5 Big Questions For First Time Home Buyers #3: How Do I Find A Good Agent?

As I begin the process of locating and buying my first home, my mind is loaded with questions. This week, I’m answering the five biggest ones (for me, at least) in detail. Other questions involve a home buying gameplan, true home ownership costs, hiring a home inspector, and closing costs.

Up to this point, my wife and I have been lucky to have a very close friend who is a real estate agent who has been giving us abundant advice on how to buy a home. However, she still recommends that we have a local real estate agent (and she unfortunately doesn’t have a recommendation).

So, I spent some time doing some research into finding a good real estate agent from a buyer’s perspective and I’ve come up with the following plan for locating an agent that will treat you right. Remember, the seller will pay for the agent’s fee, so the cost for you for any agent will almost always be zero; cost isn’t really a consideration for you.

Finding the Right Real Estate Agent for You

1. Investigate at least three agents locally.

Even if the first agent seems like the answer to your prayers, don’t just jump in with them. Check them out in detail and also investigate other agents. You should always be up front that you’re shopping for an agent; don’t ever imply that you’re already committed to using a particular agent, whether it’s the agent you’re talking to or another agent.

2. Ask around for some referrals and recommendations.

Ask your friends, coworkers, and employers about their buying agents. You might also want to visit a number of Sunday open houses to meet agents without any commitment and see whether they give you a good or a bad vibe (I’ve experienced both).

3. Once you’ve decided on a few agents, schedule interviews with each one and request that they bring an activity list.

An activity list is a document that lists every property sale they’ve been involved in in the last twelve months. It should include each property address, the type of property (home, condo, etc.), the sale price, the date, which side the agent represented, and contact information for the people they represented. If they won’t provide this, something really fishy is going on and you should back away slowly.

What about that interview? Basically, you’re trying to discern if you can work well with the person as well as some basic information about their professional experience.

Here are ten questions you should ask during the interview:

  1. Are you a full time agent? The answer should almost always be yes unless you live in a very rural area.
  2. How long have you been an agent? Longer isn’t necessarily better, but this knowledge can be used alongside the activity list to get an idea of whether they’re experienced in a good way.
  3. What can you tell me about your agency? They should be able to tell you about their local size and perhaps their national size as well.
  4. Which side do you represent? A buyer-only agent is rare, but is fantastic if you can find one. Most agents are dual agents and would obviously prefer to hook you up with one of their own properties.
  5. What do you think of the local home market? This is a great question to judge honesty. If they peel off a rehearsed positive answer when there are a ton of houses out there unsold, this person is feeding you a line.
  6. Do you have a salesperson license or a broker license? A broker license is usually a sign of a go-getter. If they don’t have one, it’s not really a red flag, though.
  7. What do you think of these agents? Ask for their opinion on the other agents you’re interviewing. The reviews of other agents should be generally positive unless there’s a consistent problem – and if there is such a problem, multiple agents should comment on it. Before they answer, though, you should pledge that you won’t repeat what they say.
  8. How many people do you currently represent? If an agent is representing ten buyers and eight sellers, they might be too busy to really represent you well. On the other hand, if they’re twitchy and they say “uh… no one,” that’s kind of bad, too. Look for someone who has some business, but not too much business.
  9. What is your understanding of my home-buying needs? The agent should have already asked you about this before the interview (usually on first contact). If you’ve told them what you need and then they act clueless or get the facts wrong, that’s a serious issue.
  10. Is there anything I haven’t asked about you or your firm that you’d like me to know? Give them the opportunity to give you any extra information, especially in terms of upcoming vacations for the agent and so forth.

This interview might take an hour or more, but it’s worth it: a good buying agent can really be an asset when you’re locating a house and also when you’re moving through the buying process.

Tomorrow, we’ll look at finding a good home inspector.

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  1. Pete D says:

    A buyer’s agent can be very useful if you’re a first-time buyer — a lot of hand-holding, taking you through the process, making sure you don’t muck up something big.

    Otherwise a buyer’s agent is a waste of money, given the amount of info available to anyone these days.

    As a financial expert, you ought to know that it’s misleading to think that “the seller will pay for the agent’s fee, so the cost for you for any agent will almost always be zero; cost isn’t really a consideration for you.”

    The cost is hidden, but it’s still there.

  2. Rich says:

    Pete,

    That’s one of the great things about Trent…he doesn’t pretend to be a financial expert. He’s stated very clearly several times that he’s not.

    I’m not disagreeing with you, I’m genuinely interested in how the costs are hidden. Can you elaborate or give an example.

    Thanks Pete…

    Rich

  3. Trent Hamm Trent says:

    Pete’s right, the cost of the agent does still exist. By saying that the seller pays for the agent’s fee, what I mean is that the buyer’s agent gets a cut out of the overall commission on the sale of the house. As a buyer, your agent DOES get money for placing you in a home and indirectly you are paying for it when you buy the house, as the agent’s commission is considered when the house’s asking price is set.

    My point is that as a buyer, this cost is largely out of your hands, so in terms of having to worry about the commission when you’re trying to find any hidden costs that might sneak up on you, it’s not a major concern.

  4. Trent Hamm Trent says:

    You’re right, Rich; I write this blog not just to enlighten and entertain others – I’m researching and learning this stuff as I go along, too. It helps me keep my eye on the ball.

  5. Katie B. says:

    Something I would recommend, even to first time buyers who are willing to do their research is using a service like Redfin in which you do the legwork, find the house, and then have Redfin take over for the offer, negotiations, etc. You receive two/thirds of the buyer’s agent commission back. I truly believe the realtor commission model needs to change per the Freakanomics argument. The market is starting to demand it’s change.

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