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Mrs. Groovy here. I have a favor to ask of you. Mr. Groovy’s post about Egotrage (a word and concept he coined,) is featured in the Rockstar Rumble over at Rockstar Finance today and he needs your vote. We’re already seeing other bloggers use Egotrage as a real word, like here on Catfood Retirement—and that’s without attribution to Mr. Groovy! (Say what’s the big idea?!!!) So let’s get Egotrage into the personal finance lingo!
Vote here, keyword “Egotrge” in Game 15 and help Mr. Groovy advance to the next round.
The polls are open until 5am eastern, tomorrow (Saturday) morning. Thank you!
OK on to today’s post. You asked for it; you got it. Well, actually, Joe Udo from Retire by 40 asked for it. He requested a post with tips on how to choose a realtor, and our dear friend Laurie Blank reached out to answer the call.
Laurie is a realtor in the St. Paul/Minneapolis area who has a passion for helping people fulfill their home buying and selling dreams. She is also a freelance writer and former blog owner who has an obsession for all things personal finance.
Take it away, Laurie!
So, you’re buying or selling your house. If you do it right you’ll use a licensed real estate agent. After all, real estate agents (or realtors, as they’re called when they’re members of the National Association of Realtors) have the know-how and the inside scoop on helping you accomplish your home buying and home selling goals, right?
Maybe, maybe not. I’ve gotten screwed by realtors before and I’m sure that if you haven’t, you know someone who has.
As a home buyer or seller, choosing a real estate agent is an important move. After all, if you’re selling your home you’re going to be paying your agent a hefty chunk of change—upwards of 10% in many cases.
And in some states buyers pay agents too, but even if you’re not paying your agent to find you a house, you want to be sure he or she will act in your best interest since you’re charging them with finding the place you’ll live in—probably for quite some time.
How do you know if the agent you’re choosing will be worth what you’re paying him? Here are some things to think about before you make your decision.
Integrity Should Be a Top Consideration
Integrity is important in any profession, but when you’re dealing with helping someone sell or buy their home it’s a top-value trait.
In real estate licensing classes, integrity, character and honesty are pounded into attendees’ heads over and over again. It’s an absolute requirement in order to gain and keep your license and real estate agents who intentionally act without it can be fined or lose their license.
Yet, with five years of mortgage banking experience and my new career as a realtor, I’ve come across more underhanded things than I care to admit.
In fact, if I’d known more about ethics requirements of real estate agents when we bought our last house I probably could’ve gotten our agent’s licensed revoked.
People are selfish. Not always, but often. And when there’s several thousand dollars on the line people can get greedy.
This is why I suggest integrity as the top priority checkpoint you look for when choosing a realtor.
How do you know if a real estate agent has integrity? I’d say start by asking. Say “I’m looking for an agent whose integrity is a top priority. How important is integrity to you?”
If you don’t want to ask that question directly, simply listen to what the agent is saying during the interview process. Listen for verbal catchphrases that give a hint to his or her character—and take them seriously.
If an agent says “I’ll do whatever it takes to sell your house”, that would be a red flag for me unless they quantified it with a statement of integrity or unless they talked about a specific plan that was ethical.
You need to be able to trust your agent to do what’s right, even in the face of temptation or potentially losing a sale.
Experience Isn’t Necessarily Important
On some level experience matters, however newer agents sometimes have advantages that more experienced agents don’t, such as:
- A burning desire to succeed since their career is so new
- The newest and most updated training techniques and knowledge of laws
- A (likely) not terribly long client list that gives them more time to focus on you
What’s more important as you interview agents is not necessarily their experience, but what kind of a support system they have behind them and how willing they are to use that support system to get what they need to get to do the best job for you.
If you’re interviewing a new agent, but they’re not afraid to admit they don’t know everything and go directly to their manager or mentor to get immediate answers and support, you’ll probably find their eagerness trumps any lack of experience.
Interview at Least Three Agents
I know it’s cumbersome, but as an agent myself I feel it’s important to interview a few different realtors unless you know one directly that you’re certain will do a good job for you.
Why? Because if you’ve only ever tasted Chicken Noodle Soup, how do you know you won’t fall in love with Wild Rice Soup or Clam Chowder and have an everlasting relationship with it?
Without interviewing multiple realtors you can’t really get an idea of what’s out there and who offers what types of services.
