According to the National Association of Realtors (NAR), 5.34 million existing homes and 667,000 newly constructed houses were sold in 2018. Out of all these properties that were sold, you can bet the majority of them were sold with the assistance of a real estate agent.
If you’re a first-time home buyer and you’re dipping your feet into the market soon, then you may have a lot of questions swirling around in your head. For instance, is hiring a real estate agent a good idea? And if so, how do you find the right real estate agent?
In this article, we’ll answer the questions many prospective buyers have so you can get peace of mind and feel comfortable when purchasing a home.
What Does a Real Estate Agent Do?
In the home buying process, you’ll run across real estate agents and Realtors.
Real estate agents are people who are licensed to help potential buyers and sellers with buying, selling, or renting real estate. This is why you’ll see the terms “buyer’s agent” and “listing agent”; the former is for the buyer and the latter is for the seller.
On the other hand, Realtors are licensed agents who are part of the NAR. Some may be real estate agents, but not all are. Under the NAR, they follow a code of ethics, which means they should not mislead clients and must treat them fairly and honestly.
Real estate agents are there to help facilitate the sale or rental of a property. This means they’ll help their clients with things viewings, open houses, paperwork, phone calls, marketing for listing, and more.
They have access to something called a multiple listing service, or MLS. This is a collection of information about homes for sale in the area. Every MLS has their own rules, but they’re usually based on the ones by the NAR.
Why Use a Real Estate Agent?
The home buying process can be very confusing. Not only do most people need to sort out a mortgage, but they also need to visit multiple homes to ensure they’re getting the right one for their needs and budget.
Not only does a real estate agent have access to local listings, but they also have the experience and training to find exactly what you need. This can cut down on time you’d spend on your own, sifting through listings that may not match up with your idea of a dream house.
Do I Need a Real Estate Agent to Buy a Home?
According to the NAR, 89% of home buyers purchased through either a real estate agent or broker. This is compared with the 5% who purchased directly from a builder or the builder’s agent.
Besides, 90% of buyers said they would use their agent again or would recommend them to their friends and family.
As you can see, buying a house with the aid of a realtor comes highly recommended. You can certainly try and buy a house on your own and succeed, but the service they provide is invaluable.
Can I Buy a House Without a Real Estate Agent?
You can buy a house without the assistance of an agent or broker. For example, you can still go to open houses and tour these properties on your own.
However, real estate agents are there to do everything in their power to make the sale go through. They get paid a commission, after all. This means they’ll work hard to ensure the road to homeownership is easy for you.
For example, they have networks of lenders, inspectors, and other professionals you’ll need during this process. They’ll also know all about the neighborhoods you’re interested in and other important details you’ll need to know to make an informed purchase. And most importantly, they can help you negotiate around the asking price.
Because of all this, it’s in your best interest to buy a house with the assistance of a realtor.
Who Pays The Real Estate Agent Commission?
When budgeting for a house, you need to consider the agent or broker’s commission. In general, the seller pays for both the listing and buyer’s agents’ commissions. However, those commissions are already factored into the price of the home, so in most cases, the buyer is technically paying.
Commission is usually 6% of the purchase price. This fee is paid at closing.
Are Real Estate Agent Fees Tax-Deductible?
If you’re buying the house and you’re paying for the commission, you can’t deduct them from your taxes.
How to Find a Real Estate Agent
Now you know a little bit about real estate agents and Realtors. Next, you’ll probably need some assistance picking the right one. Here are some tips on how to choose a Realtor or Real Estate Agent for buying a home.
1. Ask Friends and Family
A great way to find a real estate agent is to ask your family and friends. They’re more likely to be honest about the professionals they’ve used before.
Also, if they are of a similar demographic to you, the real estate agent will have experience working with clients in similar positions.
2. Do Some Online Research
Today, it’s easier than ever to conduct quick online research about local real estate agents. Simply type in something like “realtors near me,” and you’ll generate lots of results right away.
3. Check With the NAR
If you want someone who’s registered with the NAR, what better way than to check their directory? You can filter by area, designations, certifications, language, fields of business, and professional specialties.
3. Compare Online Reviews
Once you have a good list of realtors and real estate agents you potentially want to work with, hop online and check out their online reviews. What do people have to say about their services? Are they quick and responsive?
Bad reviews aren’t necessarily a bad thing either. No business in the world can please every client.
The important thing is to look at what people are complaining about, so you can assess whether or not that’s important to you. Also, you should see how the agent handles their responses to negative reviews. If they can do so tactfully and politely, then that’s a good sign.
4. Conduct Interviews
Choosing a real estate agent is like choosing an employee; you want to make sure you’re a good fit before you commit. This is why you should conduct interviews with all potential agents.
At these interviews, come prepared with a list of questions. For instance, ask them about their experience, whether they work mainly with buyers or sellers, their specialties, how many clients they handle at a time, and if they have references.
Good real estate agents should be able to answer these questions confidently. If they seem unsure of their answers or are trying to dodge the questions, then that may be a red flag. if they don’t seem very attentive and seem like they’re just chasing your money, that’s also a red flag.
The interviews are a great way to get a feel for real estate agents, so make sure you don’t skip them. Also, never feel pressured to choose one, especially during the interview stage.
5. Go With Your Gut Instinct
After doing thorough research and conducting interviews, don’t hesitate to go with your gut instinct. If there’s a real estate agent that particularly stands out above the rest, and you feel like you’d work well with them, then feel free to choose that professional.
There’s no right or wrong way on how to choose a Realtor or real estate agent, after all. But by following these tips, there are certainly smarter ways to choose one.
Hiring a Real Estate Agent Will Be Simple With Our Tips
Hiring a real estate agent may seem difficult to do at first. But with our tips, the home sales process will be a lot easier when you can get an agent with a good track record who can help you through the real estate transaction.
So use our advice on how to choose a Realtor or real estate agent and you may be able to find someone who can make this milestone much simpler, especially if you’re a first-time buyer.
Need some more information on mortgages before you buy a house? Then check out our page on understanding mortgages now.