42% of buyers find their agent through a referral.
We will talk about hiring an Agent as a generic term for hiring either a salesperson or a broker. In order to understand the role of the Agent, we must first understand what an effective Agent brings to the table. An Agent is your spokesperson during the transaction: they advise you, negotiate on your behalf and trouble shoot to ensure the deal closes. Choosing an effective Agent is critical to ensure a successful transaction.
An experienced Agent can easily be worth their 3% commission, but there are so many part time Agents who do not have the enough experience to navigate complications in closing.
At the moment there isn’t a good way to choose a broker, so we rely on referrals. Referrals aren’t a bad idea, but the real key is interviewing to ensure you know what you’re getting.
Here is a guide for what type of questions to ask your Agent.
If you are savvy in business, law or real estate, and you have time to spend on your real estate escrow process, it is not a bad idea to go with a discount broker such as RedFin. The key here is to know that for a lower commission you are taking on more risk and responsibility. A full service Agent should be bringing much more value, and therefore less risk.
Never Accept Boiler Plate
When selling your house, you will enter into a listing agreement (a contract) with your Agent. This contract is in place to ensure that if an Agent is spending time and resources marketing your home, when your home sells, they are entitled to their commission. This is the place for you to negotiate terms with your Agent.
Talk through who will pay for expenses: photography, fliers, staging, inspections or landscaping as examples. Consider a tiered commission structure, so your Agent makes more money the higher the house sells for. Interview several realtors and ask them all the same questions. Their answers, and even just their willingness to have the conversation will tell you all you need to know about what it will be like working with them and having them represent your best interests.