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According to the National Association of Realtors, there are approximately 2 million active real estate professionals in the United States. Real estate is a multi-billion dollar business, and buying a home is an important transaction. The pressure understandably gives pause to both buyers and sellers. In fact, a reported 68% of Americans surveyed do not trust their realtor, according to a 2013 survey by Choice Home Warranty. Why? The average buyer or seller has been led to believe that there are things your realtor won’t tell you.
While this is somewhat true – for example, there are certain things that your realtor cannot legally tell you – your typical realtor is an honest, hard-working individual who is trained and committed to look out for their client’s best interests. In fact, in any real estate transaction, a realtor is responsible to provide superior service by following the Code of Ethics. The Code, as it is often called, requires the following:
- Realtors must promote their clients’ interests while treating all parties fairly
- Realtors must not discriminate based upon race, color, religion, sex, handicap, familial status, national origin, or sexual orientation
- Realtors must remain truthful in all advertising and marketing, including when listing a home for sale
SPILLING THE TRUTH – The Top 9 Things Your Realtor Won’t Tell You
The Code has done wonders to tame the previous Wild-Wild-West nature of real estate, but as previous statistics showed, people still have their doubts. Can you really trust your realtor? Or is he or she just looking to collect a commission check and head for the hills?
As a part-time realtor who loves serving buyers, sellers, and renters, I will outline 9 things your realtor won’t tell you – but I will!
1. You Should Interview Your Realtor
Before you choose a realtor, whether as a buyer or seller, It is important to know the following about a realtor:
- How many buyers and sellers with which they typically work at a given time
- Whether they work as a part of a team
- How well they personally know and understand the areas you have targeted (if you’re a buyer)
To be transparent, no realtor wants to be interviewed by their potential clients! It can be intimidating and even feel a bit unnatural, but it is vital to ask the right questions. The purchase or sale of a home is one of the largest financial transactions you will ever make, and it is important to have a knowledgeable, committed, and available adviser in your corner.
2. Zillow Is Actually Useful
Inevitably, if you gather a group of realtors together, it’s only a matter of time before they start complaining about clients who rely on Zillow as if it were The Gospel. Truthfully, though most realtors tend to pour out hate on Zillow, it can be helpful.
For example, when I begin working with a buyer who has spent time searching on Zillow, I know that they have likely developed an idea of what they are looking for in a new home. By looking at hundreds of homes and thousands of pictures, it becomes easier to create a wish list, even if it may not be 100% realistic at this stage.
Zillow is also a good tool for casual buyers who are just interested in window shopping. However, Zillow data should not be trusted in most cases. It is often outdated (in some cases by nearly two weeks), inaccurate, and sometimes hilarious, as any realtor who has viewed an absurd “Zestimate” can tell you.
So keep using Zillow for window shopping, but when you get serious about buying, don’t bother. The data your agent pulls from the local Multiple Listing Service (MLS) is the only data you can trust.
3. Pre-approval Is Everything
If you’re a buyer and one of the first questions your agent asks is “Do you have pre-approval?” you have found yourself a winner! By asking this question, your agent is protecting his time and best interests, but he is also doing the same for you.
Written and signed notice of pre-approval from your lender is must if you want to be taken seriously, especially in a hot market. Without pre-approval in place, you could waste your time viewing homes which you cannot afford, find a home only to have another buyer’s offer accepted because they were pre-approved and you were not, or worse – you could discover that your credit history or debt to income ratio makes you ineligible for a mortgage!
Before you seek pre-approval, it is important to review your credit history. I recommend that you pull a free credit report to be sure no surprises or errors ruin your chances for a timely pre-approval. I recommend MyFreeScoreNow.com for this purpose, and they are – you guessed it – FREE!
When you are ready to seek pre-approval, it is advisable to gather multiple quotes from a variety of lenders. Don’t worry – this will not damage your credit! I recommend Lending Tree as an option for my buyers because they provide personalized rates with a variety of options to meet a buyer’s lending needs. They have facilitated over 55 million loan requests, and they work quickly to get buyers pre-approved.
I have also had buyers who had good luck with SoFi. If you have good credit (700+ credit score), you may be able to save money with them. Contrary to what many realtors will tell you, SoFi works with buyers who have down payments as small as 10%.
4. This isn’t HGTV – it’s Real Life!
Touring a home like people do on HGTV doesn’t cut it. Most of those people are actors! Even if they’re not pros, they are being coached to say certain things and ask certain questions.
I like HGTV as much as anyone, but you must remember that it is all about entertainment value. When you are a serious buyer, you aren’t looking at houses to be entertained – this is important, so act like it!
Open closets and cupboards, check out the unfinished basement and look for cracks, and go walk around the yard. You’re not a professional home inspector, but you can save yourself a lot of stress, heartache, and money if you perform a DIY mini-home inspection prior to the true inspection.
