November 4, 2015 by 1 Comment

Even though so much real estate information is now available on the Internet—or perhaps because of it—real estate professionals are in greater demand now than ever. Last year 88% of all home buyers purchased their home through a real estate agent or broker—a share that has actually increased from 69% in 2001,[1] when listings of homes for sale were first appearing on line.

Though in many ways the Internet has empowered consumers in recent years, but federal and state laws governing property sales and housing finance make the skills of a professional as important as ever.

The purchase or sale of a home is the largest and perhaps the most important transaction most people conduct in their lives, yet two thirds of buyers and sellers who hired an agent last year interviewed only one.[2]  40% of buyers found their agent through a referral from a friend or family member and 12% used an agent they had used before to buy or sell a home.[3]

While there’s nothing wrong with hiring someone referred by a friend or relative, it’s probably a good idea to do some serious homework for such an important decision. In fact, within the real estate profession, agent professionalism—or the lack of it—is a big issue today.

A recent National Association of Realtors report, known as the “DANGER” report, said the real estate industry is saddled with a “large number of part-time, untrained, unethical, and/or incompetent agents. This knowledge gap threatens the credibility of the industry.”

To help you avoid hiring an agent who fits that description, here are some tips.

Look for Qualifications.

As in other professions, some real estate agents bring qualifications and special skills that are important. “Realtor” is not a generic term for real estate agents. Realtors are licensed real estate agents or brokers who are members of the National Association of Realtors and have pledged to abide by its Code of Ethics.

Only about half the licensed agents in America are Realtors. Realtors have access to advanced training in special skills like representing buyers, representing sellers, marketing on the Internet, relocation, luxury properties, and more. The letters listed after a Realtor’s names indicate his or her certifications and designations. For more information see http://www.realtor.org/designations-and-certifications

Check out Rankings.

Several websites provide background information on real estate agents in your market, and even rank them by consumer feedback. Some of these sites provide helpful information on their locale, numbers of transactions, volume of sales, current listings, average sales price and more.

Online rankings of real estate professionals based upon consumer feedback are relatively new and not all agents participate. Some ranking sites are really online brokerages designed to attract business to their agents. Good sources are RealTrends, Zillow, Trulia and Realtor.com.

Check out Local Brokerages.

Drive around the area where you want to buy or sell and take down the names of agents or search a listings site like Realtor.com to find the names and brokerages most active in your area.

Go to their websites and check their credentials, listings and recent sales. Chances are that these are the agents most active and most current with local market conditions. Remember, however, that brokerage size is not a guarantee of excellence. Often smaller brokerages must go the extra mile for their customers to stay competitive.

Questions to Ask.

Here are some basic questions you will want to get answered.

For sellers: How do you price a property? Under what conditions would you suggest a price reduction? What distinguishes you as a marketer? What would you for a property that is getting no action? What is your commission and is it negotiable? What’s your policy on dual agency?

For buyers: Will you show properties that may not offer a buyer’s commission? If I buy a property with less than a 3% buyer’s commission, do you charge a fee? Do you specialize in representing buyers or sellers? What’s your policy on dual agency?

Due Diligence: Check for Disciplinary Actions.

Real estate agents are licensed by state real estate commissions. Many provide web sites where you can enter the name of an agent to find out if he or she has been the subject of any recent disciplinary actions.

Local Realtor boards and associations enforce the Realtor Code of Ethics. They do not publish the names of those who are disciplined, but it’s worth asking a prospective agent you might hire whether they’ve ever been the subject of an ethics complaint.

[1] National Association of Realtors, Profile of Home Buyers and Sellers, 2014

[2] Ibid

[3] Ibid

scook@reeconadvisors.com'

Steve Cook is managing editor of Real Estate Economy Watch, which was recognized as one of the two best real estate news sites of 2011 by the National Association of Real Estate Editors. Before he co-founded REEW in 2007, he was vice president of public affairs for the National Association of Realtors. In 2006 and 2007, he was named one of the 100 most influential people in real estate.


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1 Comment

  • timplyler@remax.net' Tim Plyler says:

    All these ideas have their merit, but there is no substitute for experience. There are a great many wannabe realtors out there right now, just as there always is when the market gets good. Some, are fine. Most are not capable of representing a buyer or seller in an ethical and non biased manner. When I have a cross sale with one, I usually end up doing my job, and hers… or his.

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