Milwaukee Condo & Real Estate Scene

The Wall Street Journal: Tips on Picking a Real-Estate Agent

According to The Wall Street Journal, there are approximately 2.6 million licensed real estate agents practicing in the United States. Whether you are a seller or a buyer, the following are questions you should consider before settling on the best agent for you:


1. What level of service do you want?

For you Sellers:
If you are comfortable handling some or most of the tasks in selling a home, there are plenty of "limited" service providers around to assist you. However, in most cases, you will have to host your own weekly open house, create your own marketing pieces, and negotiate directly with the buyer. It is similar to selling your home on your own (i.e. For-sale-by-owner). At a minimum, these service providers will advertise your property on Multiple Listing Service (MLS) for a small fee.

Here at Shorewest, REALTORS(R), we take pride in the level of service we provide. As a "full" service provider, we will market your home, host open houses, negotiate on your behalf, and explain real estate contractual terms in everyday language. In addition to the real estate aspect of our business, we also offer our very own in-house closing department and title company, Heritage Title Services. These additional services make our sellers' lives easier when they list their home with us.

For you Buyers:
The Wall Street Journal suggests that buyers look for an agent who specializes on the buyer's side of a transaction, known as a Buyers Agent Representative. The journal suggests that an agent who lists properties and sells properties could present a conflict of interest. Unfortunately, an exclusive Buyer Agent Representative is in the minority.

In the State of Wisconsin, REALTORS(R) have the ability of listing homes and selling homes without creating a conflict of interest. In fact, almost every buyer I work with I sign them up under a Buyer Agency Agreement. In this arrangement, I work for the buyer and put their interests ahead of all other's interests. The best part of this arrangement is that it doesn't cost any additional money for this representation. Before you begin working with a REALTOR(R), you should sit down with your agent and discuss how you would like to be represented in your real estate transaction.


2. How experienced is the agent?

In some states, a real estate agent can be licensed after attending classes and sitting for an exam. In Wisconsin, an agent must attend classes and sit for a state licensed exam. Once an agent is licensed, he or she can begin practicing real estate. Unfortunately, there is not a good way to determine a qualified, professional agent from an unqualified, unprofessional agent. The best way to know for sure is by word of mouth. Another way to know if you are hiring the most appropriate agent to represent you is to review the agent's educational background and credentials. Take me for an example: I earned two degrees from the University of Wisconsin- Milwaukee and have sat for two state license exams - Certified Pubic Accountant and Real Estate Salesperson. If you can't trust your CPA and REALTOR(R), then who can you trust?


3. If I am a seller, what's the agent's record and game plan?

To help answer this question, you should interview several real estate agents. Don't be afraid to interview real estate agents who work for the same broker. At the end of the day, a broker will charge the same commission rate. However, you need to feel comfortable with the agent who will be representing you.

When you schedule an interview, each agent should be putting together his or her own listing presentation. If an agent can't market and sell him or herself, then how is he or she going to be successful in selling your home? During the listing presentation, the agent should provide you with specific techniques he or she will use to market your home.

Ask the following questions:
1. What will you do to market the home I am selling?
2. How many homes in the neighborhood have you sold or helped buyers purchase in the past year?
3. Are open houses and newspaper ads planned?

An agent who performs his or her job well will provide you with suggestions in making your home more marketable. In other words, an agent should be honest enough to provide you with a list of deficiencies about your home. This list will make you aware of how buyers will view your property. This also gives you enough time to correct these deficiencies before your agent begins to market your property.

Finally, your listing agent should be communicating with you on a regular basis. Over the course of a listing, the market can change. I provide my sellers with a weekly "Cumulative Listing Activity Report" which lets my sellers know how well the marketing plan is working, any feedback received from potential buyers, and the current situation in the real estate market. By informing my sellers about the current market conditions allows us to re-evaluate my marketing efforts and make adjustments accordingly.


4. If I'm buying, what properties will the agent be showing me?

The Wall Street Journal states that properties listed by "limited" service providers or "for-sale-by-owners" are frequently avoided. "Limited" service providers generally offer a discounted commission rate, which agents tend to avoid. "For-sale-by-owners" avoid paying a commission by selling their property on their own. Generally, I will show every property that meets my buyer's criteria as long as the property is listed on Multiple Listing Service or MLS. Commission rates are not addressed when I show properties to my buyers. As for "for-sale-by-owners", I will contact them if I have a buyer who insists on seeing the property. At the end of the day, the seller needs to agree to work with me before I will show a buyer his or her property.


5. Is the commission negotiable?

At Shorewest, REALTORS(S), our commission is negotiable. Our commission rates begin at 6% and can be as high as 8%. It would be nice if I was the one receiving all 6%. However, this rate is split between the buyer's agent, the buyer's broker, Shorewest, and me. And, of course, I share my income with the Wisconsin Department of Revenue and Internal Revenue Service.

Caution: If an agent is so willing to cut commission...how willing is he or she going to be to cut your asking price?


6. Is the chemistry good?

To me, this is the most important factor. Quite frankly, any real estate agent can market a home and negotiate the offer. But, how well do you like and respect your agent?


7. Whom do agents represent?

I spoke briefly about this in question #1.

For you Sellers:
Generally, you will always be represented by your listing agent. In most cases, you will also be represented by the selling agent who shows your home. By default, the selling agent works for the seller (unless the buyer agrees to be represented under a Buyer Agency Agreement).

For you Buyers:
In the State of Wisconsin, buyers have a choice. Buyers can either elect to be treated as a customer (in this situation the selling agent represents the seller) or a client (selling agent represents the buyer). Before you step inside a single property with your selling agent, you should meet with your agent to discuss the advantages and disadvantages of both options. Before I meet any buyers at any properties, I schedule a "Buyer Orientation" meeting and review these two elections. These elections are documented in the "Disclosure of Real Estate Agency" which the State of Wisconsin mandates agents to review at the very "first, meaningful meeting" with buyers. At my orientation meeting, I put all of my cards on the table. I want my buyers to feel comfortable during the entire transaction and feel comfortable that there will not be any surprises during the transaction.


8. What do references say?

Word of mouth dictates one's success in real estate. The greatest compliment you can pay an agent is through a referral. An agent highly recommended by someone you trust is golden. The most telling question you can ask a reference is, "Would you hire David Ray again? Hopefully, the answer is yes. Hopefully, the person answering this question doesn't hesitate too long before saying yes. If there's any hesitation, call another reference or two.


This article was written by Amy Hook, writer for MarketWatch.

posted by David Ray @ 4:45 PM