In Arizona we have over 43,000 licensed Realtors and odds are that you either know someone or are related to someone that has a Real Estate license.
Obtaining a Real Estate License is not difficult and if a person applies him or herself for a 6-week period, they can obtain the required subject matter to pass the state and federal exams. The test takes about 4-5 hours to complete and for some people several attempts, but the subject matter learned doesn’t teach you how to be a great Realtor. Real estate transactions are complex, just as every person has a different personality and every home is unique, so are the complexities surrounding each transaction for a seller and a buyer.
With the perception of great income possibilities and the ease of obtaining a Real Estate License, most likely you have friends or relatives with a license. Is it a good idea to hire your friend or relative? Odds are that you shouldn’t. Before you do, consider this: Your home is one of your most important investments. Would you hire a relative or friend to handle your 401K, give you medical advice, or treat a life threatening disease…? Most people would seek out a Professional with the necessary training and experience to give you the absolute best care and counsel. You should view hiring a Realtor in the same way.
HOW MUCH EXPERIENCE DO THEY HAVE IN REAL ESTATE?
Aunt Jane has been licensed for 25 years but how many homes has she sold in the last 12 months? The average agent sells 2-3 homes a year, not sure that qualifies them as a part time agent, there is no way they can be at their best and proficient to help you succeed through a complex process. It is very common for a person to obtained a license, never work full time at it, or have much success, but keep their license active. Even successful agents may keep their license for years after they’ve retired, but like anything else, laws change, markets change, technology, and forms change. Are they still on top of their game?
Unfortunately, the other agent you should be aware of is the new agent; maybe your sister’s son Mark just obtained his license. As I mentioned earlier, getting a Real Estate license doesn’t teach you how to be a great agent. If he’s REALLY working with an experienced Broker or Mentor, it might be worth taking a chance with them. In that case, interview the Mentor/Broker that is teaching him to determine their level of involvement, because just over seeing the process/transaction is not helping you out. Who is going to negotiate on your behalf? Sometimes a new agent may work harder to prove them selves, but nothing can replace years of experience and learning situations. Its better they learn on someone else’s expense and not yours. This is one of the areas I hope to see change in our industry; there should be a required mentoring period so that a new agent isn’t learning the business at the consumer’s expense.
Choosing your Realtor is one of the most important decisions you will make when purchasing a home. An agent that doesn’t know and understand the current market can be an expensive mistake. An in-experienced agent may not know how to position you for the best leverage on the negotiating table, thus causing you to pay more then you have to for the right home. He/She can be too eager to market your home above real market value, your home doesn’t sell, and this can cause you to leave thousands of dollars on the table or cause other expensive challenges.
An inexperienced or new agent could cost you your dream home. It is critically important to know the market, values, and timing. Lets say you found the perfect home, you’re excited and want to make an offer. The new/inexperienced agent doesn’t have a good understanding of value and timing thus agreeing with you to make too aggressive of an offer. You make an offer 12% less then list price. What you don’t know is there are others out there looking for the same home, and the sellers priced the home correctly for a quick sale. After rejecting your offer, they receive another offer within 2% of list price with underwritten preapproved financing, and the right terms. The seller accepts the better offer and your back out looking again. An experienced agent would have been able to recognize the correct pricing, position you with the best approach and help you to make the right offer to help you obtain your dream home.
Having a real estate license doesn’t mean you’re an expert. Experience and successfully closed transactions with satisfied clients prove you’re an expert. There’s a lot to consider when purchasing a home, find an expert who will guide you through all the steps. Follow this link to Questions You Should Ask Before Hiring a Realtor.
HOW MUCH DO YOU WANT FRIENDS & FAMILY TO KNOW ABOUT YOU?
Hiring a relative or friend of the family seems like a great idea, in theory you would think that family would always look out for your best interest….it doesn’t always go that way. Even if your Uncle Gary is a seasoned Realtor, he may hear what you say you want, but Gary seems to know what you want, better then you do. Will he really listen and understand you like someone that doesn’t know you?
Selling your home with Uncle Gary can be just as risky. Do you want him to know that you took out a second mortgage to finance the new business? Or that some family issues caused debt you need to pay off, or maybe you have had great financial increase in your life that you don’t want family to know about? It might be a real challenge for him not to let that slip out to family.
Buying and selling a home is a large financial transaction and can be a stressful process. It can be much easier to go through it with an objective professional that doesn’t know all the ins and outs of your family. What if during the process something doesn’t work out, how would you feel if you were dealing with a family member, what would it be like the next time you see them at a family function?
HOW DO YOU HIRE A TOP NOTCH REALTOR?
You’d love to support a family member who’s trying to get started in Real Estate, and you know your Aunt Jane is making sacrifices trying to stretch her retirement income. They could use the commission from helping with your transaction. Before you commit to hiring them, interview at least two other agents.
I have highlighted a few of the key questions below, but for a full list of interview questions click this link, 21 Questions To Ask Before Employing An Agent
- What kind of a program do you use to attract 100’s of buyers?
- What is your List Price to Sales Price ratio for both listings and purchases?
- Do you have references I may call?
- Do you have a written 100% satisfaction guarantee?
- How many transactions have you completed in the last 12 months?
Hiring the right Realtor is critical to accomplishing your Real Estate goal. If you’re selling, what kind of marketing does that agent do? Look at their past listings, samples of photos, marketing materials, the technology they use, their marketing plan, their performance statistics. Do they have a history of pricing homes to sell at maximum net? Or do they have a history of overpriced listings with longer then average marketing times? Once you’ve hired someone, make sure you have a clear understanding of what he or she expects from you and what you expect from him or her like Guarantees. Determine how and at what times your home will be shown, what systems do they have in place for follow up, how often will they update you. Ask for a detailed marketing plan that’s specific for your home.
If you’re buying a home, hiring a buyer’s agent is smart regardless whether you plan to purchase a resale home or New Construction, there are many benefits to having buyer agency representation. The first thing your buyer’s agent should do is, refer you to a lender for a Mortgage Pre-Approval. Once you have the Pre-Approval, you and your agent will know how much home you can afford. This is another area where working with family can be a problem. Who wants family or friends to know how good or bad your credit is or what your income is?
A Top Buyer’s Agent will have their own website for you to search listings and get up to the minute accurate property notifications. The Best Real Estate Websites update the listings several times a day, add new listings as they come on the market and they remove listings that have gone into contract. Some of the well-known national websites no longer have access to all the listings. If you’re using Zillow for your search, you can miss as much as 20% of the homes listed, additionally, a great buyers agent will provide you access to available homes not currently advertised on the market. You’ll also drive your Realtor crazy by asking to see homes that have gone into contract. They’re not available but still show up on Zillow as available.
The Real Estate Market is alive, constantly changing and evolving in its pricing, market times, inventory, technology, and regulations. After interviewing at least two other agents, ask yourself how your relative/friend compares to the other agents. You should only hire your relative/friend if they are equally competent!
HOW DO YOU TELL A RELATIVE OR FRIEND YOU HIRED A TOP PRODUCING REALTOR?
Honesty is usually the best policy. If your relative or friend has your best interest in mind, they will understand. While they may have their license, do they have the latest technology, a current feel for the market, above average performance statistics (If they know them)? If they’re just getting started and still work another full or part time job, they won’t have the needed experience, knowledge, and time to focus on your needs for a successful transaction? Are you willing to gamble with thousands of your hard earned dollars and equity?
These are all valid reasons for not hiring your friends or relatives and you shouldn’t be afraid to let them know. If they really care about your interests they will be willing to admit they are not on top of their game and that your best interest is hiring someone that is.