Monday, February 19, 2007

Real Estate Agent Selection Primer—How to Choose the BEST Realtor for YOU! (Part Two of Two)

The Twin Cities Fox News affiliate’s investigative team recently ran a new segment on mortgage and real estate fraud. A man was allegedly bilked out of nearly half a million dollars by a loan officer and real estate agent he met in a bar! The story is not a new one but what struck me was the “in a bar” statement. How many people are selecting their advisor on real estate over a beer in the local tavern? Let’s think about this a minute. One of the biggest, most important investments in a person’s life and they rely on an acquaintance in a bar? I hope they at least ordered some appetizers before they signed the contracts!

The average American will buy or sell a home only 2-3 times during their lifetime. It is imperative to have a logical process to select a real estate agent. Purchasing and selling a dwelling for your family is a very emotional situation. If you chose an agent wisely, you will be confident that your Realtor is on your side through the entire purchase and/or sale even when emotions are running high.

As a Realtor in Minnesota, I love assisting people to find the perfect home. My clients come from the referrals of past clients as well as open houses and other marketing avenues. When I meet a potential client, I expect questions about myself and my business. I answer additional questions about the Twin Cities metro real estate market and specifics about homes available. Not all of these potential clients ask relevant questions. They can already be caught up in the emotional buying process or a major life change. There is an easy step-by-step approach that can be used to find the best real estate agent for your family. In part one, I discussed how to prepare yourself mentally for meeting with potential real estate agents. (View part one of the article at http://www.mnrealestateupdate.blogspot.com/ ). Here is final step in my step-by-step approach to selecting the perfect Realtor for you.

Six questions to ask a potential agent

Do you have an introductory flyer or personal resume that you could send me prior to our meeting?The way an agent promotes him/herself will give you a good idea of their professionalism. If you receive high quality, well thought out marketing materials in the mail within the next day or two, the agent is on the ball. A well written, professional personal brochure should be part of a Realtor’s marketing materials. If you receive something of less quality or nothing at all, the agent might not be able to pay attention to detail throughout the transaction.

Do you work independently or as part of a team?

If you are part of a team, who will I be working with most often? If you prefer to have someone who can immediately answer the phone and track down an answer, you might like working with an agent that is part of a team. But it is important to understand how the team operates. Some teams will operate with the agents being interchangeable where you will have one agent showing you homes to buy, one agent handling listing your home, and another holding the open houses. Often teams will have unlicensed assistance handling the incoming phone calls.

If you want to work with the same person throughout the transaction, you may prefer an agent that works independently. Often when you call their office, the agent will pick up the phone. They handle all the details throughout the transaction and can answer your questions directly without waiting to contact another source.

Can you give me the names of past clients?

An experienced Realtor will have worked with any number of clients and will be able to provide you with a list of previous clients that you can contact as references. When talking with the references, it would be a good idea to ask if they had any problems during the transaction. If they did, ask how quickly and professionally they were resolved. Also ask how they met their agent. If the agent gives you only a list family members and best friends from high school as references, it may be concerning.

(For Buyers) Can You Help Me Understand My Financing Options?

If you are pre-approved for a mortgage but do not understand the financing paperwork after meeting with your loan officer, a good real estate agent should be able to peruse the documents to note any fees that do not seem correct. Sometimes a phone call by a Realtor to the loan officer on your behalf can resolve the issue. If not, most real estate agents have several good mortgage professionals that they have developed professional relationships with they can call upon. It could be in your best interest to visit with another loan officer to verify that all fees charged are necessary and that you are in the best type of loan program for your situation. Any real estate agent unable or unwilling to assist you in finding the tools to understanding your financing options might not be the best choice.

(For Sellers) What is your listings-to-sales ratio?
Some agents seem to have every house on the block or every house in a neighborhood listed. You see their signs in yards throughout the town. There ads are in your local newspaper and in your mailbox. This is may be an indication of a successful Realtor. But the big question is “Did the homes sell?” In this slower buyer’s market, there are many more homes on the market than buyers. Do you want an agent that can successfully get you to list your home or one who will actually get the home sold? If the agent is unsure of their ratio, you can figure it out for them. Ask how many homes they listed last year. Then ask how many listings they sold. (Make sure that the agent doesn’t include sales of homes where they represented the buyers.) Divide the listings sold by the total number of listings to get the ratio. If the ratio of listings-to-sales is less than 50%, you might want to select a different agent. Successful agents won’t sell every home they list, but their success ratio will be over 70%, even in a slow year.

(For Sellers) How will you market my home?
A comprehensive marketing plan should be prepared for your specific home prior to signing any contract. Good agents establish a marketing plan for each home they list. Your Realtor should provide you with a schedule of advertising and open houses. They should outline what publications and websites your home will be listed in and the timing for their inclusion. If there is going to be a sign in your yard, your agent should tell you whether their will be a brochure box with flyers for potential buyers driving by. Anything from the number of pictures in the MLS or whether there will be a virtual tour should be discussed and outlined.