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How to Find the Best Realtor and Compare Properties
Buying or selling any type of real estate is a complex and difficult process, but you can make it much easier on yourself by employing a few simple strategies and doing lots of research ahead of time. Here are the essential steps to keep in mind when conducting a real estate transaction.
How to Find a Realtor
Whether you’re buying or selling a home, empty lot, or business property, choosing the right realtor for your needs is crucial. As with any major task or project, the first stepping stone to success is lots of research.
- Before doing anything else, it’s important to thoroughly understand your own goals, as well as your own strengths and limitations as a buyer or a seller. If you want to buy, securing a pre-approval for a loan and compiling a list of properties you’re interested in (and can afford) will make the next steps much easier on both you and your realtor. Sellers would do well to order an appraisal of their property and make sure it’s in tip-top shape before entering serious talks with an agent.
- Search for realtors, online and in local print directories, who specialize in the type and price range of properties you’re looking to buy or sell.
- Further narrow your search by reading client reviews online on consumer advocacy websites or in real estate publications for your area, and by meeting several realtors for in-person interviews.
Once you’ve found a realtor you’d like to work with, be prepared with a list of questions to ask. In addition to the questions below, also bring up any concerns or uncertainties related to your specific situation at the first meeting.
Specific Questions to Ask Your Realtor
There are five questions you should always ask before deciding whether to hire a real estate agent.
What are your credentials?
The basic certification process for a real estate agent is 2-3 months long, and there is a great deal of information to become familiar with. Ask about their on-the-job experience as well as the training they have completed. There are dozens of real estate certifications, but some of the most common ones to look for include Accredited Buyer’s Representative (ABR), Seller Representative Specialist (SRS), and the prestigious Certified Residential Specialist (CRS). This last certification is granted to experienced realtors with above-average sales.
How long have you been in business?
A more experienced realtor is more likely to be capable of providing excellent service, but someone new to the profession could still be a good match, depending on your priorities. If the transaction you’re interested in conducting is relatively simple, consider hiring a newer realtor who may be willing to accept a lower commission.
What is your commission rate?
If the real estate agent you’re considering works for a firm or agency, their commission rate is likely fixed and non-negotiable. Independent agents have the power to lower their rates, if you can convince them that a smaller commission will still be worth their time and expertise.
Can you show me some listings you’ve recently closed on?
This can be helpful in determining if your realtor is a good match for you. If you’re interested in spending $800,000 on your lakefront dream home, you may not want to work with a realtor who has primarily bought and sold $150,000 starter homes.
What is your marketing plan for my specific needs?
Buyers should ask for information on how the realtor intends to search for homes relevant to their needs, how many properties they can expect to see, and how the realtor intends to handle multiple offers or fierce competition from other buyers. Sellers will want to know whether the realtor will favor “carpet bombing” or a more focused approach to finding qualified buyers; it is also important to discuss how involved the seller will be in preparing or showing their own home.
Once you’ve completed the initial process of interviewing your realtor and signing an official agreement to work together, the next step is to look for properties to purchase (for buyers) or to do some research on properties similar to your own (for sellers).
Types of Property
There are three main types of properties that comprise the vast majority of real estate transactions.
Empty land is, of course, less expensive than the same piece of land with a structure already on it. Vacant lots are often ideal for three particular kinds of buyers
- Budget-conscious home buyers interested in building a simple home on cheap land. Purchasing land in more remote areas can often result in even bigger savings, provided less convenient access to urban areas isn’t an issue.
- High-earning buyers looking to build expensive custom homes to their exact specifications.
- Those interested in building certain types of commercial properties, like warehouse or storage facilities and industrial buildings. In many cases, if you expect employees or suppliers, but not customers, to travel to the location, a cheaper, more remote location may be ideal.
Existing homes are usually more affordable and much less of a headache for buyers, compared to custom builds or vacant lots. Custom homes come in three types.
- Truly custom homes are one-of-a-kind and are built by architects and contractors to the client’s exact specifications. This is the most expensive and most time-consuming way to build a home, and is subject to the most bureaucracy and interference from government agencies. However, buyers with a particular vision for their home and the budget to afford it may find the end result worth it.
- Spec homes are built by builders in small batches with the specific goal of selling them. They are often more affordable than custom builds while still offering some customization options, particularly for buyers who buy during the planning or construction phases.
- Tract homes are built in large numbers according to pre-drawn plans. They are the least customizable homes, but also the least expensive.
A commercial property is any non-residential property that is in any way part of a business operation. There are many types of commercial properties. Some of the most common examples include:
- Retail locations
- Strip malls/shopping malls
- Production facilities
- Corporate offices
If you are interested in purchasing or selling a commercial, be sure to work with a realtor highly experienced in such transactions, as they are much more complicated and subject to many more laws and regulations than vacant lots or residential properties.
How to Compare Properties
Ensure you are comparing apples to apples and looking at properties with similar characteristics.
- Consider the age, size, condition, and location of the property, and remember that none of these factors exist in a vacuum. Even two properties right next to one another might be listed at vastly different prices, since location is not the only relevant consideration.
- Look for significant improvements (or significant damage) to the property, as well as unique features that may justify a higher price, such as a beautiful view of the ocean or unusually low property taxes.
- Remember that the value of a property is somewhat subjective, particularly for home buyers who intend to live there themselves. Buyers may be willing to pay significantly more for features that are especially important to them, and less for things that aren’t. The assessed and market values of a property are best understood as averages or guidelines.
How to Monitor Real Estate Trends
Buyers and sellers both benefit from staying up to date on the behavior and trends of their local markets. There are three basic ways to do so.
- Look at historical data in your area for similar types of properties and observe the general trend (upward, downward or static).
- Don’t underestimate how useful markets outside your own can be. For example, Oregon’s real estate market has historically mirrored California’s market very closely, lagging behind by 1-2 years. Learning which other markets behave similarly to yours can be a valuable forecasting strategy.
- Periodically check in with the “other side.” Buyers should do some research on factors especially important to sellers in their area in order to better understand what may be asked or expected of them. Conversely, sellers would do well to understand what buyers are looking for at any given time and strive to ensure their properties meet those needs.
For the unprepared, buying or selling real estate can be a major source of stress and frustration. By thoroughly understanding your own needs and expectations, and considering them in a realistic context, a great deal of stress can be eliminated. Consistently doing your due diligence will make the process even easier, and in many cases, can lead to a virtually painless transaction.