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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.
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