Regardless of your experience, buying or selling a home is no walk in the park. There are several unpredictable variables that need to be accounted for and a lot on the line. At the very least, the decision should weigh heavily on anyone. New investors, however, are at a particular disadvantage. Therefore, inexperienced investors are advised to seek the help of others. Having a real estate professional on your side cannot only help you navigate the onslaught of information that will inevitably come your way, but secure piece of mind as well.
Having a real estate agent on your side can help you in more ways than you may be aware of. However, you may never know what the possibilities of an impending collaboration hold if you fail to team up with the appropriate real estate agent. More importantly, a poor relationship with your real estate agent can impede the progress of your business. Therefore, it is essential that you hire the right individual. Ask the following questions to ensure that you team up with a good real estate agent:
1.) How long have you been in business?
Those familiar with the real estate industry are well aware that investing is not a spectator sport. Fortune does not favor the passive investor who is content with sitting on the sidelines. In fact, without trying to sound too cliché, real estate is more of a people business than anything else. Establishing a network of likeminded individuals is an integral cog in the machine that is real estate investing. But what does this concept have to do with the duration an agent has been in business?
It is a well-known fact that experience is directly correlated to the extent of an individual’s network. The longer a real estate agent has been in business, the larger their network is likely to be. Therefore, knowing how long a real estate agent has been in business will not only reveal the extent of their experience, but the nature of their relationships within the industry. An agent that has been in business for a long time will likely have a pristine reputation and references to back up such an assumption. Ultimately, knowing how long an agent has worked in the real estate industry will suggest their level of expertise.
While often overlooked, it is important to consider the differences between a part-time real estate agent and one who treats their title as a full-time business venture. As Mirtha Barzaga, a Realtor with Davidson Realty in St. Augustine, Florida, points out, “there [are] a lot of agents out there that do this part time, and they can’t provide the level of service that somebody who is doing this day in and day out can provide.”
2.) What types of properties are you familiar with and in which area do you specialize?
The diversity of the real estate market can prove to be complicated for a relatively inexperienced investor. For that matter, even savvy investors may have a difficult time adjusting to new neighborhoods and demographics. Therefore, it is particularly helpful to side yourself with a real estate agent that is familiar with the area you are thinking about investing in. Buyers and sellers require a knowledgeable real estate agent, as each neighborhood has unique characteristics that need to be addressed. The more information a real estate has on a particular area, the more helpful they will be in helping you find potential investment properties that meet your criteria. Conversely, those with little to no knowledge of a neighborhood may waste both your time and money on a respective rehab project.
Consider not only what agents tell you, but also the way they brand themselves online. Herman Chan, a real estate broker with Sotheby’s International Realty in San Francisco, says many agents are now active on social media with YouTube channels, Twitter feeds, Facebook pages and more, allowing you to do your own research. “If they’re branding themselves as a condo specialist and you want to buy a house, they’re probably not the right agent for you,” he says. You will want to make sure you enlist the services of an agent who has a familiarity with the types of properties you want to invest in. After all, investing in a condo is completely different than rehabbing a single-family home.
3.) What is your preferred method of communication?
Again, real estate investing is a people business. That means constant communication is not only important, but also necessary. A communication lapse of just a few hours can mean the difference between a missed opportunity and the deal of the century. Having said that, the ability to maintain communication with a respective agent should remain a priority. When choosing a real estate agent to represent your investing endeavors, make sure they are capable of responding in a timely manner. Perhaps even more importantly, however, is the mode in which they reach out to you. Whether it is text, email, phone or fax, you want to make sure their attempts to communicate are received.
Also ask who will be your main point of contact, because some busy real estate agents use a team of assistants or sub-agents to handle day-to-day tasks, and you may not have direct access to the agent you choose. “Maybe some people don’t care, but I think that’s an important question to ask,” Chan says.
4.) Can you share references?
Any real estate agent working within a respective community will have established some degree of reputation. The nature of their business will impact anyone who enlists their services. Whether or not it is a good reputation, however, is for you to discern.
While there is nothing wrong with taking a real estate agent for their word, you will want to conduct your own due diligence. Ask the real estate agent if they have references they are willing to share. Their answer to this question will tell you more about them than you may realize.
Take note of their willingness to share references. A good real estate agent will be more than happy to share references, as past clients will most likely portray them in a positive light. Conversely, subpar agents may be less inclined to divulge such information. While this does not automatically discredit them, it should raise a red flag. If they are not willing to share references, it may mean they have something to hide.
In contacting past clients, you are eliminating any means of self-promotion. You are essentially getting an unbiased opinion of the agent in question. Also ask what portion of their business comes from referrals or repeat business. If an agent mainly works on referrals or repeat business, that can be a positive indicator that prior clients were satisfied.
5.) What will this cost me?
Buyers often don’t pay commission directly, but sellers often do and the costs can vary from agent to agent. For buyers who worry that bringing up the commission topic will be uncomfortable, Chan suggests phrasing this question as, “What will it cost me to sell this property?” Also ask for a breakdown of estimated closing costs. “If they feel that it’s appropriate in your market, some agents throw in free staging or pay for your moving expenses, but you have to compare apples to apples,” he says. “If you get someone who’s charging less, are you getting reduced services for reduced commission?”