Buying or selling a home is one of the biggest financial transactions of your life. For a $300,000 home, each buyer and seller are usually represented by a Realtor® who gets paid almost $10,000 each to represent you. Since the internet has made marketing your home for sale or finding your next home easier than ever, today’s Realtor® responsibilities aren’t the same as was in the 1990s. So, let’s see what today’s best Realtor® looks like before you trust one with $10,000 of your money.
Are Their “Days on Market” Too Low?
When a real estate agent tells you, “My listings sell for 15 days quicker than the industry average,” beware, or better yet, ask them why. The number of days a home is on the market before an offer is accepted is called the “days on market” or DOM. When a home is priced correctly, the market will determine the DOM, not a flashy listing agent. If a home sells relatively quickly, it was priced too low, which hurts the seller. Just make sure you understand all the details of a claim that sounds something like, “I can sell your home quickly” (and if they say this, ask them to lower their fee!). Ask your agent what the average DOM for your neighborhood is and set that DOM as an expectation.
Check an Agent’s Continuing Education
Most real estate agents require 16 hours every two years of continuing education. Ask your agent how many hours of continuing education they had in the last couple of years. Then, you can check your agent’s education record HERE. This will help you assess their honesty AND how educated they are within the industry, as an agent with more than required education normally indicates a high achiever.
Do the Agent’s Sales Figures Seem High?
When an agent touts their recent sales figures, beware: Are those are solo or team sales? 20-40 transactions per year per agent is a good rule of thumb. More transactions than that can start leading to quality concerns, not spending enough time for your situation, etc. Lots of sales by one agent can indicate that their listings were sold for under market value. Some agent groups/teams do 1,000s of closings per year, because they have dozens of team members… the transactions per person average may only be a handful per year. There’s nothing wrong with this, just know the numbers.
The Agency Agreement
Whether you’re hiring an agent to help you buy or sell, most agency agreements are written to protect the agent, not you, the client, whether you’re selling or buying. It would be difficult for an agent to change some of the pre-printed language in an agreement. Therefore, it is common to see numerous extra conditions written in by the agent towards the end of the agreement. These may be extra fees, cancellation conditions, commission conditions, and other “fine print.” A good agent will discuss these conditions at great length until you are 100% comfortable with them. You will generally find more extra conditions with larger, national realty companies. Don’t be afraid to think about things and wait a day or so before signing. Also, be sure to understand, although there may be industry tendencies (i.e., seller helps buyer with some closing costs, certain commission structures), everything is negotiable.
Look for a Friendly Agent
When you hire an agent, you hire someone to sell your situation to others… your agent becomes an extension of you and your goals. Since your agent will be talking with strangers to buy or sell you a home, you want them to make it easy and inviting for others to do business with them. If your agent is not friendly by nature, it will be hard for other agents to want to work with him/her on a transaction.
Full-Time or Part-Time Agent?
There are about 30,000 real estate agents licensed in Tennessee. It’s hard to find data on how many of those work in real estate full-time, but it’s safe to say 1/3 do not. Some brokerage firms even hire mostly part-time agents. There is nothing wrong about hiring a part-time agent, just be sure they have enough time and experience to get the job done. Ask them what their schedule is and if they have enough time to find or sell your home. And don’t be afraid to ask them why they aren’t doing real estate full-time.
Look for Professionalism
First impressions are super important when buying a home and when hiring an agent. When your agent meets you for the first time in person, look for polish, punctuality, and organization. Most people don’t like to be waiting even five extra minutes when meeting someone. If your agent is late and hasn’t informed you about being late, this is not a good sign of things to come. Hire an agent who calls, emails, and meets you when they say they will, accepts responsibility when they’re at fault, looks you in the eye when talking, uses proper grammar and appropriate language, and is organized with their thoughts and sales pitch.
Doe the Agent Listen of Talk?
An agent who doesn’t listen to you and is more interested in touting their experience and sales figures can trick you into a quick sale, which may mean you paid too much or sold for too little. Watch out for fast-talking agents who talk more than they listen. YOU are the important element in a real estate transaction. This means your goals should come before an agent’s goal of getting to closing ASAP, collection their fees, and moving to the next transaction. A great agent won’t make promises about finding or selling your home. A great agent will be honest about the industry, local housing conditions, neighborhood trends and your goals to formulate
Look Closely for an Exit Clause in Your Agreement
Most all contracts can be terminated. Look for an easy exit solution in case your agent doesn’t perform to your expectations, your plans change, or an emergency arises. Many real estate brokerages typically will have some exit language that requires the seller to pay an exit fee because the listing agent has spent time and money visiting the house, paying for a professional photographer, and other marketing costs. To help recapture those expenses, an exit fee is typical. For a buyer agent, maybe the agent has spent several hours with a buyer visiting homes and looking for the right match.
Finally, Go With Your Gut
If an agent tries to tell you that open houses are super important but your research overwhelmingly indicates otherwise, go with your gut. If an agent makes the wrong first impression, go with your gut. If the agent doesn’t’ look you in the eye when making a sales pitch and listening to your story, go with your gut. Your gut is usually right.