It would be like only test driving one car before you buy. Get references from loved ones regarding realtors they know and interview at least two—preferably three.
Again, you can disregard this situation if you know your Uncle Joe is a successful realtor and will do an upstanding job for you because you know his character and his work ethic, but if you don’t know anyone personally, I’d suggest the interview route.
Ask About Their Plan for Selling Your House (or Finding You a Home to Buy)
Every good agent will have a marketing plan for selling your house or finding you a home to buy, and they should be able to explain that plan to you in detail. You’ll want to know they’ll give detailed care and consideration to your situation.
Ask if They’re Knowledgeable About Selling (or Buying) Your Type of Property
All real estate agents are trained first and foremost in buying and selling residential homes because that’s what 80-90% of agents end up doing.
However, if you’re buying or selling a rental property or a commercial property, you’re going to have a much narrower list of trained realtors to choose from. I’d think twice about having a residential agent work with you on commercial or rental properties unless they’ve been adequately trained.
Similarly, I’d think twice about hiring an agent who specializes in commercial properties to help you buy or sell your home, unless they can show you they know a lot about your market as well.
Ask About References
I’d consider asking for references too as you decide on an agent. If your agent is newer and doesn’t have any references yet don’t be afraid to use them if they meet the other suggested qualifications here, but feel free to ask for character references.
Go with Your Gut
Not all of you may agree with this tip, and if you’ve learned over the years your gut isn’t reliable, I’d say you can throw this tip out the window.
However, I’m a firm believer that a lot of bad decisions could have been avoided if people would have just gone with their gut.
How many times have you fell into a bad situation and said to yourself “I knew better. I felt in my gut like I should have…….”
When you’re interviewing agents, you may find yourself in a situation where one says all the right things, but you just don’t feel right about him or her.
Listen to your instincts and go with the one you feel best about, especially if your gut has proven right in the past.
Buying and selling a home is a big deal, and you’ll want to be represented properly and ethically.
Mr. Groovy here. Such great advice. Laurie really nailed it. And I think she coached Mrs. Groovy because Mrs. Groovy followed these tips to a tee and she got us a cracker jack realtor. So thank you, Laurie. I’m sure these 7 tips will help many future home sellers and buyers.
Okay, groovy freedomist, that’s almost a wrap for this week. Just one more thing. In addition to a kick-ass guest post, we also have another episode of Talking Trash with Mr. Groovy. And you thought life couldn’t get any better! Enjoy.
I will go for a mix of integrity and experience. Though it is very hard to know at the first instance, so it is wise to meet different realtors, interview them and then use the one that makes the most sense.
I love the part where you mentioned that all real estate agents are trained in handling all kinds of properties. We want to make money off the architectural property we purchased three years ago but we don’t have any idea about the current market. Maybe we should work with a selling consultant based in South Pasadena, CA, and let them guide us through the process.
Great tips! From a buyer’s point of view, my wife and I were very lucky to find a great realtor when we moved to a new city and bought a home.
Since it was a new city (Miami), we didn’t really know the neighborhoods and what would be best for us. Our realtor put time into getting to know us and using her knowledge and judgment to find the best area for us. She even veto’ed (correctly, I might add) a neighborhood we thought might be a good fit, but really wasn’t.
So I’m a big believer in finding a great realtor, especially if you’ll be buying in a new city.
You were very lucky, indeed! From what I’m hearing, many realtors aren’t very verbal with their opinions when you need them most.
Since we made a few trips to Charlotte before relocating we were able to drive around several neighborhoods at night. Seeing ones with locked gates over the retail store windows clued us in on a few to stay away from. Barbara Corcoran used to advise buyers and renters to check out a neighborhood at night before committing. She also said if a Starbucks is nearby, that’s a good sign. I would also include Panera, Trader Joe’s, and any high end supermarket as a good sign. FYI we’ve got none of those very close by to Groovy Ranch but that’s par for the course in rural areas.
Very helpful (and thanks again for the list Mrs. G!) So one of our new found friend’s wife is a realtor. She doesn’t work in the city/county and she usually deals with new construction homes. But it’s the only personal contact we have and I feel like they do better work if you’re actual personal friends in some way vs searching the internet/yelp.
