When you're looking to buy or sell a home, you may not want to go it alone. But if you've never purchased or sold property before, you may find yourself in over your head without the help of a professional who's done it many times over. This is why real estate agents are able to make a living -- but some are much better at their jobs than others, and the last thing you want to do is choose the wrong one. Here are a few essential things to look for when seeking out a real estate agent.
1. Extensive knowledge of the local market
When you're selling a home, you want to make sure you get a fair price. And when you're buying property, you want to avoid overpaying. That's why it's crucial to find a real estate agent who knows the market well and can give you insight as to what you should be paying or listing your home for.
If you're looking to buy an investment property, you'll want an agent with experience in that arena. He or she should be able to tell you what rents go for in the area if you're looking to become a landlord. And if you're contemplating a fix-and-flip situation, your agent should be able to give you a solid sense of what to pay for a house in disarray.
2. Solid references
One of the best ways to ensure that you choose a good real estate agent is to solicit recommendations from people you know who have bought or sold in the area. Ask friends and neighbors what their experiences with their agents were like. If you're looking in a brand-new area where you know no one personally, make sure any agent you're considering can supply a long list of satisfied clients, along with phone numbers so you can contact them and talk things through.
3. The right designation
Different real estate agents specialize in different transactions. A listing agent, for example, can help you sell a home, while a buyer's agent is more suitable if you're looking to purchase property. This especially holds true if you're not selling at all but looking to buy an income property as an investment. The Real Estate Buyer's Agent Council (REBAC) can give agents the Accredited Buyer's Representative (ABR) designation, so you may want to look for it in a "buying only" situation.
4. Reasonable fees
Though real estate agents can set their own fees (which you'll pay as a seller), most charge a commission somewhere in the 5% to 6% range. If you see a much higher rate, ask what you're getting in return for it. Better yet, negotiate that rate down as much as possible. Real estate agents are often amenable to fee reductions, especially if you're looking to sell a home that can command a high sale price. The lower the commission you pay, the more money from your home sale you retain for yourself.
5. A contract with favorable terms
When choosing a real estate agent, you don't just want to look at fees; you also want to see what sort of contract you're locking yourself into. Aim to find an agent with a reasonable contract length. That could mean 90 days or less or 180 days or less, depending on how quickly homes tend to move in your neck of the woods. Commit to too long a contract, and you'll wind up unhappy if your agent proves incapable of moving your home off the market.
The right real estate agent could spell the difference between a smooth home search or sale and a turbulent one. No matter where you're buying or selling, vet your agent carefully before locking yourself in so you don't wind up regretting your decision -- and losing money in the process.