch him on his cell phone driving his car to a closing. If you get his voicemail, leave a message and pay close attention to how long it takes him to get back to you. If it takes the agent longer than 24 hours to get back to you, he may be too busy to help you or may have some serious personal distraction going on.
When you have the opportunity to have a nice, long chat with your prospective agent there’s a few important questions that you must ask. If you don’t ask some of these questions, your prospective agent may not bring them up either. Selling your house or buying a new one is a serious and significant transaction in a consumer’s life involving large sums of money and it’s important to do everything possible to protect yourself and hire the very best agent for yourself that you can.
How quickly do you think that my house will sell?
Your prospective agent may not want to answer this question because he fears potential liability issues. What if he tells you three months and it takes six? A market analysis should show the average days a house in your area remains on the market prior to sale.
How many houses similar to mine have you sold in my neighborhood in the past year?
The answer to this question can be a little shocking and amusing at times because some agents are so familiar with a particular market that you will learn that he has sold your house and other houses nearby on numerous different occasions.
Can you perform a written market analysis for me?
Any competent real estate agent should be able to provide you with a written market analysis showing you exactly what has sold in your neighborhood recently, its condition, and its price. In fact, a very busy and successful agent should have an assistant that will provide this for you within 24 hours or so.
Is there anything going on in your life that might interfere with your marketing my house in an effective and aggressive manner?
I’ve been a real estate investor for approximately twenty years so I’ve experienced everything at least once. I have had agents that agreed to sell a house for me and then simply went on a long vacation in the middle of high season when all of the buying and selling was going on. You might try directly asking, “Are you planning to take a vacation anytime soon?” If you are choosing between two excellent agents and one is about to go on vacation, you might want to choose the other.
If something tragic and horrible were to happen to you or a member of your family, who would take over your business and may I meet/speak with them?
Continuing with the theme of expecting the unexpected, this has happened to me at least twice, once with an agent and once with an attorney. Once again, this is a very large financial transaction and you must protect yourself and look out for your best interests. Don’t simply assume that if your agent is in a car wreck everything will magically work out just fine. Find out who his backup is and make certain that his backup is at least as competent as he is.
If you were to become ill, would I be automatically released from our listing agreement?
I once had a real estate agent and property manager who suddenly became ill with cancer and eventually died. Her husband was her partner but Linda was the one with the real head for business. When Linda became very ill, her husband, Ted, stayed home most of the time to care for her. Months passed before I realized what was going on and I don’t even remember what tipped me off but I believe that it was a call from a tenant. Since I had a property manager, a call from a tenant was the last thing I was expecting.
Ten to twenty years ago, real estate agents were far more willing to simply let you out of a listing agreement if you were unhappy for some reason but that is not the case today. I have personally experienced and I have heard of situations where a real estate agent or broker was not performing and still refused to allow the principal out of the listing agreement. You must have the foresight to ask your potential agent the circumstances under which you may be released from the listing agreement without penalty.
If I hire you as my agent, how often would we communicate?
The issue of regular communication is important but it can be a little awkward. People who are smart and hardworking are difficult to find and don’t wish to be micromanaged. Professionals who are micromanaged feel as if they cannot be trusted. Still, as the consumer, you deserve to hear how things are going on a regular basis. Until I am absolutely certain that an agent I’ve hired is doing an excellent job for me, I request a five to ten minute telephone call once a week and I always agree to conform to the agent’s schedule. Handle this issue delicately and politely and it shouldn’t be a huge problem.
If I hire you as my agent, what will you require from me?
Truly smart, hardworking, savvy professionals that can get the job done quickly and make you money can be hard to find and hire. They are gold and you must treat them that way. Remember to always be polite, kind, and respectful to these professionals when they enter your life. At a minimum, your agent will probably require you to keep your house as clean as humanly possible while it is on the market, not be present when the house is being shown, keep any animals kenneled during the day in the event the house is shown, and place a lockbox on the house for easy access by other agents.
Is your errors and omissions liability insurance in force?
