The relationship with your real estate agent is one not to underestimate. It may be short with plenty of emotion, but may bring you the house of your dreams. So having the right real estate agent on your side can make the world of difference.
Finding an agent
A good starting point is often your friends and family. If they’ve had a good experience, they would be more than happy to recommend their agent to you. Looking at listings may also give you an idea of which agents to contact. You may see their name appear often, particularly for houses that you may like.
You’ll note that some real estate agents specialize in neighbourhoods and towns. Some may specialize in new builds or certain types of property. You’ll find this out once you start talking, though there are two important areas which you will need to understand just as quickly.
Exclusivity and commissions
A real estate agent will want an amount of time in which you only work with them. What that time or exclusivity term is, depends on your urgency to buy a house. The term could be a week, three months or more.
Most agents will suggest three months. But if you know which properties you want to visit, suggest a much shorter exclusivity term. Great agents won’t have a problem with that. Note that if you find a house on your own during the exclusivity term, the agent will still get their commission.
Commissions can be challenging for buyers. A seller and their agent will set a fee on a listing, which can be between 3% and 7%. Usually, the buyer’s agent will get half of that fee. You won’t know what that fee or percentage is until you’ve agreed to buy the house. So your ability to negotiate is somewhat limited, but it’s still worth discussing with your agent.
If the fee is low, your agent may ask you to make up the difference so they get what they expected. If it’s high, you may want your agent to give you any extra fee that they get.
Try agreeing on an initial percentage for their work and what happens if the commission is higher or lower. Make sure any agreement is in writing; a great agent will offer you a buyer service agreement that will outline the commission.
What makes a great real estate agent
Firstly, an agent’s network. Who they know and how quick they hear about new listings can land you your dream home. In aggressive markets or sought-after neighbourhoods, houses can be sold before being listed. These houses filter through the real estate agent network. If you’re being beaten to those listings, then the agent’s network isn’t working in your favour.
Secondly, they can save you time. As most houses are staged, you may be distracted from areas that draw immediate concern (cracks in walls for example). A great agent can spot these and save you wasting your time.
They might also see a great find and swap details with the seller’s agent giving you a valuable advantage in the bidding process. Coming back to their network, they’ll know solicitors, home inspectors and mortgage brokers. They can help you navigate the other parts of the buying process with ease.
An agent should also guide you with price. They should have a good sense of the market to guide you when to place a low or higher offer; even your best and final offer. They can even provide tactics to help you close the deal if you get stuck with the seller at all.
Your relationship with your agent
As you embark on your house buying journey, you will likely spend alot of time with your agent. You need to feel comfortable with them: how they explain things; how confident they are; how responsive they are. If the relationship doesn’t feel right to you, then it’s best to find a new agent. Buying a house is the biggest financial commitment you’ll likely make. You want an agent that can support your goals and alleviate any stress where possible.