Great Agents and Bad Realtors
Picking the right real estate agent can save you a time and money
Real estate agents charge four to seven percent on every transaction they touch. This often amounts to tens of thousands of dollars. Furthermore, most consumers have no idea what real estate agents actually do for them. Typically agents sell themselves as marketers. When you are on the selling side, they present you an “aggressive marketing plan”. In contrast, when realtors work with buyers they tout their connections and understanding of the market. Surely market knowledge and marketing cannot be worth 7% of your home value, so what do realtors do to earn their commission?
Great Real Estate Agents
Great realtors can bring a lot to the table. First, they bring great connections and a drive to get the deal done. This is helpful on both sides of the transaction because there can be a surprisingly large amount of hiccups in a house sale. On the buying side, there can be mortgage troubles. On the other side of the ball, you really need to make sure there are no title issues, inspection issues, etc. On top of all that, both realtors must also help you negotiate a good price. If you can get a realtor to assist you in all of these areas, you can be sure that they have earned their 7%.
How to Deal with an Agent who isn't so Great
At the risk of offending the realtor community, my opinion is that 80% of realtors out there are not great. Additionally, 60% of them are downright bad. This would not be an issue if realtors simply charged you based on their level of competence and the services they provide. The major issue among realtors is the fact that everyone in certain areas tends to charge the same fee.
So how do you weed out the 90% of the realtors you don’t want? First, ask questions like:
- What their marketing plan is?
- How long they have been in the business and how many connections they have in the area?
- Them to talk to you about the recent real estate trends in the area?
Really interview them. This will help you automatically weed out the bottom 60% of realtors out there. Additionally, as you interview them, try to ask about your specific needs. If you plan on having children and are looking for a child friendly house, inquire if there are any locally available. If you might have trouble raising the 5% down payment, note that and ask if they have any mortgage brokerage connections.
Dont Forget to Negotiate the Commsion
Most buyers don’t know that commissions can be negotiated. Even the best agents will lower your commission if they feel like they can get an easy sell from your property. Before you do this, make sure that you will not be asking them to move mountains for you. If you think your transaction will be fast and simple, you should get a discount. Remember, even a 1% reduction could be several thousand dollars back into your pocket. Most importantly, buyers and sellers simply need to ask. Many times if you just ask you can get something back.
The key takeaway from this article is that a great realtor is worth the commission they command; however, most realtors are not great. It takes a lot of time and effort to find the realtor that is right for you, so be patient and interview every agent thoroughly. Once you find the agent that is right for you, discuss the commission and make sure you ask about discounts. Don’t be afraid to pay for a realtor that you think is great, and don’t be afraid to ask for a discount from a realtor that you think is not.
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