5. You Can Request Multiple Showings of a Home
Yes, it is true: you can ask to see a home a second, third, or fourth, time. And, yes, it is equally true: your agent won’t like this. But you should do it if you’re at all on the fence. The additional 15-30 minutes of time are worthwhile for everyone, so don’t be afraid to advocate for yourself and tell your realtor what you want.
Among the things your realtor won’t tell you, this item is fairly inconsequential, but it is good to know that you’re not out of line in this request.
6. There Are No Stupid Questions
In real estate and in life, there are no stupid questions – other than the ones you don’t ask.
In short: ASK QUESTIONS! Your realtor is an expert on the home buying and selling processes. If you don’t ask questions, you won’t receive the best possible service.
No, realtors don’t always have all of the answers. If you are asking good questions, most of the time we will have to get back to you.
7. You Will Learn As You Go
The process of buying a home is a learning experience. While you should determine needs vs. wants before your first home tour, we know that you will probably still be feeling out this process during the first several tours. It is a good practice to keep a check list of features that you desire and review it while touring homes.
8. It’s OK to Buy the First House You See – Sometimes
A good buyer agent shouldn’t push you into a quick offer, but if the home meets your expectations, is priced right, and is in a hot market with lots of competition, you should move fast.
Our team hates to see clients walk into the house of their dreams and decide to “wait it out” for more options because it often leads to disappointment. It happens far too often all because buyers haven’t reached a point of emotional readiness needed to buy.
9. Your Attorney is More Important Than Your Realtor
In most states, your attorney is more important than your realtor. While your realtor is there to advise your search process, complete offers using fillable form contracts provided by their local professional associations, and negotiate on your behalf, your attorney holds far more power. He or she is your last line of defense in protecting your legal options, modifying transaction documents, and in some cases, facilitating the closing process.
Your realtor is always happy to recommend a quality attorney who will facilitate a smooth closing, but virtually any experienced real estate attorney would be a wise choice.
YOUR NEXT MOVE
If you’re planning to buy or sell a home, you need a committed, available, and connected realtor on your side. With nearly 2 million real estate professionals currently working in the United States, you’re sure to have your choice among many quality realtors. With pre-approval in hand and in the guidance of a good realtor, the home search can be a pleasant process.
Throughout the process of hiring a realtor and buying or selling, put your trust in your realtor. Though there are things your realtor won’t tell you, he or she has your best interests in mind and wants to make the process as smooth as possible.
Readers, do you have a realtor you can trust? Have you had any poor experiences with a realtor?
Vicki@MakeSmarterDecisions says
February 23, 2017 at 7:39 AMGreat post! We are planning on selling our house later this spring and we already have an agent. I love these tips though – especially the HGTV warning! As potential buyers, people also have to be realistic about what they will see in a house. They watch professional flippers make a house look perfect and then want every house they walk into to look like that. I really appreciate your advice about an attorney too. Invest a little extra there for sure!
Hero says
February 23, 2017 at 7:57 AMLeave it to the authority on making smarter decisions to already have an agent! 🙂
Also, I feel I should clarify the remarks about the attorney. Depending upon the normal functions of a real estate transaction within one’s state, an attorney may not even be necessary. In most states, at least to my knowledge, attorney fees tend to be in the neighborhood of $450-$750. I believe you tend to get what you pay for in most cases, but unless you have a complicated deal involving a condo, back dues owed to an HOA, or other unique issue, your average real estate attorney will do a fine job.
Physician on FIRE says
February 24, 2017 at 1:28 PMI was wondering about the attorney endorsement, too. I’ve bought five homes, sold three, some with realtors, and some FSBO. That’s eight transacations, 16 parties, and not once has an attorney been involved.
Best,
-PoF
Hero says
February 24, 2017 at 2:11 PMThanks for sharing your experiences with the rest of us, PoF. I don’t understand why each state maintains such vastly different protocol for real estate transactions. NAR doesn’t shed much light on the issue, from what I’ve read. In many states, like Illinois, for example, I think a FSBO would be an absolute nightmare. It’s definitely doable, but I would be hard pressed to recommend it. In other states, like Wisconsin, I’ve heard it is very easy.
Vicki@MakeSmarterDecisions says
March 4, 2017 at 9:05 AMThis came from one of my readers – I guess it thought she was a bot. I am copying it here for you 🙂
“I linked to this post from Vicki’s blog. You have made some great points! I come from a family of realtors, and have bought (and sold) a number of houses. I have worked with some really excellent realtors over the years, and only a couple who were not so great. As I like unusual houses with lots of character more than typical family houses, I have found that in addition to being hard working, professional and ethical, I also look for a realtor who is compatible and willing to show me many houses.”
Jude
Hero says
March 5, 2017 at 7:16 PMThanks for sharing the comment, Vicki. Jude raises a good point – the realtors who are prepared to show you many homes are usually the keepers.
