Posted by:
Don Diltz
Real Estate Broker
Stanford MBA
Many of you know I teach a class on real estate at the Continuing Studies Program at Stanford: BUS76: Residential Real Estate: The Good, The Bad and The Ugly. In fact, the first class of the next session will be on April 2, 2008. There is still plenty of time to register; if you know anyone who might be interested, you can direct them to this link. http://continuingstudies.stanford.edu/course/BUS76.asp. In my class at Stanford, one of the favorite questions students ask is “How do you go about choosing a real estate agent?” Ultimately, there are countless considerations but I’ve tried to whittle them down to a top 10 list:
1. Education
Pick an agent who is well educated. The advantage of a broad education is that it prepares the agent for dealing with and responding to unanticipated situations. While there are many categories of situations that can be anticipated, the reality is that every real estate transaction usually involves at least one situation that could not be anticipated.
2. Experience
Pick an agent who has a breadth of experience. The experience factor will reduce the unanticipated events because the agent will have experienced something similar to most situations. Sometimes you may be attracted to use a less experienced agent which is ok if the agent is closely mentored by a more experienced agent. Then the question is how available is the senior agent to mentor the agent you’ve chosen.
3. Generalist vs. Specialist
The reality is that you are better off with some specialization but not too much. For example, it is important to pick an agent who works in the type of product that you want to buy. Don’t hire a residential real estate agent to help you buy a commercial property and vice versa. While the agent you use should be someone who works regularly in the area where you want to buy or sell, it may be a mistake to pick an agent who works exclusively in a particular neighborhood because the diversity of their experience, both in marketing homes for sale and in evaluating homes to buy, may not be sufficient. Pick someone who works with both buyers and sellers so that they are familiar with both sides of the transaction.
4. Systems
The best way to make a transaction go smoothly is to pick an agent who has systems in place to help in the process. The systems may consist of checklists, established contacts for inspections and home repair and evaluation and established procedures for moving through the transaction. Systems in place can assist in assuring that the routine items are handled routinely and in identifying items that are not routine so they can be dealt with separately.
5. Availability / Responsiveness
Be sure the agent you choose is available both in theory and practice. Some agents are well known for being high producers and the way they manage their high numbers is to insert layers of personnel between you and them. If the agent is spread to thinly, they won’t have the mind share to spend on your project. Similarly, some agents are rigid in drawing boundaries to the extent that they cannot be responsive to your needs. While everyone deserves to have a personal life, it is important
6. Ability to Communicate Without Mystery
The agent you choose should be someone who can explain complex real estate issues without making you feel like a dummy. You deserve to understand every piece of the transaction and all the nuances, as much as you have an appetite for. The right real estate agent will consider it a privilege to bring you into the fold and make you a sort of instant expert – if you have the desire to understand. There are definitely areas that you have to be responsible for and cannot delegate the responsibility to the agent. The agent needs to help you make the most informed decision possible.
7. Ability to Listen
Listening to your concerns and the concerns of other parties in the transaction is critical to finding an outcome that is satisfactory to all. The best real estate agents do more listening than talking and make their talking count by addressing the issues that are most relevant in a way that is likely to be understood.
8. Willingness
You need to find an agent who not only knows the right things to do but is willing to put out the extra effort to make sure they all get done. Someone who will get the extra bid on a project if you want more possibilities; someone who will take the time to show you another house on your time frame.
9. Trust
More important than anything I’ve mentioned so far is that you need to be able to trust the real estate agent you choose. There will be many times in the real estate transaction when you won’t have the time, energy or inclination to understand the all the facets of a decision that needs to be made. You need to trust that your agent will put your interests first and will provide you with the salient information and guidance on choices
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10. Rapport
Finally, and, a sine qua non, is that you should choose an agent with whom you have a rapport; someone you feel comfortable with. While that rapport is of little value if the qualifications are not there, the qualifications are of little value if you do not have a rapport that allows you to feel comfortable in accessing the skills and experience of the person you choose to work with. Buying and selling residential real estate often represents the largest financial transaction you will make. It is fraught with risk and causes high anxiety. You need to have a collaborator you can work with under pressure and feel comfortable with.
