The Big Mistake You Might Be Making Before Starting Your House Search
Check out our deep dive into The State of Home Buying in 2024 to see what you can expect in today’s real estate market. This content is presented by Homes.com; it was created independently by our editorial team.
When you’re a first-time homebuyer, the moment you walk into your first open house is when you take the leap from casually browsing online listings to actually navigating the real estate market. And that comes with a lot of questions, from how to get a preapproval letter to wondering if mortgage payments include property taxes. You don’t need to know everything or go through the home-buying process for the first time all on your own — that’s where your real estate agent comes in.
Finding a real estate agent is often as simple as taking a friend’s recommendation. In fact, according to Apartment Therapy’s summer 2024 home-buying survey, it’s the most popular way to choose an agent. Nearly half (48%) of recent homebuyers we surveyed found their real estate agent by “asking family and friends for recommendations.” It’s a good way to do it — 88% of the selection of real estate professionals we surveyed approve of getting a recommendation from trusted people in your life. (The second most-popular way to find an agent, according to 20% of recent buyers we surveyed? The internet! Eight percent used a house-searching website; 7% were automatically assigned someone after expressing interest in an online listing; and 5% used Google.)
Even if your friends and family know great professionals, you shouldn’t just take a name (from someone you know or an online rec) and run with it.
Many homebuyers in our survey said they’d wished they’d known more about finding an agent, and Kara V. from South Salt Lake, Utah, shared an important piece she missed in her search: “how to interview” a real estate agent.
It may seem like unnecessary extra work, but you should take the time to understand if your real estate agent is right for you. From discussing your goals to understanding your agent’s negotiation style, I asked a real estate agent and a lender what important questions first-time buyers need answered before committing to working together.
The 3 Questions You Should Always Ask Your Real Estate Agent
In your initial conversation with a real estate agent, you want to get an idea of their experience and how they plan to work with you throughout the process.
What experience do you have?
“Experience is everything when working with a real estate agent,” says Bret Weinstein, a real estate broker and CEO and founder of Guide Real Estate in Denver.
While someone who has spent many years working in the industry is a great option, you shouldn’t discount newer agents just because they don’t have that tenure. Agents with less traditional experience might be even more enthusiastic and have more time to commit to you as they’re growing their client database.
Whether you choose a seasoned vet or a newcomer, you should work with an agent who is knowledgeable about the market and able to confidently guide you through your home-buying journey.
What is your standard commission rate?
Buyers don’t typically pay out commission, but with the recent changes in commission structure, you should know before you decide to work with an agent if you’d be responsible for any of it. “They should clearly be able to communicate their value proposition as well as what compensation they are looking for,” Weinstein says.
“If you’re working with a great negotiator, more often than not, they’re going to be able to negotiate that the seller pays the commission rather than having to come back to the buyer to ask for money,” he adds.
How will we communicate about listings and questions I have?
You and your agent need to be on the same page about how you should bring questions to them or set appointments. Nicole Rueth, a mortgage lender as well as branch manager and senior vice president of The Rueth Team in Englewood, Colorado, suggests asking, “How will we stay in touch throughout the process?”
In Apartment Therapy’s survey, 88% of the selection of real estate professionals we interviewed said they talk on the phone with their clients, and nearly two-thirds (72%) also like to text. The right agent for you will make sure they’re using your preferred communication style. “This will help set expectations since communication is the key to everything,” Rueth says.
Dig into your agent’s expertise and experience in your target neighborhood.
Your real estate agent doesn’t need to be a niche specialist in your desired neighborhood, but a general understanding of a certain area you’re interested in can give you an advantage, particularly when it comes to comps. “Asking where they have done their business and how much they do are good questions to start,” Weinstein says.
“[A] broad market understanding with expertise to be able to recognize the pros and cons for every homebuyer and what they are looking for and applying it to any neighborhood that the buyer is interested in is vital,” he adds.
Rueth suggests asking how many homes they’ve sold in that neighborhood in the past year or if they’ve noticed specific market trends in the area. Sometimes it comes down to the type of house more than the blocks you’re focused on. “Ask, ‘What kind of homes have you worked with that are similar to what I’m looking for?’ ” Rueth says.
She adds that you want an experienced agent who is familiar with the area and specific home types. “[They] will know what’s normal for that neighborhood and will help you avoid overpaying or missing out,” she says.
Understand their negotiation process.
A real estate agent’s ability to negotiate in a competitive market is their calling card. “Each agent should have a process laid out from day one,” Weinstein says. If you have someone who can’t help you put forth an appealing offer, you could lose out on your dream house, but if your agent gives in too easily, you could overpay.
Weinstein says a real estate agent who wants to get you the best deal will be able to “communicate what a house is worth and their strategy to put that home under contract in a way that best fits a client’s needs.”
Rueth adds that “you want to know they can get creative and aggressive when needed.” She suggests asking something like, “What’s your strategy for making a winning offer in this competitive market?”
You can also ask how they’ve handled a tough negotiation in recent memory and how they got the deal done. “Their answer will give you a sense of whether they’ve got the grit and experience to get you the best deal,” Rueth says.
Find out about their relationships in the lending world.
Most homebuyers know what features they want in a home, and they may roughly know what they can afford. But the lending process? That can seem like a total mystery.
That’s where a real estate agent can be an all-important resource — assuming they know their stuff.
Weinstein suggests asking the agent what you should be looking for in a lender or why a monthly payment is a more important number than the top home price you’re qualified for. Even if you can Google the answers to these questions, you want to hear what the agent has to say.
“Lending is also about relationships,” Weinstein says. “As rates drop, most lenders will be competitive, so the real estate agent should have expertise on who is the best fit to lend to the specific buyers,” he explains.
Rueth adds that prospective homebuyers should ask about the agent’s communication plan with the lender and whether they have trusted recommendations. “You want [someone] who stays in the loop to make sure there are no delays or surprises,” she says.
Ask what the home-buying process will look like.
Weinstein recommends discussing with the real estate agent a realistic budget, as well as how this search will be tailored toward your goals, whether that’s a forever home, a rental, or an investment.
Rueth advises asking exactly what finances and documents you need in place before making offers and what the process will look like once you’ve found a house you’d like to purchase.
“You need a clear road map from offer to closing,” Rueth says. She also suggests asking a real estate agent about their plans to help you keep up with paperwork and deadlines. “It’s critical to have [someone] who keeps you organized and on schedule,” she says, “because missing a step could cost you the house.”
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