How to choose the right real estate agentSelecting the right real estate agent can be a challenging process. With a flood of real estate agents to choose from, how can you ensure your agent is the right fit?
By following this guide created by Veterans United Home Loans, you will be able to select a real estate agent who can help you find and purchase your dream home.
Choosing Real Estate Agent
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Why Use a Real Estate Agent?About 80 percent of homebuyers use a real estate agent or broker, according to the National Association of Realtors.
That doesn’t mean you have to. Prospective home buyers can certainly spend time scouring real estate sites and home listings online. The Internet has a wealth of information that has helped to demystify the home-buying process. Being an educated buyer is key to getting the best deal possible. But it doesn’t replace the expertise and familiarity that comes with having a real estate agent.
If nothing else, consider the size and scope of this investment. You’re getting ready to make a huge purchase — maybe it’s $150,000, or $350,000, or even more. Why go it alone?
There’s a litany of reasons to use a qualified agent. Here’s a look at a few of the big ones:
• Expertise: Real estate agents help people purchase homes every day. This is their business, their profession. In contrast, buying a home is something you’ll probably do a couple times in your life at most. It’s true the Internet has taken much of the mystery out of the process. But we still think it’s better to have a trained, professional advocate to navigate the process, order inspections, help craft an offer and finalize the contract. Real estate agents have ready access to information on comparable home sales, school districts, zoning and land use regulations and all kinds of community-related data.
• Hunting for Houses: Real estate agents will have access to the Multiple Listing Service, or MLS, in your area. This reaches into corners and crevices the everyday Internet cannot. Real estate agents can use the MLS’s exhaustive categorizing to create custom searches for your dream home. They can get constant updates whenever a home that meets your parameters hits the listings. That doesn’t mean you can’t hunt for houses on your own. Just be sure to have your agent on speed dial.
• You Have an Advocate: In most cases, the person selling the home will be using another agent, a listing agent, to showcase the site and find a buyer. His or her sole job is to get the best offer possible from a qualified buyer. It’s a good idea to have an expert who can advocate for you and, if necessary, go toe-to-toe with the listing agent. Your real estate professional, the buyer’s agent, is there as a surrogate, charged with acting in your best interests.
• It Costs Zero Dollars: It’s not because real estate agents work for free. They don’t. But throughout most of the country, the person buying the house pays nothing to use a real estate agent. Instead, the agent working on your behalf will split a sales commission with the agent who listed the property on behalf of the seller. Leveraging a real estate agent’s expertise and access costs a borrower nothing. If you have any doubt on that, simply ask the agent or call the office. Look elsewhere if you don’t get a straight answer.
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Explaining Buyer’s AgreementsBefore delving into specifics, it’s important to be familiar with buyer’s agreements. Most real estate agents will expect you to sign a buyer’s broker agreement before they agree to represent you.
This document creates a formal, legal relationship between you and your agent. Although there are several different types of buyer’s agreements, the most common form requires an exclusive right to represent. Basically, this means that you can’t hire another agent to represent you during the length of the agreement. The agreement also usually entitles the agent to a commission (generally paid by the seller) if you purchase a home through the agent.
Be certain you’re satisfied with your real estate agent before signing a buyer’s agreement. It may be difficult to change real estate agents once you have signed this document.
Read the document carefully and ask about exit clauses. Some agents are willing to prematurely end a buyer’s agreement if the relationship is no longer harmonious, but many will not. When in doubt, start with a short contract (30 days should be sufficient). You can always choose to renew the contract.
To avoid entering into an agreement with an unsatisfactory real estate agent, interview your potential agents over the phone or in person. Utilize the tips below to assist you during this process.
The three types of Buyer Agreements1. Non-Exclusive / Not for Compensation • Buyer can hire more than one agent to locate property • Buyer is not obligated to compensate the agent2. Non-Exclusive, Right to Represent • Buyer may purchase a home through another agent, provided the home is not introduced to the buyer by the initial broker3. Exclusive Right to Represent • Buyer cannot hire more than one agent to locate property
Four Ways to Find an Agent• Hop online and read reviews of local agents. Look for those with lots of listings and positive reviews, but remember that a listing agent cannot represent you. In other words, the agent for your dream home cannot be your buyer’s agent.
• Get referrals from family and friends. This is a common and often reliable way to find trusted agents. Talk with family, friends and community members about their experiences and solicit recommendations.
• Check out realty networks. Associations, trade groups and other organized networks of agents can be a wealth of resources.
• Ask your lender. They will often have preferred agents who have helped previous customers navigate the process.
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Key Questions to Ask Potential Agents Finding the perfect home often takes a lot of legwork. With the excess of homes on the market, you will need a hard-working real estate agent to help you sift through the possibilities.
