How to Choose the Right Real-Estate Agent

The right real-estate agent can make the difference between a frustrating real-estate transaction and a happy, profitable one.

May 25, 2014 at 12:00PM

Whether you're buying or selling real estate, one of the first things you'll do is find a good real-estate agent. You may know more than one person in your circle of friends and family who sells real estate, and the temptation is often to use the agent you already know. That can be a mistake.

A real-estate agent is not just a person who carts you around when you're shopping for a home or lists your house with the Multiple Listing Service and sticks a sign in the front yard. Real-estate agents can do a number of things right to help you sell or buy a home and get the best deal possible. Any mistakes they make -- even simply forgetting to tell you something -- can cause you frustration and possibly financial loss.

Buying or selling a piece of real estate may be one of the largest financial transactions you ever make. Choose the agent who will help you through this process with care. Here are some things you should know before choosing a real-estate agent.

If you're buying, you need your own agent
Never have the listing agent show you a property. If you do, he or she can reasonably expect to represent you. You need an agent who can represent your best interests and negotiate the best price with the seller. The agent should tell you if other properties might be of interest to you, or if there's a potential problem with the property. Don't expect sellers agents to work for you. They don't.

As a buyer, you're not stuck with the first agent you talk to
In a typical scenario, a person sees a property for sale or goes to an open house. Chances are, the person doesn't buy that house. That doesn't surprise or faze the real-estate agent -- she has other properties to show you, if only you'll give her your name, email address, and two phone numbers.

Regardless of how nice the agent seems, you don't know anything about her. You don't know if she's had her license for 20 years or 20 days. You won't find out until later whether she works full-time or is only available Tuesday and Thursday afternoons and takes her sweet time returning phone calls.

If you haven't signed a buyer's broker agreement, you're still free to find another agent. Even if an agent takes you house shopping, you have no obligation to buy a house from him, especially if you're starting to wonder about his expertise or honesty. He shows houses every day to people, a good percentage of whom never close the deal.

On the other hand, don't use half a dozen different agents and take up their time if you don't intend to use them to complete the sale. They need to make a living, too.

No single agent is best for everyone
Some agents specialize in starter homes and low-end rentals. Others deal with waterfront, commercial, or high-end properties. Whether you're buying or selling, choose the agent with experience in your type of property.

You also need an agent you can communicate with and who is available when you need him or her. Don't sign up with an agent who doesn't work weekends if that's the only time you're available.

Connections matter in this business
Even in the age of the Internet, personal connections still matter. Properties are promoted, bought, and sold every day because someone knew someone who might want to buy or sell, or knew how to find someone who did. This is especially true in certain markets. You need an agent who has been working in the area long enough to know people and markets.

Agents' experience and education vary widely
Real-estate sales is still a relatively easy-entry career. That doesn't mean it's an easy place to make a living. However, compared to professionals whose careers require years of preparation or a college degree, prospective real-estate agents can take a course, pass a test, and start listing and showing houses in a relatively short period of time.

In addition, the turnover rate in real-estate sales is high. Approximately 90% of real-estate agents drop out within 24 months.

The most professional agents keep learning and improving their skills. They take real-estate seriously, and they don't consider it a part-time "filler" job or one they can do until a "real" job comes along. They may have advanced certifications or a broker's license, and they can tell you what areas they specialize in and how long they have been in business.

Don't just think of experience in terms of years. Look for an agent with a track record of closing sales.

Agents in today's market must be tech-savvy, or else. If you're selling, your agent must be able to make your home look good in photographs. The agent's website should look good and be easy to use. If you're buying, your agent should be a whiz at searching for properties online and creating alerts for new deals on the market.

Think twice before using a relative or friend as your agent
Real-estate transactions don't always go as planned. There can be misunderstandings, delays, and nasty surprises. You see a different side of people when you go through the fires of a difficult real-estate sale with them.

You also expose much of your personal information to a real-estate agent. They see you at your finest -- or your worst -- when the deal almost falls through. In addition, they'll probably find out how much you make and what your credit score is.

If you still want your brother-in-law to be your agent, fine. If you'd like to keep your business and personal life separate, however, consider using someone else. There's too much at stake when you buy or sell real estate to use anyone but the most experienced and professional real-estate agent you can find.

Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend-paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information