In a red-hot housing market like today’s, both buyers and sellers can benefit greatly from hiring the right real estate agent. Buyers and sellers who enter the housing market without a real estate agent often assume hiring a professional simply costs too much. In reality, sellers who choose to list FSBO and buyers who house hunt alone miss out on a valuable resource-rich in knowledge, skill, and experience. Not only are real estate agents skilled negotiators with lots of neighborhood knowledge. They also have access to the MLS and to listings that have not yet hit the market. Listing agents help home sellers price their properties in line with the local real estate market and recent comps. Seller’s agents also carefully craft a winning marketing strategy and weed out non-serious buyers. Buyer’s agents find homes within each prospective homeowner’s budget and respectfully explain the entire home-buying process. A buyer’s agent will also protect the home buyer from purchasing a property with unpermitted work or undisclosed issues. Whether you plan to sell or buy a house, hiring the right real estate agent can make all the difference. This explains why 90% of sellers and 87% of buyers who closed a real estate transaction in 2020 worked with a licensed agent. According to the 2021 NAR® Profile of Home Buyers and Sellers, three-quarters of those buyers would “use their agent again or recommend their agent to others.” Of the sellers surveyed by the National Association of Realtors, 90% would “definitely would use [the] same agent again.” If you plan to buy your dream home or sell your house this year, follow below to learn exactly how to find a real estate agent in 2022.
Who Are Real Estate Agents, and What Do They Do?
There are several types of real estate professionals who routinely assist home buyers and sellers. Throughout the course of a real estate transaction, buyers and sellers might interact with listing agents, buyer’s agents, real estate brokers, and/or realtors. Most agents will work with both sellers and buyers over the course of their careers, but some choose to focus solely on one or the other. Regardless of whom they represent, each of the real estate professionals mentioned above must be over the age of 18 and a US resident. They must also receive a license from their state’s Bureau or Department of Real Estate. We explain who each type of agent is and what they do in further detail below.
Listing agents are real estate agents or realtors who represent the seller throughout the home selling process. In her article “Listing Agents: What They Are And How They Differ From Buyer’s Agents” for Rocket Mortgage, Rachel Burris explains how listing agents help homeowners. Burris notes that listing agents “run comparative market analyses” to price homes competitively. They then list the property online through the MLS or Multiple Listing Service to ensure the home is visible to buyer’s agents and therefore to a large pool of potential buyers.
Often working alongside other agents in their brokerage, listing agents also put together marketing materials. Before and/or during this stage, a listing agent might also recommend a few updates or repairs to the seller that could boost the home’s perceived and real market value. Adding to the home’s curb appeal, painting interior walls and/or replacing appliances are all common upgrades. Staging is another responsibility your listing agent might take on.
Once the seller’s real estate agent has listed the property for sale on the MLS and launched an initial marketing campaign, he or she will “hold open houses and guide potential buyers around during showings and walk-throughs. ” Listing agents will receive bids from prospective buyers on the homeowners’ behalf — “evaluating and negotiating these offers to ensure their clients are getting the best price and terms.”
After the homeowner has accepted a prospective buyer’s offer, the listing agent will guide the seller through escrow. The listing agent will typically provide the buyer and their agent and/or mortgage broker with necessary disclosure statements and other property documents. In short, a listing agent supports the seller from before they list the property all the way through closing.
Buyer’s Agent or Selling Agent
A buyer’s agent represents the buyer’s interests, helping them find homes that match their budget, lifestyle, family size, and desired neighborhood. “Selling agent” is another term for a buyer’s agent, though this is less common. After combing through MLS listings, selling agents inform buyers about the condition, age, and other features of each property. Once a buyer has expressed interest in one or more properties, their agent will take them to open houses and/or schedule private showings.
If a buyer wishes to make an offer on a property, the selling agent will take their offer to that property’s listing agent. The buyer’s agent will then negotiate on behalf of the buyer without disclosing any private information to the seller. During negotiations, the selling agent will bring up any issues the buyer would like resolved before closing. In a buyer’s market, the seller might either fix these problems, lower the asking price, or agree to pay closing costs when pushed by the buyer’s agent to do so.
Real Estate Broker
All real estate agents must be sponsored by a real estate broker in order to legally practice. Troy Segal explains the role of real estate brokers in his article “The Differences Between a Real Estate Agent vs. a Broker vs. a Realtor” for Investopedia. Segal writes that real estate brokers are usually real estate agents who “continue their education and successfully receive a state real estate broker license.” A broker is the only type of real estate agent who can “work independently and hire other real estate agents” to join their firm. Not all brokers actively work as real estate agents. Some only supervise other agents in their real estate brokerage.
The role of a broker is very similar to that of any other real estate agent. Both work with buyers and sellers – either preparing CMA’s or sifting through listings on the MLS. When working with buyers, brokers will “conduct negotiations, prepare offers” and help buyers through escrow. Brokers who work with sellers will help their clients determine appropriate list prices, prepare marketing materials, show properties, manage offers and represent sellers through closing.
