Home Buying 101: Step 5

Home Buying 101: A Step by Step Guide to Buying a Home.

Step 1 | Step 2 | Step 3 | Step 4 | Step 5 |

Step 5: Choose an Agent.

Before we get started on this subject it’s important to address a couple issues. First, it’s important to recognize that this article is being written by a real estate agent. A real estate agent who wants your business at that. Given this, it’s tough to count me as an objective source on the topic. Nonetheless, I will do my best to put myself in a Buyers shoes. After all, before I was a real estate agent I was a home buyer and I can remember the things that made me love the agent I worked with. Second, it’s important to note that this step could very easily be step one or step two in buying a home. It just depends on your personality. Some people like to have an Agent involved from start to finish. Other people like to wait till their ready to look at houses. Either way works great.

Now that that’s out of the way, let’s talk about what makes a great agent.

Nuances

  1. Find someone who knows the neighborhood where you’re looking. Most agents will help you buy or sell a home anywhere; however finding an Agent that knows the neighborhoods where you’re looking is a huge asset. A neighborhood expert will know nuances about the neighborhood that you might not be aware of. For instance, one block of a neighborhood might hold its value better than another block. A neighborhood expert may also know about future homes that will be coming on the market. Locality specializes in the Ballard, Fremont, Green Lake, Greenwood, Magnolia, Phinney Ridge, Queen Anne, and Wallingford neighborhoods of North Seattle.

  2. Find someone you like. You’ll end up spending a lot of time with your agent so it’s important to find someone you get along with.  This is easiest if you know your own personality. If you’re a high strung, take charge personality then you may want an agent who has a calm, educational demeanor. If you’re a very passive person you may want an agent that’s assertive and decisive.

  3. Find someone who knows their stuff. This may mean finding an Agent with lots of experience, but not necessarily. Sometimes Agents who have been around a long time are stuck in their ways and this isn’t good either. The key is finding someone who knows the neighborhood, knows how to negotiate, knows their contracts, and knows how to close a deal. Usually a 10-15 minute conversation with an Agent is enough to know if their a pro or a baloney artist.

  4. Find someone who will do the right thing. Since real estate is a high dollar commission driven business there’s a lot of temptations for Agents to take shortcuts or operate in the gray in order to make a buck. Finding someone who cares about your well being before a commission is key.  For instance, how will your Agent handle a situation where you’re interested in making an offer on their listing? Will they represent both parties or refer you to a different agent? Although there’s no perfect science for determining if an agent is ethical reading their reviews is a good start.Further-from-the-Truth

  5. Find someone who will charge you a reasonable commission. A lot of folks think that a Buyer’s Agent is free; however this couldn’t be further from the truth. It is true that a Buyer does not pay out of pocket for a Buyer’s Agent; however the money has to come from somewhere. In most transactions the Buyer’s Agent is paid by the Seller. This means that the Seller is factoring the Buyer’s Agent commission into the price of the house which inflates the price you’ll pay for the home. Most Buyer’s Agents are offered a 2.5% – 3% commission. On the average Seattle home this is $10,000 – $12,000.  At Locality we rebate 1/3rd of this commission back to you – saving you on average $4000. This money can be used toward closing costs, prepaids, or loan discount points.

  6. Find someone who is available. There are a lot of great agents who are a victim of their own success. They’ve done a great job in the past and now they have more clients than they can handle. It’s important to find an Agent who has the time and energy to take you on as a client. Since agents will almost never turn down business, it’s appropriate to ask “how many clients are you working with right now?” Most agents have the capacity to work with about 20 clients at a time without any help. If they have a team they may be able to work with more. In the end, you want an Agent who will pick up the phone, answer your emails, and be ready to show you homes quickly.

OK, so these are all the things that make a great agent but how do you find that Agent? That’s a great question and I don’t know that I have a perfect answer. Here are a few tips though:

  • Ask your family and friends. You can always count on your family and friends to give you the full unbiased scoop. If they highly recommend someone and they meet the criteria above then they’re probably a good bet.

  • Read Reviews. From wolf T-shirts to milk, just about everything has reviews these days. For the most part though real estate agents have been able to avoid being reviewed. There are a few spots out there though where you can read reviews. Redfin has probably done the best job at this, publishing reviews from every client. That being said, they only review Redfin Agent. Zillow also has Agent reviews, but there’s a dirty little secret about these – only clients that are asked to be reviewed by the Agent are able to submit a review. Finally, Yelp has some reviews on Agents as well.

  • Go Meet some Agents: I know it’s old fashioned, but it works. Find some Agents that work in the neighborhood where you want to purchase and give them a call. A five minute phone call might be worth a thousand online reviews. Better yet, visit some open houses in the neighborhood and talk with the Agents who are hosting. You just might find someone you click with.

Once you’ve found an Agent you like it’s important to define the relationship. Yes, just like you did when you were dating as a teenager. This means explicitly telling your Agent that you want to hire them as a Buyer’s Agent. By doing this your Agent will work harder for you because they know you’re going to stick with them. At this point some Agents may have you sign a Buyer’s Agency Agreement. Depending on how they’re written this can be a good thing or a bad thing. Read it over and make sure the agreement has your best interest in mind. After that, it’s time for the fun part – looking at houses!

Steps 6 through 10 coming soon! These include looking at homes, making an offer, winning multiple offers, inspection, and closing the deal. Stay tuned!