If you are talking to an agent that is highly rated on Zillow, it’s very likely that his errors and omissions insurance is in force and up to date but you should never take something so important for granted.
I’m certain that if I hire you, you’re going to do a fabulous job for me, but if I’m not happy with your performance for some reason, how can I terminate the listing?
I’ve saved the most incredibly awkward question for last. You might want to practice asking this question in the mirror first. If you’ve tried to reach your agent three times in the past week and you’ve been unable to do so and her assistant doesn’t have a clue, you may start to wish you’d hired someone else. It’s extremely important to consider the possibility of needing to fire your agent before that ever happens.
Ask your prospective agent to show you the termination clause in the listing agreement and ask if the terms are fixed in stone or can be modified, if necessary. These days an agent is likely to insist upon being compensated for “marketing expenses” before letting you out of a listing agreement. It is possible that you could modify a listing agreement so that your ability to terminate the listing in the event your agent isn’t performing is enhanced.
Short Sales
If you need a short sale, you have my sympathies and you probably know that you need a short sale. This is still a complicated, large financial transaction and you must find the very best professional possible to help you. When you need a short sale you owe more than your house is worth. People think that all of the short sales are over and done but that’s not true. A market can suffer a severe drop from job loss or some other issue and suddenly everyone needs a short sale.
The first thing to understand and accept about short sales is that not every real estate agent is qualified to implement a short sale and, recently, more agents simply do not wish to participate in a short sale. Real estate investors are generally willing to do short sales but they expect to be able to make a profit from the transaction. Many agents no longer wish to participate in a short sale because they’ve had an experience in the past where they worked hard to find a ready, willing, and able buyer only to have the lender refuse to accept the contracted price.
If you live in or near a large city, finding an agent to handle your short sale probably won’t be too difficult. Many large brokerages have at least one agent who specializes in short sales and when the market was in turmoil, many large brokerages actually had entire short sale divisions. Take a few hours to either call the major brokerages in your area or research them on the internet to find a few short sale agents. Once again, research that agent on a site such as Zillow that provides profiles and reviews. In addition to the questions you would normally ask an agent you were considering hiring, here are a few additional questions you should ask your potential short sale agent.
If I allow you to handle my short sale, what is the likelihood of success?
This is a very tough question to answer and your prospective agent should be truthful with you. The truth is that the likelihood of success of the short sale depends largely upon whether the bank agrees to accept a price for the asset which a buyer has agreed to pay. Sometimes they will, sometimes they won’t.
How long will this take?
This is another tough question. Your agent could price the house low in order to attract a potential buyer quickly but the bank holding the mortgage might refuse to accept this price and then you will be back at square one.
Will this damage my credit?
It is basically impossible to avoid a hit to your credit score when you go through a short sale. Expect up to 160 point knocked off your credit score. Your agent should know this and tell you the truth.
Will I owe taxes as a result of my short sale?
In the past, the answer was a qualified “no” but the answer to this question may change in the future. A good short sale agent should be up to date on recent legislation affecting short sales.
Residential Agent for an Investment Purpose
A real estate investor may choose to invest in residential real estate, commercial real estate, or some combination of both. Residential real estate investors may choose to find what we call our “leads” on our own or we may choose to work with real estate agents.
Today, there are numerous, excellent sources of leads for residential real estate investors. A bold residential real estate investor may choose to place “I Buy Houses” signs throughout his city but today you can actually purchase internet leads of motivated sellers. The companies that produce the internet leads may place “I Buy Houses” ads on Google or they may hang what are called “bandit signs” throughout a neighborhood and pass those leads on to you. These leads can be expensive but if you don’t wish to experience the pushback from people who dislike bandit signs, internet leads may be a good choice for residential real estate investors.
For a residential real estate investor, working with a residential real estate agent has many benefits. Personally, I’ve been wonderfully mentored by residential and commercial real estate agents over the past twenty years and became very good friends with many of them. So, mentorship can be a major benefit of working with a residential real estate agent for a newer investor. Another major benefit or working with a residential real estate agent for a newer investor is the protection it will afford from being falsely accused of practicing real estate without a license.