Three Types of Real Estate Brokers
According to Segal, there are three main types of brokers: the associate broker, the managing broker, and the principal broker. Associate brokers have obtained their broker’s license but continue to work under the principal broker of another firm in which they “do not supervise other agents.” Alternatively, a managing broker is not the head broker of a real estate group but he or she does “oversee transactions and daily operations in the office.”
This might include hiring and training new real estate agents. Lastly, a principal or designated broker represents his or her firm, partnership, or corporation. It is this broker who is responsible for making sure the firm is “in compliance with state and national real estate laws.”
Some use the terms “realtor” and “real estate agent” interchangeably, but it can be helpful to note the difference. “Realtor” is a special designation for real estate agents and brokers. Agents and brokers who receive this designation from the National Association of Realtors are typically held to higher standards than other agents.
Tips and Tricks for Finding the Best Realtor or Real Estate Agent
#1 Talk to a Mortgage Broker Before Meeting with Realtors or Real Estate Agents
If you are looking for a buyer’s agent, be sure to meet with a mortgage lender before interviewing realtors or real estate agents. Valerie Lai explains why in her article “5 Reasons to Talk to a Lender Before You Start House-Hunting” for NerdWallet. Lai explains that meeting with mortgage brokers before interviewing agents “helps you better understand which loans are available to you.”
At the same time, your lender should give you an estimate of closing costs you will owe during and after escrow. Buyers usually pay most closing costs – amounting to between 2 and 7% of the loan value. This way, you will have determined the proper budget for your new home. If your lender issues a preapproval letter, meeting with a mortgage broker could “also make you more attractive to sellers and real estate agents.”
#2 Consult Friends, Family and Colleagues Who Recently Sold or Bought a House in Your Area
Whether you are buying or selling, the recommendations of your friends, family members, and colleagues could be your best resource when choosing a real estate agent. According to the NAR resource “Quick Real Estate Statistics,” buyers and sellers frequently find their agents based on recommendations from family and friends. The NAR resource notes that “68% of sellers who used a real estate agent found their agents through a referral by friends or family” in 2020.
Before you hire a realtor or real estate agent, try to ask friends, family members, and colleagues who were in a similar situation to yours when they worked with a real estate agent. For example, ask a friend who recently bought her first house if you are a first-time homebuyer. If you are planning to sell a house in the suburbs, ask a family member who recently sold his house in a comparable neighborhood. After you have received a few recommendations, look up each realtor’s website. Check their background and accreditations while examining each agent’s online presence.
#3 Examine Each Real Estate Agent or Realtor’s Background and Accreditations
As you research potential agents recommended to you by family, friends, and colleagues, be sure to examine their backgrounds and accreditations. First, make sure that all are in fact licensed agents who can legally practice in your state. Never let an agent represent you if they are not properly licensed. Second, check that each is currently associated with a brokerage. You might also consider whether each agent is an exclusive buyer’s agent or an exclusive seller’s agent – meaning they represent only buyers or only sellers respectively. Next, consider special designations. There are a few designations to keep an eye out for.
Beth Braverman lists these in her article “How to find the best real estate agent in your area” for Bankrate. If you are buying or selling a house, Braverman suggests searching for a real estate agent who is also a Certified Residential Specialist or CRS. These agents have “completed additional training in handling residential real estate.” If you are buying a house, consider working with an ABR. As mentioned above, Accredited Buyer’s Representatives have also “completed additional training,” though theirs focused on “representing buyers in transactions.”
Lastly, you might consider hiring an SRES or Seniors Real Estate Specialist. If you are 50+ years old and are planning to either buy or sell a home, an SRES might be the best agent for you. SRES has received special training “aimed at helping buyers and sellers aged 50 and older” navigate the housing market.
#4 Assess Each Real Estate Agent or Realtor’s Local and Regional Market Knowledge
Before you interview real estate agents or realtors, assess each agent’s local market knowledge. It is often preferable to hire a local agent who understands the unique circumstances of your particular neighborhood. Both buyers and sellers would argue that a good real estate agent has worked extensively in their client’s neighborhood. A real estate agent who has recently helped homeowners in your neighborhood will probably have an easier time pricing your house to sell.
If they have recently worked with buyers in your preferred neighborhood, they might be able to offer insight into the community and local market. In her article “Tips for Buying a Home in a Hot Real Estate Market” for The Balance, Carissa Rawson explains. Rawson writes that real estate agents have “a finger on the pulse” of local markets, so they might be able to “show you properties you wouldn’t otherwise find.”
Perhaps even better, local real estate agents have relationships with other local real estate agents. Quoting California real estate agent Jason Zaitz, Rawson notes that “‘the highest-rated agents typically have great relationships with listing agents in the area.’” According to Zaitz, “‘this can be the difference between you getting your offer accepted when you’re competing against 20+ other buyers.’”
Keep in mind that real estate agents are prohibited by the Fair Housing Act from discussing certain stats with buyers. They cannot report on crime statistics, demographics, or any other characteristics that could result in discrimination against a certain community.
