Buying & Selling Houses

How to Choose the Right Real Estate Agent: 4 Questions to Ask

Expertise: Landlording & Rental Properties, Real Estate News & Commentary, Real Estate Investing Basics
43 Articles Written
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In the Denver market, 15 percent of real estate agents do 85 percent of the transactions (1), so it is important to know that you are working with an agent who considers it their job and not their hobby. If you are considering using a family/friend/neighbor new to the business, ask yourself if supporting them is worth at least $1,000 to you (and that’s probably a conservative number).

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The fact is, seasoned agents know their sh*t (what the value of the house is, how to negotiate an inspection, which professionals you may need post-close), and new agents don’t have that confidence or those resources.

To help prevent you from working with the wrong agent (and potentially losing money), I recommend asking an agent these four questions when deciding if you should move forward.

How to Choose a Real Estate Agent: Important Questions to Ask

1. How will you communicate with me?

Prior to being an agent, my experience with buying a home was that it was intimidating. There are a lot of decisions to be made, there is a lot of money on the line, and it’s something I had never done before. Because of that, I think it’s really important that your agent is in communication with you constantly: these are the next steps, this is what that term means, this is what I think the other side is thinking, etc.

If you’re having to hunt down your agent, that’s not a good sign. Remember: you are paying them, and your relationship should reflect that.

Related: 7 Signs of a BAD Real Estate Agent

2. How many deals have you done in the past year? Where? And what type of property?

Okay, so that’s three questions, but they’re all getting at the same general info we want to know: how experienced your agent is and what that experience looks like. Obviously, more experience rather than less is better, but I feel like someone with 10 or more deals should at least have a good understanding of the process and patterns.

Real estate agent handing the house key

3. How did your last three inspection negotiations go?

This is the most important question you can ask an agent, because it will tell you two really important things:

1.) What they consider their job to be.

2.) How hard they’ll advocate for you.

Specifically, my job is to help you make a responsible financial decision—and that often comes out in how much we pay for the house and how much we get back in negotiations. Take this with a grain of salt, because I work in Denver and Colorado Springs. Regional prices, of course, differ. But at a bare minimum, you should be getting back $1K during inspection.

Related: 3 Tips for Finding a Real Estate Agent (for Investors!)

4. How long is your contract?

Denver real estate agents and their clients formalize the relationship with an “Exclusive Right to Buy.” This is the contract that states you are working together and that the client is not working for anyone else. Most agents want them signed; in fact, an agent who doesn’t want one signed is probably not very experienced.

It can be difficult to want to commit to someone though when you are just getting acquainted. For that reason, I recommend three month intervals. It’s enough time for both sides to establish if they like working together and if they should continue to work together. 

The Bottom Line

Real estate agents (somewhat deservedly) get a bad reputation. It’s a profession with a low barrier to entry and historically terrible customer service.

That said, there are plenty of agents who take working with you very seriously and are very good at what they do. Don’t settle until you find someone like this. 

Sources

  1. https://www.westword.com/news/denver-has-many-more-real-estate-agents-than-real-estate-listings-9002254

What do you look for in a real estate agent? 

Share your opinion in the comment section below.

Erin Spradlin co-owns James Carlson Real Estate. She loves working with first-time home buyers or sellers because it is fun to help people realize their dreams and loves working with investors because she's a fellow spreadsheet nerd. In addition to working with clients on buying and selling real estate, Erin Spradlin also runs Denver Women Invest, a monthly female investing group (email her if you want in!) and educational classes on Airbnb investing and buying or selling your first home. In keeping with many successful real estate investors, James Carlson Real Estate believes strongly in giving back to the community. For that reason, Erin and James donate a portion of their commission to a charity of their client's choosing on every single transaction.

    Nina Grayson Real Estate Agent from Los Angeles, CA
    Replied 28 days ago
    Some good points here, Jessa. While Colorado is a different market than Los Angeles (I lived in Denver for 18 yrs), the points you make about negotiation and Buyer Representation Agreement (CA), are spot on. There is a great deal of work agents do to find Investors properties - it's not just a search on the MLS, and it's not just connecting with our off market network. We have to door-knock distressed owners, we have to go to Wholesaler meetups, we have to scour theMLS for the properties no one else wants and negotiate with the listing agent by presenting our buyer's reasonable offer terms to see how low their seller is willing to go. For Investors who are selling their flips, if they want it to sell, they need to pay me - period. Now, I do give them a break since it's all about ROI, but still, a lot goes into marketing, responding to inquiries, and showing a flip listing, and negotiating the deal. And then there's negotiation. It's not just about the price. It's about the entire deal. For the buyer, the inspection and appraisal are the point for negotiation in value of the property. But it's not just about the repairs and potential issues, its about how those fare against the market location and potential return. It's about knowing how to make it work for everyone in terms of value and time, and knowing what represents a greater loss versus a greater return in those areas for repair or seller credits. I have a business - Real Estate Investing - and part of that business is Sales for other real estate investors. It makes a difference to have a strong Agent on your REI Team! Thanks!
    Erin Spradlin Real Estate Agent from Denver, CO
    Replied 28 days ago
    Thanks, Nina. Not sure why it shows Jessa as the author article, but I wrote it so I'll respond. :) I think good real estate agents are worth a lot- they communicate, they protect you from the process and possibly yourself, and they guide a very big decision... but people understandably have some reservations about what we do. I think you nicely outlined some of the ways agents help investors and why there is, indeed, work involved. Thanks for the comment!
    Michael P. Lindekugel Real Estate Broker from Seattle, WA
    Replied 28 days ago
    if they claim to be an investment specialist, then make sure the have the requisite education, skill set, and experience to analyze financial statements and correctly calculate ROI using discounted cash flow analysis techniques.
    Erin Spradlin Real Estate Agent from Denver, CO
    Replied 27 days ago
    I totally agree! And someone below makes the point that if they have their own investments wherever they are telling you to go, that is also a good idea- and I think putting your money where your mouth is is definitely a solid proof point.
    Fahima Hilal Real Estate Agent from rutherford, New Jersey
    Replied 28 days ago
    As an agent myself, I would also think -if the Agent has bought properties for himself or herself or is an experienced investor , thats a great combo right there!
    Erin Spradlin Real Estate Agent from Denver, CO
    Replied 27 days ago
    I 100% agree. Knowing that someone is doing what they are telling you to do should inspire some confidence.
    Doug Harrings
    Replied 27 days ago
    As a Realtor in the Raleigh, NC market, I don't believe a setting a minimum amount for negotiated repairs is realistic. North Carolina property is sold "as is". We have some transactions where no consideration can be negotiated because the seller is prepared to move on to another buyer. We prepare our buyers for this possibility so they can factor it into their offer.
    Erin Spradlin Real Estate Agent from Denver, CO
    Replied 27 days ago
    That's fine. I think it's a case by case basis, but I also think it's very important the agent communicate that to their clients, set expectations and also back it up with fact. Too many times I see inspection negotiation get shrugged off, and since it's a major area where you can save clients money- I think it needs to have more gravity and higher expectations as far as the return.
    John Barnette Investor from San Francisco, California
    Replied 26 days ago
    And as a good agent representing a seller, you should emphasize having good thorough property inspections done ahead of time to provide to buyers. This most serious offers don't have inspection contingencies and double negotiation. Most agents in the Bay Area do this