Unfortunately she’s in a different city and our place is almost 100 years old… But she’s super sweet and has good reviews…I don’t know I’m torn already. Interviewing 3+ agents is good advice. I should do that before dumping all this here haha.
(And voted for you on RSF!)
Lily, Lily, Lily! NO WAY should you hire your new found friend’s wife! It would be a huge mistake even if she is super sweet. You may not want sweet. You may want a pit bull.
This realtor is in a different city and you need someone local who knows your market, how to price your home properly, and how to advise you. You need someone close by who can show up at a moment’s notice if you need her.
You can expect a 100 year old home to have inspection issues and for a buyer to try to use the inspection as a bargaining tool. Your realtor should know how to combat that. What should get fixed and who should fix it? What is already accounted for in the sale price because it is a 100 year old home (meaning you already set the price correctly and therefore, why should you spend more, or give a buyer what is called a “concession” or a dollar amount, towards fixing the problem?)
Dealing with new construction homes is nothing like dealing with a 100 year old home. In new construction, the builder is the seller and they’re trying to get the buyer to pay for upgrades. In some cases, since everything is new and has already been inspected, a buyer won’t even have their own inspection (which is not smart). The seller/builder’s realtor is not accustomed to the type of demands a buyer might have with an older home.
This is a business transaction and you owe it to yourself to perform due diligence. This is not the time to hire the wife of a new friend. If she’s a good realtor, she wouldn’t even accept the job being so far away, and so far removed from your type of sale.
Don’t make me come over there and slap you, OK?
Mrs. Groovy recently posted…7 Tips for Choosing a Realtor
Holy c— please don’t hit me!!! Advice taken!!!
I’m contacting some pros tomorrow that’s based in Seattle and has a lot of reviews of Zillow as home sellers (Seattle has very old homes in general.)
I hope they have availability – and I’ll ask how they would combat inspection contingencies. I think our rental does has some 100 year old quirks that’s typical of older homes.
GREAT advice, Laurie! I’m pretty fortunate to have found a realtor who I believe to be among the very best in the Twin Cities. He’s helped me through four rental acquisitions. And never once applied an ounce of pressure. If anything, he tells me to walk away.
In the future, I’d like to perhaps look into becoming a realtor myself, to save on commissions when it comes time to sell some of those properties.
I think becoming a realtor could be helpful in your position, or if you’re flipping properties, or building spec homes to sell.
It’s great that you’ve found a realtor who has been so helpful! Sometimes walking away is the best advice and from what I read, some realtors don’t like giving advice at all. Duh? I know, right? That’s one of the strongest reasons for needing one.
Great advice Groovester. I bought my house 16 years ago and haven’t had to deal with realtors since, but I went with the recco of a very close and trusted friend, a friend who I knew couldn’t possibly steer me wrong. The realtor was indeed top notch.
Not a repeatable system for everyone, but hammers home the importance of your friends and personal connections.
Great advice, AF!! “Trusted” is very important in the real estate biz!
Finding good realtors is very difficult. They are there but it takes effort. In my case I did most of the work i.e. from figuring out the best price to negotiations based on inspection. I wish I had some additional help i.e. realtor probably had a better pulse of the market. I wish I had seen your post before 🙂
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I agree!! Hopefully you can use the advice in the future. Thanks for reading!!
I think we’re staying put in the home we’re in now, but on my way here, I definitely had some experiences with some not-so-great realtors. I like the idea that a beginner may have more time to focus on you, but you have to make sure they’re a go-getter.
As for getting things done, I think the day fills with other things when you’re not working and/or caring for kids. As you get older, some of those things are naps. 🙂
Gary @ Super Saving Tips recently posted…11 New Tax Law Changes That Can Affect You
LOL, I agree, Gary, I agree!
I like the advice to consider someone with less experience. Sometimes that “beginner mind” is the best. And I like the idea of trusting your gut — unless you have a bad track record on that! Pretty funny but true.
Thanks, Susan!! So true on trusting your gut to be wrong if you have a track record there too – people underestimate the importance of that.
