As your grandma would say “people come in all shapes and sizes and different backgrounds”, and the same applies to folks in all professions including the realtors. Picking the right agent comes down to personal preference as you would choosing to hire that person to be your personal confident, advisor, consultant and a friend. Go for an agent that will be great to work with, flexible, open, well informed and knowledgeable as well as responsive, friendly, professional, patient and not so grumpy!
II. Are famous realtors best to work with?
That depends on what you believe will best meet your needs. For instance, the more well known agents typically work the sales calls, do the presentation and then hand over the client to their helpers as soon as the agency contract is signed and sealed. In this case, the agent will sell not just himself but the whole group of his/her helpers as being essential to providing that great service. These agent groups can take on many clients and tend to grow their agency as their clientele grows. Many of the large companies got started that way and most of the agents that operate in this model have been molded in one of these larger corporate establishments. They still provide good service but their primary objective is speed and efficiency and therefore are more focused on arriving on timely production goals. The downside of that model is that the agent you signed the deal with is not the agent you will be working with. Sure the top agent will oversee in some capacity the transaction but you will be assigned an unelected agent to work with on a day to day basis till you find or sell that home.
III. Are the smaller realtor shops worse or better?
On the flip side, you will have plethora of choices from independent agents working at large brokerage firms and the smaller mom and pop shops that usually take on as much as their time can allow. These agents tend to be more picky on the clientele they work with if their pipeline is full because they devote most of their own time rather than assigning helpers. What you see is what you get as these agents would serve as your dedicated fiduciary assisting you throughout the whole process rather than handing it over to an unelected helper available in their office. They too have helpers but those are the back-office people, often times their Brokers in Charge or other independent agents from the same office who fill in for each other on as needed basis. How good of a service you will get does not depend on the size of an office, it truly depends on the realtor you choose to closely working with. So again, choose your realtors you would like to work with that are knowledgeable, flexible, friendly and dedicated to serving their clientele.
IV. Does commission play a role in picking a realtor?
If the rate isn’t an issue then find the best well renowned agent in your town and work with them. You will pay more somewhere in the 6-7% range (note that this includes both the listing and the buyer agent fee) but you will get somebody who has a good reputation and will most likely provide you a great service. If you are trying to cut down on commission or may not want to work with unelected helpers, then you may opt to do a little bit more research and interview other less renowned realtors that are trying to get established in a new market and then choose one you prefer to work with. The best realtors started from ground zero and every realtor has a back-office at their fingertips to help out and provide additional consulting services. These new agents will be most likely to negotiate a lower rate in the 4% to 5% range and this will include both the listing and the buyer agent fee. However, not all offices and agents will include all services in their plans. Most agencies don’t offer free staging of homes that may cost as much as a few thousand dollars. If you are paying in the 6-7% range than the free staging for an empty home is a nice bonus and I would recommend to seek out agents that offer this as part of their fee structure.
V. Can you just pay the listing fee?
Some brokers offer to sell homes for as low as 1%-1.5% fee, i.e. Redfin. What isn’t advertised is that an additional fee gets added to compensate for the buying agents – these are agents that assist buyers with finding their new home. The buyer agent fee can range from 2.4% to as high as 3.0% of the home’s sales price. When a broker advertises just the listing fee always add the buying agent fee to calculate the total commission. So even with the lowest advertised rates of 1% to 1.5% your total selling fees will be in the 3.4% to 4% because the listing fee is just part of the total fee it takes to sell a house and with lower rates not all services may be included. Even when you opt for sale by owner where you have a 3rd party company charge you just to list your house in the Multiple Listing Service and leave the rest on you, even then you still need to be open to compensate the buying agents who bring the buyers. On homes that are hard to sell because of location or condition or in situations when sellers have to sell quickly, the buyer agent may compensation tends to be higher in the 3% range.
The agent you decide to hire will serve as your fiduciary and his/her responsibility will be to keep all of your information confidential from other agents throughout the house hunting purchase or sale transaction. The confidentiality helps in the final negotiation process so picking a broker that takes this relationship very seriously will help you in the end. If you can see your realtor as your trusted friend and a counselor than you may have found the right person.