Your home is likely your biggest investment – don’t go it alone
When should you sell your house? Are we at the top of a real estate bubble about to burst or will real estate prices continue rising? (The National Association of Realtors reported that the average price of a single-family home has increased every month for more than 100 months.) Should you hold onto your house for a few more years of appreciation because your home is your biggest investment?
Selling or buying a home can come with a lot of confusion. If you did one single thing that is most likely to get you the most money for your house when selling – or get you the most house for your money when buying – it might be this: hire a real estate agent.
In today’s red-hot market you might be able to go it alone, but a qualified real estate agent can help you avoid a lot of unnecessary headaches.
If you’re in the market for a real estate agent, ask these questions to find the best fit.
What’s your experience? Know how long your agent has been in business, whether this is a full- or part-time job and if this professional specializes in your neighborhood or part of town (depending on the size of the area you live in). Ask the average length of time this agent’s homes sit on the market, the homes’ list-price-to-selling-price ratio and types of property the agent worked with.
How will you keep me updated? Any successful relationship depends on communication. Understand the frequency and form of updates you’ll receive. Indicate the level of information you expect in terms of buyer interest, new property listings, open house feedback and more.
What are my home’s drawbacks? Your agent must give you honest feedback to set appropriate expectations for the home buying or selling process. If you’re selling, your agent needs to help you identify any issues affecting the value of your home.
What’s your strategy? Whether your agent uses a for-sale sign on your front lawn, a direct mail campaign or open houses and online marketing, make sure you’re aware of the strategy and, more important, comfortable with it.
If you’re buying, know what type of competing buyers are in your market, how the agent helps you search for a new home and handles multiple offers and the agent’s intensity of activity. For example, does the agent drive you to prospective homes or just email you listings?
Do you work alone? Understand if your agent handles all details solo or as part of a team. If your agent uses the team approach, find out what areas your agent specializes in and who else you may work with and in what capacity.
How many clients do you represent? This helps you gauge how much of your agent’s time you may receive. Is the agent spread too thin or not representing many clients at all?
The correct answer depends on your personal preference – time or experience. Preferably, your agent blends both.
Can I see your references? Typically you find these on their website, but check other sources too. If you can’t find online, ask for at least three references from clients. When screening, ask about the agent’s accessibility, personality, professionalism and communication and about the clients’ satisfaction.
How much do you charge? Most real estate fees are negotiable. Agents typically charge a percentage of the deal, averaging 2% to 4% on each side of the transaction. Percentages vary by agent and generally speaking total commissions are around 6%. In today’s red-hot housing market, commissions are typically 5% (2% to seller’s agent and 3% to buyer’s agent).
Check the average for your area before going into talks. Make sure you understand the agent’s cancellation policy and any other fees involved.
You can also use online assessment tools on sites like the National Association of Realtors.
What else should I ask? Use your judgment regarding the completeness and honesty of the answer you hear.
Ensure your agent takes the time to educate you and make you feel comfortable – don’t rush to make this decision or enter this relationship before you’re ready. Note the agent’s observations about your home and effort to explain key terms without real estate jargon.
Above all, assess to your satisfaction the agent’s genuine interest in helping you reach your goals.