How to Vet a Real Estate Agent
Posted on June 26, 2017
Her name was Sybil, she was 78 years old, and played golf regularly. Sybil had two primary requirements for her future home: she wanted an active community where she could “age in place.” She also wanted that community to be located near a dear friend.
The type of community Sybil wanted is targeted to active 55+ buyers, and often includes a community center with a library, game room, outdoor swimming pool, tennis, 18-hole golf course, and walking paths.
Because new residents are active, such communities are also located a comfortable distance to the city core and large metro area employment centers.
Due to the changing needs of residents, there are also a variety of floor plans: single-family homes, attached townhomes, condos and apartments. They also include assisted living and a nursing home so residents can stay in familiar surroundings as they age and their needs increase.
When I began researching the 55+ communities, I found little available. I also I noticed that several properties sold the first day on the market. This was odd.
A home is not normally sold on the first day. Sure, offers may be made but in a fast-moving market, agents usually allow enough time for the home to reach the full, targeted market.
I also noticed the homes sold were all listed and sold by the same real estate company, and usually by the same agent. The agent had also represented both the buyer and the seller, which made me question whether the agent was operating with the seller’s best interest.
When a listing agent represents both the seller and the buyer, it is called “double ending the deal.” The agent receives commission for both sides of the transaction.
This isn’t necessarily bad. For instance, this works to the seller’s advantage if he/she wants limited showings and exposure, or is more interested in the quality of terms, such as time to stay in the house after closing to find the next home.
But sometimes the selling agent has a personal agenda. He/she wants to minimize the sales time, and maximize the commission, regardless of the seller’s needs. A “quick sale” becomes the priority rather than getting fair market value or attracting a better offer.
Such agents often bill themselves as “local agents” and “neighborhood specialists” who can use that expertise to sell a home. Part of their strategy also involves sharing the listing information with other agents only after such an agent has an interested buyer.
The question becomes, then: Is the agent operating with integrity?
When I stumbled upon this situation, I thought about my mother. She is 88 years old and worked hard most of her life and saved for her future. Like other elderly sellers, her last home sale was the most critical one, in part because it came when she had transitioned from earning to managing her money.
For any agent to take advantage of that demonstrates a lack of integrity. Sellers would be wise to do their own due diligence to ensure that doesn’t happen.
6 Questions To Ask When Vetting A Real Estate Agent
Question No. 1: How long have you been a licensed Realtor?
The average realtor stays in real estate for three years or less. While they may be excellent representing buyers, they may have limited experience negotiating sales transactions, experience that is tantamount when selling one of the largest assets in your life.
Question No. 2: Are you a full time agent or do you also do other work?
People with part-time jobs are often not as committed as full-time workers. This is as true in real estate as it is in other industries. Additionally, because full-time agents are “on the job” all the time, they are also usually more accessible.
Finally, because it can often be months (and sometimes years) between listing a house and completing the final paperwork, how can you be assured a part-time agent will still be engaged?
Question No. 3: How many properties do you sell annually, and of those, and what percent of them involve you representing both the buyer and seller?
People like to shop at Nordstrom’s because of the excellent customer service. That same philosophy applies to real estate.
Agents who manage 20-36 transactions a year are not only experienced. They also have time to provide the level of service sellers need throughout the sales process.
Conversely, agents who sell 50-100+ properties a year are managing teams of people. You may meet with them initially, but not again until the sales process concludes.
By knowing the number of annual sales, you know the level of personal customer service you can expect.
Question No. 4: What is the current appreciation rate in our neighborhood?
By knowing the appreciation rate, you can assess your property’s value more accurately. A good agent knows this.
An experienced agent can tell you that. Even in a city the size of Portland, some neighborhoods appreciate more quickly than others.
And the difference can be significant—as much as 8-10% more in appreciation—despite what the local papers may say.
Question No. 5: How long should I expect my house to be on the market?
Homes can be on the market for varied timeframes, depending on price point and your neighborhood’s housing demand.
Discussing this subject with a prospective agent will enable you to gain a sense of what you can expect in price point and timeline. More importantly, it will let you know if the agent knows the market and your home’s position in it.
Question No. 6: What can I expect the sales process to look like?
Experienced agents will walk you through the real estate process, step by step. If they don’t, or if they miss some of the steps, this may be a red flag.
Stages of a real estate sale:
- Prepare the house to be on the market
- List the property so prospective buyers and their agents can view it
- Receive and review offers
- Negotiate any repairs
- Provide data to assist the appraisal process
- Work with the title company to identify and clear any clouds on the current title
- Track the contract timelines to make sure all details are met.
In addition to the above, there may also be some variables, such as a financing contingent. The buyer may have to sell a house before buying yours, or a cash offer may need to be negotiated.
To protect our clients’ privacy, anecdotes shared are based on true stories; however, names and specifics have been changed and/or combined into composites.