Whether you are renting or buying, you want to have a good real estate professional to represent you. Now, you always should have an experienced real estate professional assist you in any purchase transaction, and probably a lawyer too, but when leasing the need can vary. This is because in many cities renters may not need guidance from a licensed real estate professional. They may just negotiate directly with the landlord, and that is probably okay because it’s a pretty low risk and standardized transaction for the renter in most cases.
Note to renters: Just make sure you take the time to read the entire lease and determine that you are agreeable to the terms. If you don’t understand or do not like the terms, do not sign it until you are satisfied with the agreement.
However, in times when you do need a professional, here are a few tips to help you get the best-matched person who can assist in your real estate transaction.
The most important item to remember is that a real estate professional’s job is to show you property, help guide you in the process, and try to get a property you like into escrow or into a lease agreement. Then, their job is to help you close the transaction. But they are not necessarily going to make sure the property is suitable for you, or do due diligence for you — that is your job. You are the one who will be living there and so you need to make sure the property is right for you and do all the steps to reduce the risk of something going wrong. In general, sales professionals earn a living closing real estate deals and getting paid commissions, not putting up roadblocks to your signing the agreement.
There are several things to look for and consider in selecting the real estate professional to represent you in a transaction. Experience is key, as real estate is a learn-by-doing process. We suggest that an experienced purchasing agent should be closing at least five property transactions per year. Leasing agents should be doing a lot more transactions than that, but many leases are pretty straightforward, not like a purchase transaction. So again, for a lease, you may not even need a real estate professional as long as you carefully read the lease before signing!
When purchasing real estate, another issue you should understand is that most states do not require much training, guidance, practical experience, or cost to become an sales agent. This means there are many part-time agents who only do one or two deals per year, so it is unlikely they are going to be experienced enough to really do a great job for you. Ask prospective agents how many transactions they closed in the past few years, or who is guiding them and what training they have had. You want an experienced agent to represent you.
Also, whether leasing or purchasing, you want to get some references from the recently closed transactions and call those references to ask how the agent performed for them. Far too many people fail to call even a few references on the agent who is going to be working for them, so take a little time to do this.
When you interview an agent for the job of representing you, you should find out how well they know the location of where you want to purchase or lease property. If the agent has no familiarity with your targeted area, you should find an agent who does.
Lastly, if you are buying, even though the agent isn’t going to do your due diligence for you, they should be able to give basic advice on how you can better protect yourself. These are things like ensuring it makes financial sense to own, how to get a fair mortgage deal, how look at the HOA records, how to review your title policy, and how to procure the proper type and amount of homeowner's insurance. But again, that is your responsibility to educate yourself on those issues and make good real estate choices.
The agent you use should be someone you can trust and feel can do a great job getting a property under contract for purchase or leased for you. An agent who has a good handle on these issues and experience is going to be a good choice to represent you. Interview several, find the best qualified, and stick with them through the process!