Agents can be a help — or a hindrance — in the buying and selling journey. Here are some things to know before you hire one.
Buying or selling a home is likely the biggest financial transaction you’ll ever complete. Real estate agents can guide you through the process, but hire the wrong one, and you could lose precious time and money.
As with any profession, there are top-notch real estate agents who do things by the book and lackluster ones who cut corners. To avoid a bad experience, you need to do some research and ask a lot of questions.
Learn these lessons now to help you make better decisions later.
1. They sometimes work for both sides
In some states, the same real estate agent can represent both the buyer and the seller in a transaction. It’s called dual agency, and while it may speed things up by allowing buyers and sellers to communicate with the same agent, it also can invite serious conflicts of interest. Think about it: Buyers and sellers rarely have the same goals for a deal, so how can one agent do what’s best for both?
When they disclose dual agency, as required by law, agents should carefully explain what you’ll forfeit by agreeing to it, says Richard Harty, an exclusive buyer’s agent and co-owner of Harty Realty Group in Highland Park, Illinois.
If you don’t ask and a dishonest agent doesn’t tell, you may unknowingly give up your agent’s undivided loyalty and the expectation that they’ll point out issues with the property or contract — both big reasons for buyers and sellers to each have their own agent in the first place.
2. They don’t know what your house is worth
Agents typically look at recent sales of similar homes and give you their opinion of your home’s value based on experience, but that alone shouldn’t decide your asking price.
A deceitful agent might exaggerate the value if they think it will convince the homeowner to sign a listing agreement, or understate it if they think it means a quick sale, says Doug Miller, a real estate attorney in the Minneapolis area and executive director of Consumer Advocates in American Real Estate, a national nonprofit organization.
A professional real estate appraiser can provide the most accurate estimate of home value. Although it may cost around $300 or $400, getting an appraisal before you put your house on the market can help you set a realistic price.
3. Their commission is negotiable
Listing agents may expect you to accept their commission — generally around 6% of the sale price — without question, but you certainly don’t have to. Although it may be uncomfortable, negotiating the commission rate is completely within your…