With roughly 2 million active real estate licensees in the United States, everyone knows a real estate agent — or two, or three. But, selecting your neighbor’s cousin who sells real estate part time or your brother’s buddy from college who just got their license might not be the best option if you’re looking to buy or sell a home.
Picking the right real estate agent can be the most crucial part of the real estate process. Yet, seven out of every ten homebuyers only interview one real estate agent during their home search.
For most, your home is your biggest investment. You’ll turn to your real estate agent for guidance on pricing, for marketing savvy, for communication and negotiation skills. The selection of an agent can make or break your transaction. Doesn’t it make sense to spend some time getting recommendations, studying their historical sales performance, and interviewing potential candidates?
Whether you’re in the beginning stages of your real estate journey or need to get moving quickly, here are 6 must-consider tips on how to pick a real estate agent:
1. Don’t let the agent simply tell you what you want to hear
It’s easy to pick the agent that tells you they can sell your home for the highest price – but how realistic is that?
Homeowners, on average, overestimate the value of their homes by about 8%. While it might hurt to hear your home isn’t worth what you expected, mispricing a home in the initial listing is costly to the seller in both time and money. In fact, homes with large percentage changes in the list price take longer to sell and ultimately sell at lower prices.
Look for agents who aren’t just telling you what you want to hear, but who are basing their pricing opinion on market statistics they’ve gleaned from their experience —and who can back that up with comparable data.
2. Pick a real estate agent that’s comfortable communicating on your terms
The number one complaint against agents who are representing home sellers is their lack of communication skills. Yet communication is vital to working with your real estate agent and the entire real estate process —from understanding your needs to negotiating on your behalf.
As you interview prospective agents, consider how quickly and effectively they’re communicating with you. Also think about how you like to communicate. Via text, email, phone, face-to-face? Are they willing (or experienced enough) to communicate via your preferred platform?
3. Dig into their online presence
Google the agents you’re considering. Are they easy to find? What do their websites look like? Can you find their current listings online? Are the listing photos high quality? What websites will your home be featured on?
An agent’s online presence can speak volumes about how your home will be marketed online. And, with 42% of homebuyers starting their search by looking for properties on the web, it’s imperative.
4. Make sure they have a strong support system
There are so many pieces to the real estate puzzle —from financing to home inspections, closing attorneys to general contractors. Selecting a real estate agent with a Rolodex of professional contacts can be a great asset to you throughout the process.
Difficulty obtaining mortgage financing, for example, is cited by agents as the top hurdle limiting potential clients for the past four years. Whether buying or selling, it only makes sense to work with an agent who has professional relationships with local mortgage companies who can help you reach your goals and who can keep deals moving forward.
It’s a nice comfort to know your agent can be a source for recommendations —whether you need a handyman, closing attorney, or mortgage broker.
5. Quiz them on your local housing market
Another very important criteria is your agent’s ability to understand the market inside and out. As you’re interviewing, ask questions about your neighborhood. What is the market like? How quickly are homes here selling? What is the current average sales price? What homes are my competition? Are there a lot of buyers interested in this area?
The agent’s ability to answer these questions will help you gauge whether or not the agent is up-to-speed on your neighborhood and can successfully market and sell your home. They should leave you feeling confident in their answers.
6. Be absolutely certain they can back up their claims with real sales data
There’s nothing more telling as to how an agent will perform than their historical sales data. Past performance is a key indicator for whether or not an agent is a good match for your locale and property type.
Here are a few stats to consider when comparing real estate agents:
Number of Sales:
How many past sales have they had in your neighborhood and for your property type? If you’re selling a condo in the city, an agent that sells mostly suburban single-family homes may not be the best fit.
List vs. Sales Price:
Take a look at some of their recent transactions and compare the listing price to the price that the home actually sold for. This can give some indication of the agent’s ability to price a home accurately, as well as their negotiation skills.
Days on Market:
This number indicates how long a property was on the market before it sold. A lower number is better, as this shows how quickly an agent sells their listings.
How does the agent compare in sales volume with their peers? This can give some insight into their transactional experience – not just their tenure.
Average Sales Price:
This is the average price of the homes they’ve sold in the past. It can tell you whether or not the agent has experience (and comfort) in your home’s price range. This is particularly important with luxury listings.
Picking a real estate agent is no laughing matter. Before you sign on the dotted line with your brother’s buddy from college (and end up having to fire him midway through the process), take time to do your research and ask for recommendations, to explore their past sales history, and to interview enough agents that you feel comfortable you’re making an informed and knowledgeable decision. Your success and overall experience depends on it.