Working with Real-Estate Agents in Your 20s and 30s
When you buy or sell a property such as a condominium, town home, or single family home, if you’re like most people, you’ll likely work with a real-estate agent who’s paid on commission. Although the best real-estate agents can help you find a home that meets your needs, the commission arrangement can create conflicts of interest. Because agents get a percentage of your property’s sales price, they want you to complete a deal quickly and at the highest price possible. When you’re a seller, the agent’s incentives can be good, but when you’re a buyer, they can be in conflict with what’s best for you.
Some buyers’ agents say they can better represent your interests as a property buyer and will sign a contract with you to represent you as a buyer’s agent. However, agents working as buyers’ brokers to represent you still have conflicts of interest in that they get paid only when you buy and earn a commission as a percentage of the purchase price.
To find a good real-estate agent, begin by interviewing at least three agents. Ask the agents for references from at least three clients they worked with in the past six months in the geographical area in which you’re looking. Look for agents with the following traits:
- Local market knowledge: Investigating communities, school systems, neighborhoods, and financing options can be a huge undertaking. Good agents can help you tap into various information sources as well as share their contacts with you.
- Full time and experienced: Ask how many years the agent has been working full time. The best agents work at their profession full time so they can stay on top of everything. Many of the best agents come into the field from other occupations, such as business or teaching. Some sales, marketing, negotiation, and communication skills can certainly be picked up in other fields, but experience in buying and selling real estate does count.
- Honesty and patience: A real-estate purchase or sale is typically a large-dollar transaction from the perspective of your overall personal finances. So you need an agent who always answers your questions truthfully and who always goes out of his way to disclose anything that could affect properties you’re considering. You also need a patient agent who’s willing to allow you the necessary time to get educated and make your best decision.
- Negotiation and interpersonal skills: Putting a deal together involves lots of negotiation. Ask the agent’s references how well the agent negotiated for them. Also, your agent needs to represent your interests and get along with other agents, property sellers, inspectors, mortgage lenders, and so on.
- High-quality standards: Sloppy work can lead to big legal or logistical problems down the road. If an agent neglects to recommend thorough and complete inspections, for example, you may be stuck with undiscovered problems after the deal.