Everyone has a friend in real estate. But is it a good idea to pick your agent based solely on a friendship? I’d say NO! You need an agent that specializes in the area and home type you want. It’s a huge purchase and they’ll be guiding you through the process so they really need to know their stuff. I see people picking their agent for the wrong reason all the time. Here are some of the common ways that people pick their agent, all of which are mistakes.
Your good friend. Ok, you can use your friend but don’t use your friend just because they are your friend. If they happen to be the specialist in the area you want and you are comfortable with them then it’s ok but don’t use them solely because they are your friend and they have a real estate license. That is not enough. If they don’t do a great job for you it could hurt you financially and be the end of the friendship.
Your cousin who just got his real estate license. How long someone has been in real estate is not necessarily an indication of how good they are at their job (there are plenty of experienced agents who are terrible!) but I do think we naturally learn as we go in real estate. So do you want to have your agent learning the ropes on your transaction when it’s one of the biggest purchases you’ll ever make?
The listing agent on the home you want to buy. The agent selling the home you want says they can help you buy it! Great, right? Terrible idea. They already represent the seller so why would they be watching out for your interests? At best they become a neutral agent serving both parties (called a “Transaction Broker”) which doesn’t help you much and at worst they continue to serve the seller and treat you as a “Customer” which means they don’t have your interests at heart at all. Get an agent on your side, don’t use the other party’s agent. That’s like asking the attorney for the person suing you if they can give you a hand.
The first agent you meet. Don’t just meet a broker at an open house, talk to him for 5 minutes and decide he’s a nice guy you’d like to work with. Research the area you want online and see who comes up consistently as an active agent in the area. Do they have good reviews? Then meet with him or her, ask the 10 questions we listed above and see how you feel about them. This agent is going to have a large impact on your investment so take your time on this step.
Yourself. Why don’t we just not have an agent and then the seller can give us a lower price on the home because they don’t have to pay two agents? This plan sounds good on paper till you get going. Real estate is not rocket science but you don’t do it every day, why would you know how to do it? It would be like me coming to your job one day and saying “no problem, I can do this” without any training or experience. Listing agents selling the homes do not want to work with buyers that don’t have agents. They would strongly prefer to work with buyers who have agents and know what they are doing based on experience. Especially in a strong market with more buyers than sellers, going at it alone is a bad idea.
Figure out the area you want, find a specialist in that area and you’ll be ahead of the crowd!