Friday, November 3, 2006

Adventures in First-Time Homebuying #6: The Hunt for a Real Estate Agent, Part 3

Author: Nick
Category: Money

make sure your agent is experienced at buying small, green, plastic houses

So you know what a real estate agent is and you know how to find them. Now it’s time to narrow down the selection and come up with Your Dream Agent. And the easiest way to do that? A fight to the death in a steel cage match!

Or you can ask your potential agents these questions.

Ask A Real Estate Agent These Questions Before Hiring

  • How long have you been licensed? This question serves two purposes: to weed out the newbie agents and to ensure the agent still has a current license.
  • Is this your full-time job? Avoid part-time agents. You want someone whose full-time commitment is to the real estate business, not some other job.
  • How well do you know my area of interest? An agent experienced with the New York City area won’t do you much good if you’re looking to buy in Topeka, Kansas. Make sure your potential agent knows the area you’re interested in well and has prior experience buying or selling in that area.
  • Can I have your home phone number? E-mail? Call evenings/weekends? Stalk you at your child’s little league games? A good agent should be available to you anytime. While you should save the 3am panicked phone calls until you’re near closing, you need to know you can get in touch with your agent quickly.
  • How many clients are you serving right now? On the one hand, an agent with a light work load might not be great at his or her job. On the other hand, an agent with too many buyers or sellers may not give you the attention you deserve. On the third hand, the proper answer to this question also depends on current market conditions. Try to find an agent with a solid–but not too heavy–list of current clients.
  • What is your average home price? If this agent usually buys or sells million-dollar homes and you’re only looking to spend $150,000, the agent may not give you his or her best effort since his or her commission depends on the sale price of the home. Similarly, agents whose typical purchase price is well below yours may not have enough experience in your price range to serve you well.
  • Will you be present at closing? Don’t let your agent send an assistant in his or her place to closing. You want your agent’s butt in that chair next to yours or no deal.
  • Will you give me three recent references? Of course the agent will refer you to the most satisfied past clients, but you want to make sure those clients are for recent sales (in the last year) and that there are at least three satisfied clients in the first place!
  • Why should I hire you and not another agent? This is a bit of a fluff question, but if gives your agent a chance to demonstrate his or her negotiation skills on you.

What to Expect Next

So you’ve done your interviewing and you’ve finally hired an agent to help you find and buy your home. Congratulations! Here’s a quick rundown of what’ll happen next.

  1. You’ll fill out some papers. Even before you find a house, you’ll have to sign a contract with your agent. These are pretty standard, but make sure you understand what you sign. In short, the contract will say that the agent is your agent and has legal obligations to serve and protect your interests, and if you buy a home in the next X days (even on your own!) that the agent gets the buyer’s commission. You’ll also likely sign a dual agency agreement in case you want to buy a home that the agent or his or her broker is also selling.
  2. You’ll look for a house. We’ll cover this in about 762 parts later in this series.
  3. You’ll find a property and make an offer. You and your agent will review all sorts of documents and disclosures for any property on which you intend to make an offer. Your agent will help you come up with a good offer price given the condition and features of the property and surrounding area. The agent will handle negotiations with the seller’s agent, and hopefully you’ll get the home of your choice at a price to your liking. Again, we’ll cover this whole process a lot more later.
  4. Your loan officer and real estate agent will chat. Assuming you already have a pre-approval, and after you’ve committed to a particular lender, your lender and agent will talk back and forth to handle some monetary logistics.
  5. Lots of other stuff will happen. Inspections, titles, form after form after form! There’s a whole bunch of things that happen between offer acceptance and closing, but your agent will help you get through all of them, and so will I in future episodes!
  6. You close, and your agent gets paid. Money and homes change hands, more forms get signed, and your agent gets his or her paycheck.

Stay tuned for one last part in The Hunt for a Real Estate Agent which covers advanced topics like using online real estate agent services and how you can get a chunk of your agent’s hefty commission just like I did.

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