I’ve been a licensed real estate broker for about 15 years, mostly buying and selling my own residential properties, but also helping out friends with their homes. I’ve seen all kinds of things, and I think Laurie hits the nail on the head that integrity is paramount. Also, I would want a realtor who is always willing to provide their reasoned opinion about a property. You deserve to work with someone who has enough knowledge to share that advice and experience. Oddly, I’ve experienced many realtors who turn to stone when you ask what they think of a property you’re viewing and it’s pricing. I think they don’t want to loose a commission by giving you the real scoop, which is where integrity comes into play. It should always be the client’s needs, not the realtor’s, that is the priority. Anyway….all that said, just got my license active in Virginia again, so…if you live in the NOVA area and need a realtor, feel free to hit me up (I’ll give you a Egotrage Groovtastic Rebate, haha)
Good point. If they don’t give you their honest opinion, then they’re pretty much useless.
Funny thing – they really frown against agents giving opinions for liability reasons. I think that’s why you find some agents turning to stone when they’re asked. You’ve got to be careful about what you say.
Great insights as ALWAYS.
I will definitely be keeping these in mind when we look to buy in the next 3 years.
Shoot…If we make our move to Charlotte, maybe you guys can give us an even more in depth inside scoop of the real estate agent scene down there!
We’d be glad to help. Are you moving anytime soon? We may be out of here by Memorial Day. One thing I’d recommend — probably 90+% of the homes on the market in this area are in subdivisions. If you know the zip codes you’re interested in, I’d look at recently sold properties in realtor.com and see who the selling agents were. If you can narrow it down further to subdivision, even better. The more they know about your specific area, the better.
If you’re not exactly sure where you want to live feel free to run some neighborhoods or addresses by us. It’s hard to get a feel for or the reputation of an area until you spend some time here. When we first began making trips down, we thought the university area might be OK. But that was before we found other neighborhoods. Also, you can get more value just a little outside of Charlotte (like where we are in Union County). But it depends where you’ll be working, what kind of restaurants and night life you’ll be looking for, if you plan on driving daily, etc.
This is good advise. My sister is planning to move to Charlotte in about two years. I will pass this on.
Definitely a worthy read. I think it’s vital to know how agents get paid in your state. This will allow you to keep the information you need to close to the vest. It may also clue you in on when the agent may not be acting in your best interest.
I think interviewing multiple is key. Ask each of them the same set of questions so you can compare apples to apples.
Don’t just get the first realtor you know.
Thanks! Glad you enjoyed it. Yes, it’s so important to sift through a few before making a decision unless you’re certain you know who you’re dealing with.
There’s a saying that the agents on both sides work for the seller. In a sense, I think there’s truth in that, even if the buyer’s agent has integrity.
I read a number of tips that I wasn’t willing to act upon — such as call, or have some friends call the realtor you have in mind and see how quickly he or she gets back to you when making an inquiry. I know the one we chose gets back very quickly by email which is one of the reasons we liked her.
If you’re going to work with integrity you’ve got to keep your client’s best interest in mind and forget about the paycheck. I agree it can take some effort to do that, but I always try and think about if it were my brother or sister, I’d want them to have a house they love above all else.
Thanks for letting me share my wisdom, my dear Groovy friends!! So happy for you that you found an agent that is top-notch!
Thank YOU, friend, for providing top notch advice for our readers! Any buyer or seller would be lucky to have you as a representative.
Just cast my vote. The competition is getting a little tighter. Good luck to Mrs. G. Tom
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Thanks, Tom!
Interviewing several realtors is a good idea. I remember my parents asked our next door neighbor who was a realtor to sell our house when we moved once.
He didn’t try too hard to get top dollar for the house, so either he was just looking to make an easy buck or he was wanting to keep the comp values down for his own house and property taxes.
I might be way off on that, but I know that’s one of their regrets was not interviewing more realtors to get a realistic figure on the selling price of the home.
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Wow, thanks for sharing that story, Josh!! Yes, I’ve seen realtors lowball selling prices for the benefit of getting a quick sale. There is something to be said for pricing a home right, but pricing it far below its value to make a quick buck is not okay,.
I think the role of the realtor is undervalued. Some feel that anyone can perform well and that’s just not true.
It’s too bad your parents didn’t cast their net a little wider. We hired a neighbor in NY to sell our condo but we weren’t friends (we are now) and we interviewed others. She knew our building and our market extremely well. She stayed on top of the buyer’s realtor, lawyer and mortgage lenders. The buyers hired a realtor friend of the family who did real estate on the side and wasn’t very adept. The buyers couldn’t really afford our property. They took out two loans. Our realtor kept the deal together.