These are some work ethic-related questions to consider when choosing a real estate agent:
• Q: Does your real estate agent seem eager to help?
• A: If you feel like your agent is doing you a “favor” by helping you find a home, you probably need a new one. No matter how much you’re spending on a home or how long it takes to find one, you should feel valued and respected.
• Q: Does your agent show up on time?
• A: Poor time management is often an indicator of other shortcomings. Your time is valuable.
• Q: Does your agent seem prepared during your meetings?
• A: Make sure your agent has done his or her homework before meeting with you. Your agent should be well-informed on the homes you are considering and recent comparable sales.
• Q: Does your agent exhaust all options?
• A: Good real estate agents are experts on the local market, and by showing you a wide variety of homes, they help buyers become experts as well. Someone who is unwilling to take this extra step may not be your best advocate. But there’s a balance here. An agent who continues to show you undesirable homes that aren’t a good fit for your needs probably isn’t a good fit for you.
• Q: Does your agent exude availability?
• A: Ask how much time the agent is willing to devote each week to you and your home search. Combing through real estate listings and setting up home tours can be a time-consuming process and you need to make sure your agent is able to commit to your needs.
An agent’s obligationsMost states assert that agents legally owe their clients the following:
• LoyaltyThe agent must attempt to gain an advantage for the buyer
• ObedienceThe agent must obey al lawful instructions by the buyer
• DisclosureThe agent must tell the buyer everything they can learn about the seller and the property
• ConfidentialityThe agent must keep certain buyer information confidential, including the buyer’s motivation for purchasing a home and the buyer’s ability or willingness to pay more for the poperty than they are currently offering
• Reasonable care and diligenceThe agent must be competent to represent the buyer
• AccountingThe agent must accurately account for any funds or documents provided by the buyer
Congeniality CountsPersonality plays a key role in selecting a real estate agent.
First-time buyers can’t imagine how much time they will end up spending with their real estate agents. Keep in mind that your agent is going to be with you during negotiations, on all home tours and throughout the closing process.
Home tours are often a very time-consuming portion of the home-buying process. Homebuyers see an average of 15 homes before choosing one, according to the Department of Housing and Urban Development. No one wants to tour 15 homes with an agent who grates on their nerves!
Everyone is different, but there are a few personality traits that most buyers find valuable in their real estate agents:
Chicken or Egg: Find an Agent or Lender First?Some military borrowers prefer to start by finding a real estate agent to work on their behalf. Others may decide to hunt for a qualified mortgage company that can give them an idea of how much they can actually afford to spend.
If you begin by finding a real estate agent, one of their first questions will be: Have you been preapproved for a loan? So, you’re going to circle back to the mortgage company sooner rather than later. We figure you might as well start there. Besides, home buyers who have a preapproval letter are likely to get more traction with both sellers and listing agents.
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• Hard-working
• Collaborative
• Tech-savvy
• Self-motivated
• Good-natured
• Intelligent
5 Reasons to Use a Real Estate Agent“You wouldn’t strike out for the summit of Mount Everest on your own, and you certainly wouldn’t hop in your Jeep and take off across the Saharan wilderness with just a map and a pair of binoculars. You’d hire a guide, and in the adventure of home buying, being your guide is the job of a real estate agent.”
• It won’t cost you a dime: The seller pays commission to his or her real estate agent and to your agent upon closing.
• Access greater resources and information: A good real estate agent has spent decades forging relationships in the community that will yield the information you need when buying a home.
• Negotiate more effectively: The experienced hand of a real estate agent guiding your offers and counter-offers will pay big dividends.
• Avoid costly mistakes: Buying a home involves a veritable whirlwind of paperwork, and if you accidentally sign on the wrong line or fill out a form incorrectly, you could be looking at delays in closing.
• The bottom line: If you can hire a guide for buying a home (or anything else, really) for free, you should do it. Get the benefit of local connections, great resources, negotiating skills and someone to help you through the paperwork, and let the seller pay the commission.
— From the Future Military Homeowners blog
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Local expertiseIt sounds obvious, but it’s worth saying: You want an agent who knows your target area, from housing stock and school districts to crime patterns and hot spots.
Learn about how long your agent has lived and worked in the area. Familiarity with the local market is particularly important when considering:
• Schools: The quality of schools can vary from neighborhood to neighborhood. Before selecting a real estate agent, ask what they know about the local schools. Don’t take that information for granted. Compare their statements to information gleaned from others in your area, and from information made available online through your state Department of Education and sites such as Education.com.
