Homebuyers’ guide: How to choose a real estate agent

In a challenging housing market like today’s, where high home prices and mortgage rates can restrict your buying options significantly, having a knowledgeable local real estate agent by your side really makes a difference. When you’re ready to buy a home, follow this five-step guide to choosing the right agent for you and your specific needs.

1. Get preapproved for a mortgage

What does this have to do with finding a real estate agent? Well, it’s smart to meet with a lender first, before you talk to prospective agents, to learn how much you can afford to spend on a home.

Getting preapproved educates you on the maximum amount you are likely to be able to borrow. This helps you understand which homes are in the right price range for you, so you can choose an agent whose knowledge and experience align with your parameters. That way, your agent can work within your budget and you don’t waste time on listings that are beyond your means. In addition, a preapproval shows both agents and sellers that you’re a serious, qualified buyer.

2. Ask friends and family for referrals

There are a lot of real estate agents out there. One way to find a great one is to ask people in your network if they can recommend someone with whom they’ve had a good experience. If someone you trust liked a particular agent, chances are you will, too.

Ideally, you want someone who has experience with clients in circumstances similar to yours. For example, the needs of first-time homebuyers are different from those of repeat buyers or retirees looking to downsize. And a downtown-condo specialist will have a different type of knowledge than an agent whose expertise lies in suburban single-family homes.

Some agents have certifications through the National Association of Realtors to show that they’ve completed additional training in a certain area of expertise. Designations homebuyers might look for include:

• CRS (Certified Residential Specialist): Completed additional training in handling residential real estate
• ABR (Accredited Buyer’s Representative): Completed additional training in representing buyers in transactions
• SRES (Seniors Real Estate Specialist): Completed additional training aimed at helping clients aged 50 and older
• RENE (Real Estate Negotiation Expert): Completed additional training in negotiating skills and advocating for their client

3. Research and interview potential candidates

When you’re considering candidates, start by examining their online presence: Check their website and social media accounts, noting whether they have closed deals in your area. The more familiar an agent is with the location you’re hoping to buy in, the better — real estate is very localized, and you want someone who’s extremely plugged-in to the market in your specific area.

Take a look at their online reviews, as well. You can also vet candidates on your local Better Business Bureau’s website to see if they’ve received any complaints.

An interview is your opportunity to get a more personal sense of an agent and see whether you click with them. Look for someone who not only knows your area but also understands your budget and needs. It’s a good idea to ask the typical price range and neighborhoods of homes they help their buyers find. If you’re a first-time buyer, inquire about their experience helping others who fall into this category. The same applies to more unique scenarios, like out-of-state relocations.

Interviews also give you a chance to find out the agent’s preferred method of communication and their availability. For example, if you’re most comfortable texting and expect to visit homes after work hours during the week, you’ll want an agent who’s happy to do the same.

Finally, ask the agents you’re interviewing to provide contact information for a few recent clients, so you can check their references. Reach out to those clients to find out their experiences and what type of support the agent provided throughout the process. Ask whether they’d hire that agent again for their next real estate transaction.

4. Discuss commissions and sign a contract

Whether they represent the buyer or seller in a transaction, real estate agents earn a commission on the deal. The commission will be a percentage of the home’s final sale price; rates typically fall somewhere between 2.5% and 3%.

But commission rates are negotiable, and the amount will vary depending on the deal. In addition, the buyer may or may not be responsible for paying their own agent — sometimes, the seller covers the cost of both agent commissions. Make sure you understand how much an agent will be paid, and by whom, before you agree to work with them.

Once you select an agent, you’ll need to sign a contract. The contract should spell out all the terms to which you’ve agreed, including the commission rate. Another factor to look at: the contract’s duration. Aim for a contract limited to a time frame of six months or less, if possible — if you haven’t found the home you want within a few months, it’s helpful to keep your options open.

5. Trust your instinct

Above all, go with an agent you like, trust and will feel comfortable with if the road to closing gets a little bumpy. If you get a bad vibe from someone during your initial conversations, that’s unlikely to change when you start working together.

“It’s like dating — sometimes it just comes down to chemistry,” says Herman Chan, an associate broker and Realtor with Golden Gate Sotheby’s International in Berkeley, California. “If everything checks out, but you just don’t vibe with that person, don’t go with them. There are plenty of other real estate agents out there that will be happy to help you and might be a better personality fit.”

FAQs

• What percentage do most agents take?

  The typical commission on a real estate transaction is somewhere between 2.5% and 3% of the home’s sale price, for each agent involved in the sale. So, if the home sells for $350,000, the buyer’s agent and the listing agent would each receive between $8,750 and $10,500. The rate can vary based on any number of factors, including location. These amounts are often negotiable, and you’ll negotiate the rate — and who pays whom — with your agent before you commit to working with them.

• Can I buy a home without a real estate agent?

  Yes. Homebuyers are not legally obligated to hire an agent to guide them through the process. However, it’s typically in your best interest to do so: Agents are licensed professionals who know their market inside-out and can provide crucial assistance in both finding a home and negotiating a deal. This includes submitting offers, reviewing contracts, filing paperwork, coordinating the closing and more. Plus, they know how to smooth the path if you encounter any hiccups along the way.