5 Mistakes Buyers Make When Choosing a Real Estate Agent
Buying a home can be a stressful, time consuming process. The increase in available information to buyers has actually caused more confusion for buyers that negatively affects their experience. Add to that the immense competition amongst buyers for a limited pool of homes and it’s no wonder why most buyers feel exhausted during, and after, their search concludes -- with some buyers even giving up before finding that next home.
Here are 5 mistakes I have seen buyers make here in the San Francisco market.
(1) Choosing to Work with a Part-time Agent
So much of being a successful buyer in this market is aligning yourself with the right agent. As information transparency has increased via internet search portals like Zillow and Redfin, the role of the real estate agent has changed as well. A successful agent is not one who just makes you aware of properties and opens doors for you.
You want to choose an agent based on criteria such as --
Access to all inventory -- Did you know that there are homes bought and sold every day that never make it onto the real estate search portals? Consider the benefits to you as a buyer if you knew everything available for sale -- including on-market, off-market (aka pocket listings), and pre-market (coming soon) homes. In an environment as competitive as the San Francisco Bay Area, every potential edge matters and aligning yourself with someone who can expose you to all properties is one of the keys.
Relationships -- Is the agent a known entity in the market he/she serves? For example, when an offer is presented by this agent, does the listing agent on the other side of the transaction know of him/her, i.e. is there “brand name” recognition with the agent? Is the agent active in the agent community and able to uncover off-market and pre-market homes for you? Does the agent have the right 3rd party relationships such as lenders, inspectors, escrow officers, attorneys, and more who he/she can recommend based on your specific scenario? These are all important players in a transaction and having an agent who can pull together trusted resources will help round out your team and provide peace of mind during the process.
Understanding of the market -- Part of the role of an experienced agent is to save clients time by quickly assessing a property sight unseen and sharing feedback of the property’s value with them. Why is this important?
First off, your time is valuable (money) and the last thing you want to do is spend your nights and weekends looking at homes that are not going to sell within your budget. Buyers are often frustrated by the spread between the list price of homes and the actual final sales prices. By leaning on a trusted agent for analysis on the true value range, clients are able to spend time looking at the homes that are “real” and forego ones that are listed at significant teaser prices.
Secondly, you want an agent who has physically seen as many homes as possible. An experienced agent can pattern match against the database of the thousand of homes he/she has seen vis a vis the property you’re interested in. The agent can then raise potential issues that could be sticking points in the buying process, as well as the pros and cons of specific properties since he/she has seen so many of them in person. Find an agent that has a good sense of the neighborhoods you’re considering, the particular block the home is located on, the various floor plans and layouts, orientation, natural light quality, nearby parks and amenities -- all important attributes for full-time agents to have vs. those that are just part-time.
Bottom line: As enticing as it may be to work with a friend or family member who does real estate on the side, the stakes are just too high to entrust a million dollar + decision to someone who is not a full-time professional in the field. Just as you’d never see a part-time dentist to perform a procedure on an ailing tooth, why would you lean on the feedback and guidance of someone not in the field every single day?
(2) Relying Solely on Social Media to Identify an Agent
Looks can be deceiving, especially when it comes to the world of social media. I totally understand the mantra of “fake it ‘til you make it,” but as a prospective buyer planning to invest significant amounts of money on a home purchase, you also need the confidence and peace of mind that the agent you choose can actually get the job done. If you are assessing an agent’s social media page, at the very minimum confirm that the majority of photos and videos he/she is posting are from actual properties they’ve sold.
Bottom line: Don’t rely on follower count alone when deciding the best agent for you.
(3) The Discount Agent
We all want the comfort of knowing we’re not overpaying for a particular product or service. The flip side of this is asking whether you’re comfortable with limited service and limited interaction with the agent you choose to work with. A rebate or kickback can sound interesting -- and is definitely a nice attention getter -- but unpack that a bit and truly find out what you’re getting (or in this case, not getting) as a result of that rebate. Are you comfortable working with multiple parties on your transaction? For example, one person to show you a home (who likely has no background on the home itself -- i.e. when it was built, why the seller is selling, potential issues, etc), another to negotiate and do the contract work for you, and then another to help guide you through escrow? Or do you want a singular, dedicated agent to lead the way from end to end -- who knows your communication style, your likes and dislikes, and ultimately what you’re looking for in a home?
The other thing worth mentioning is the buyer agent’s fee is paid by the seller. There are no direct costs to work with a buyer’s agent.
Bottom line: By having a full-service agent working alongside you, this ensures no balls are dropped and communication is as tight as possible.
(4) Working with Multiple Agents
Some buyers think they stand the best chance of finding the home they want by engaging multiple agents to work with them at the same time. In reality, this is setting yourself up for failure as you will likely never build a tight enough relationship and communication stream with one particular agent to get what you truly want. For instance, if you tour a home with Agent A and share strong feedback on a particular home to the agent, that’s useful guidance heading into the next home you see together. An attuned Agent A will also be able to pick up on your reaction to certain aspects of the home that they will also incorporate into future homes they recommend. If that real-time communication never gets shared with Agent B and C, then you’re just spinning your wheels since other agents aren’t able to incorporate that feedback into their process -- ending up wasting your time (and time is money).
Think of the agent / buyer relationship like entering into a serious commitment such as engagement or marriage. I bring this up because experienced agents treat the relationship that way and expect a reciprocal understanding. Good agents do not take on more clients than they can handle and spend significant amounts of time and resources for their clients before seeing any return, i.e. in the success-based model which is real estate sales, agents do not earn anything until a property actually closes escrow. That “all-in” approach is what makes these agents successful, even in the face of the risk that the buyer never finds a home to end up purchasing.
Bottom line: Once you find the agent you’re comfortable, confident in, and can picture getting the job done for you, then commit and forge ahead.
(5) Not Interviewing Your Agent
You and your agent will be spending significant time together during your buying process (and beyond) so getting to know and ultimately trust your agent is crucial.
Carve out time to grab coffee (or in this case a Zoom session) with your agent and ask questions such as the following --
Why did you get into real estate? Assess whether there is a passion and enthusiasm for their work, or is this just something they fell into and has become stale?
Tell me about your business? Understand the agent’s business in terms of what geographic areas he/she serves and also the mix of buyers/sellers they work with.
Can I speak with previous home buyers of yours? Getting a chance to hear from other successful clients of the agent is important. It will give you a more unfiltered view of the agent and that client’s experience. As you speak with the referral, check for continuity in his/her responses that you also observed from the agent.
Learn about the agent’s game plan. Like most things in life, achieving a goal requires a plan and buying a home is no different. Ask the agent to describe his/her plan for getting the job done. What are the short, medium, and long term steps that need to happen to make your home buying goal a reality. Does the strategy resonate with you? Do you feel actively engaged in the plan?
Bottom line: Just like assessing mutual fit for a job or significant other, the same goes for establishing rapport and trust with your agent.
In summary, buying a home takes a full-time effort to be truly successful. The good news is you do not have to go on the journey alone. Choosing an experienced agent to be your shepherd will make the ride smoother (and even fun!).
For a complimentary consultation on how to best go about your home buying journey, feel free to reach out to me anytime!
Bradley Joe
415-269-8190
bradley.joe@compass.com
DRE# 01956822