• Market direction: Is your desired neighborhood at risk of real estate value collapse? What can your real estate agent tell you about the history of neighborhood real estate values? More importantly, what can your agent tell you about the future of real estate values? Will a new highway be built in your backyard? Is crime becoming a problem in your desired neighborhood? Agents who are unfamiliar or unconcerned with these issues are probably not a good fit.
Top factors in choosing a neighborhood
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% of sample agreeing Source: Relocation.com
word of mouth/reputation 74%
local crime reports 67%
active Neighborhood Watch program
newspaper and TV crime reports
speed limit on streets
proximity to police and fire stations
gated community with security patrols
upkeep of homes and lawns 75%
38%
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31%
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Finding Agents Who Understand Military BuyersQualified veterans and active duty personnel have access to one of the most powerful loan programs on the market.
VA loans come with significant financial benefits, including the ability to purchase a home with no money down. VA loans also have no private mortgage insurance (PMI) and feature rates consistently lower than their conventional counterparts.
The VA loan is a unique tool that requires specialized knowledge. Properties must have proper maintenance and be in good repair. Condos and homes that are part of an association require VA approval. Private wells, septic systems, termite inspections and shared maintenance of roadways all have specific VA guidelines.
A good buyer’s agent will know this. But many do not.
That’s why it’s critical for military borrowers to take the time to track down an agent who’s worked with VA loans and understands the program’s requirements and its unmatched buying power. A VA-savvy agent can make a huge difference for borrowers.
Agents who can maneuver through the agency’s procedures and requirements can save borrowers from big-time hassles and headaches on things like appraisals and property requirements.
It’s important for your real estate agent to understand and appreciate the transient nature of military life. Ask prospective agents about resale possibilities in the area. Help your agent understand that sudden relocation may necessitate a quick sale of your new home.
Your agent should be able to tell you which homes and areas will be better resale options. Agents who are familiar with the military lifestyle will be better equipped to answer these questions and to direct you in your home selection.
“Don’t just open the phone book and say, ‘I’m going to choose this person,’” said Ruben Moya, who with his wife, Kerry, an Air Force veteran, purchased their Nevada home with a VA loan. “Do your homework on this person. Make sure they’re looking out for your best interests. It’s one of the biggest investments in your life.”
Signature Benefits of a VA loan• No down payment• No PMI• Low interest rates• No prepayment penalties
Veterans United RealtyThe best way to find a real estate agent who knows VA loans is to utilize Veterans United Realty, a network of more than 1,400 agents who work routinely with military borrowers. Home buyers who use a VUR agent receive up to $500 after closing.
Visit the site or call 800-985-5723
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Finding an Agent You Can TrustA home purchase is likely the largest financial investment you will ever make. That’s one of many reasons why you need an advocate you can trust.
Your agent should ask you lots of questions to be well-informed on your home-buying needs. Be certain that you cover these topics
with your agent before searching for a home:
• Price: Make sure you know what you can afford before looking for a home. One quick way to determine how much you can spend on a house is to use a VA loan calculator. For a more detailed and thorough
calculation, you should consider getting prequalified for a loan. Prequalification does not obligate you to get a mortgage. Be clear and firm with an agent when discussing your price range.
• Size: One of the most difficult things to change about a home is its size. Carefully consider your current and future needs. Plan on
expanding your family soon? Or will your teenage son soon be moving away? Thinking about these issues will help you to purchase a home that
is the right size for you and your family. Be certain that your real estate agent is aware of your needs.
• Location: You can’t change a home’s location. Consider how close you need to be to family, childcare, schools, work and recreational areas. Keep your agent informed on these preferences.
VA-Savvy Agent Saves Military Couple a BundleArmy veteran Calvin Eley and his fiancée, Lynnecia Johnson, came to Veterans United Home Loans in 2010 hoping to purchase a home in northern Maryland using Calvin’s VA entitlement.
The couple had done some cursory home shopping and, given their budget, figured a townhome would be their only real option.
Their Military United Realty agent took them through dozens of homes, pointing out deficiencies and issues that would prove problematic for the VA. The agent ultimately found them a single-family home that not only met the couple’s needs but actually came in below their price point.
“The home we found, I believe we were the only ones who had a chance to walk through and see it,” Lynnecia said. “It went on the market, [our agent] notified us the same day, we saw it and put in an offer. She was able to steer us in the right direction as far as finding a home that the VA would approve.”
ConclusionThe search for a home can be one of the most exciting, frustrating, nerve-wracking and gratifying experiences of your life.
By purchasing a home, you are making a momentous investment that comes with both rewards and responsibilities. It is essential to protect that investment by partnering with a real estate agent who understands the unique needs of military borrowers and works tirelessly to exceed expectations.