#5 Check Each Real Estate Agent or Realtor’s Track Record
In addition to credentials and market knowledge, you will also want to check the track record of even an experienced agent. Ilona Bray, J.D. explains why in her article “How to Interview a Prospective Agent to Sell Your Home” for NOLO. Bray recommends buyers and sellers “look someone who has at least three years experience selling residential real estate.”
They should also have “a track record selling homes like yours—both in terms of geographic area and type of property” if you are a homeowner. As a seller, you would not look for an agent “who has sold lots of new homes in a planned unit development” if you are hoping to sell “your 50-year-old suburban ranch house.” If you are a buyer, they should have a history of matching buyers with homes in your budget and of your style.
#6 Ask Each Agent if They Represent Buyers, Sellers or Both
Though increasingly rare, some agents and brokers will represent both the buyer and the seller in a real estate transaction. Real estate agents who do this are referred to as “dual agents.” Acting as a dual agent is legal in some states and illegal in others. For example, acting as a dual agent is legal in California.
The NOLO guide “Pros And Cons Of Using a Dual Agent to Help Buy a California Home” elaborates. According to NOLO, a broker or real estate agent “is permitted to act as a dual agent in California only if the buyer and seller are both aware of and consent to the dual agency.” The agent’s role is made plain in a form they must fill out and sign called the “Disclosure Regarding Real Estate Agency Relationships.”
Conversely, acting as a dual agent in Florida is illegal. States like Florida that have made acting as a dual agent illegal often cite concerns over conflicts of interest and breach of fiduciary duty. Whether the dual agency is disclosed or undisclosed to the buyer does not matter in Florida. Dual agency is also illegal in Colorado, Kansas, Vermont, Maryland, Wyoming, Alaska, and Texas.
On another note, be sure to ask each agent which homes they plan to show you if you are a prospective buyer. Some agents will bring you a list of homes pulled straight from the MLS while others will only show homes represented by their brokerage.
#7 Think About the Questions They Ask You
How each agent engages with you during your preliminary consultations is key. To this end, be sure to think about the questions the agents ask you throughout the course of each interview. As a seller, your listing agent should ask copious questions about the property – including the history of ownership and any recent repairs. If you are a buyer, the agent should ask about your budget, your needs, your wants, your lifestyle, and even your finances.
In her article “How to Choose a Buyer’s Real Estate Agent” for SF Gate, Cat Reynolds explains. According to Reynolds, “any good buyer’s agent will want to know whether you have been preapproved by the bank and what kind of loan you are getting.” In addition, your buyer’s agent “should also ask what you’re looking for in a house.” All in all, “a good real estate agent is a good listener and asks questions [so] watch to see if the agent makes note of your needs.”
#8 Interview At Least Three Real Estate Agents or Realtors Before Signing
Those active in residential real estate often recommend interviewing at least three agents before signing an agreement. In their article “14 Tips For Choosing The Right Real Estate Agent For Your Property Search Or Sale” for Forbes, members of the Forbes Business Council agree. For example, Kevin Hawkins of WAV Group, Inc. says “‘it’s best to interview at least three agents before picking the one you work with.’” Try to avoid phone meetings and conversing solely via email if possible. Interviewing either in person or via video call is key to assessing each agent’s personality and approach.
#9 Look Closely At Your Contract
Under no circumstances should a buyer or seller sign a contract they do not understand. Did the selling agent present you with a Buyer’s Agency Agreement? Did your listing agent ask you to sign an Exclusive Agency Listing Contract before moving forward? Before you sign a legally binding document, ask the agent to explain each contract to you. Consult with a real estate attorney if necessary.
#10 Go With Your Instincts
Only you can determine who the best real estate agent is for your specific situation. The right agent for you might not be the right agent for others. Make sure your personality meshes well with that of each agent you interview. If you are having trouble deciding, try looking out for some of the “essential personality traits” more than a dozen Forbes Business Council members recommend each agent has in an article for Forbes.
These include traits related to the real estate agent or realtor’s character – such as “transparency,” “honesty,” “integrity” and “respectfulness.” They also include traits related to the agent’s understanding of the housing market – such as “technological mindset” and “education.” Lastly, real estate agents must imbue characteristics that aid in negotiations – e.g. “emotional intelligence,” “ability to listen” and “composure.”
How Important is it to Hire the Right Real Estate Agent?
Real estate agents each have a fiduciary responsibility to every client they represent. This means they must act in the interest of their client at all times – never acting solely to enrich themselves. As such, both buyers and sellers can rest easy as long as their agent is well-respected, properly licensed, and adequately experienced.
The right real estate agent will help you wade through the legal minefield that is buying and selling real estate. If you’re a seller, they will make sure you file all the appropriate documents like your disclosure form. And if you are a buyer, they will make sure you ask all the right questions and do not end up with a lemon of a house riddled with undisclosed issues.
Get the Most Appropriate Real Estate Agent or Realtor for You
By doing your research, trusting your instincts, and meeting with well-respected agents in your area, you will find a good agent to help you buy or sell your home. If you plan to buy or sell a home in Pensacola, Gulf Breeze, or Pensacola Beach, Florida this year, consider an agent from Levin Rinke Realty. Our team is rich with experience and local knowledge. Find the perfect agent for you and your family here.