Mrs. Picky Pincher says
February 23, 2017 at 8:11 AMWe went through four real estate agents before we bought our home. I’m sure there are good agents out there, but most of them are in it for quick money. We could hardly get anyone to give us the time of day since our budget was small for our first home. Several realtors tried to convince us to buy crappy houses we were obviously not interested in.
We used referrals for each one, too, so referrals don’t always ensure good service. I love the suggestion to interview your realtor first. There’s nothing like wasting time (and money) on someone who isn’t really there to help you.
Hero says
February 23, 2017 at 8:18 AMRealtors like the four you worked with give the rest of us a bad name. I’m disgusted to hear that you were treated so poorly, Mrs. PP.
It sounds as if those agents may have been desperate to complete a sale. While many people suggest avoiding part-time agents, I think that lack of desperation is a great quality of most part-time realtors. If they have another income stream which they are able to rely upon, they won’t try to strong arm a buyer into a poor purchase.
Erik @ The Mastermind Within says
February 23, 2017 at 9:00 AMI was lucky enough to find a great realtor right away – well, after talking to about 10 others on the phone… those realtors are ruthless!
I tend to ask a lot of questions when I’m in front of other professionals. By asking a lot of questions, you can gauge their level of expertise, but also how committed they are to getting you the best deal. If they seem aloof or uninterested, I’d dump them!
Hero says
February 23, 2017 at 9:05 AMThat’s incredible diligence, Erik! Most buyers and sellers rush to the first agent who is recommended by a co-worker or family member.
And I think you touched on a very important point – expertise is great, but not without commitment, much in the same way that knowledge is great but is even better with proper application. A third key that goes hand-in-hand is timely communication, as you mentioned – the aloof and uninterested realtors are the ones with poor communication habits!
Ryan - JustAnotherDollar says
February 23, 2017 at 10:59 AMI’ve always been the type to become well-versed in anything I’m trying to do, so it’d be right up my alley to get my RE license to go out and buy a house. Glad you shared these tips, it’s good to hear that it’s possible to find a competent RE Pro and what to look for when considering who to work with. I’ll keep this list in mind as we power through our mountain of debt and get ready to buy our first property. Thanks for sharing!
Ryan
Hero says
February 23, 2017 at 11:18 AMRyan, you should absolutely go out and get your license if you’re even remotely interested. I think real estate is one of the best side hustles for virtually anyone to get involved.
I was on the fence for many years about it, and over time, I kept meeting more and more people who were part-time and full-time realtors. One friend who is strictly part-time earned over $50,000 with her real estate side business last year. I’m not quite there myself, to be honest, but things look to be trending that way. It’s amazing how word spreads if you take care of your clients and look out for their interests above your own.
You could really plow through your debt mountain in record time if you had an extra $1,000-$2,000 rolling in each month, I assume. Let me know if you have any questions about how I got started in RE!
Mrs. BITA says
February 23, 2017 at 2:57 PMI love the realtor we used to buy our home. She was recommended by two friends who had used to her to buy their homes, and in my opinion that is the best way to find a good realtor – if people you know and trust can recommend somebody, it will likely end well.
Hero says
February 23, 2017 at 10:02 PMTrustworthy referrals are often the best way to find a good realtor. I’m glad you had a good experience with that route, Mrs. BITA. My only word of caution regarding references is to be sure to ask lots of questions. If the first answer to a question like “Why would you recommend Mrs. Realtor?” is “Oh, she’s my friend/cousin/fifth cousin twice removed” that could be a red flag.
Amanda @ centsiblyrich says
February 23, 2017 at 8:55 PMFantastic post!!! We recently discovered that the realtor we used to sell our last house wasn’t necessarily the one we should use to find a rental property. While the first realtor was excellent and helped sell our house in 2 days, he wasn’t as interested in finding us a fixer upper to rent out. We are now working with a realtor that is also an investor himself (for many years), so his feedback is valuable when we tour potential properties. I do check Zillow – and then I take that info and go ask the realtor his opinion (mostly on rent).
Hero says
February 23, 2017 at 10:06 PMThanks, Amanda, and this is a very good point! Having worked with both traditional buyers and investors, I can confidently say that it is an entirely different ball game. A good realtor will take this into account and truly listen to what his client is looking for and help her find exactly that.
As I said, I think Zillow is often a poor source for finding comparable sales data, but it can be quite useful for rental purposes. The number of investors who rent their properties without the use of an agent is on the rise due to ease of use of technology like Zillow. Even if you are trying to price a new rental, Zillow can help you land in the right ball park.
The Green Swan says
February 24, 2017 at 4:06 AMGreat post, Finance Superhero. Nice to hear the skinny from a realtor. We are happy with the home we live in, the first home we’ve bought, but I wish I would have followed some if the tips you gave. We only viewed our house once (we had to move quick) and I never inspected it closely myself. Fortunately there has been no buyer’s remorse for us!