Choosing Estate Agents
Whether buying or selling real estate interest, choosing the right real estate agent is one of the most important decisions you will make during the conveyancing process. In an industry which has seen a doubling of agent numbers over the last five years, the initial choice can seem abroad and daunting one. Some of the key factors to consider in the search for a reliable and trustworthy agent are:
Behavior/Relationship
Working with people that treat other people well and using agents with good established relationships is more important than using those who want to maximize their profit and burn Relationships on the way.
A good agent sees the deal from the owner’s perspective and a good relationship is the key to know the investor’s needs and interests. Professionalism is a factor that every investor sees as obvious when making deals. It is a lot about high business moral and treating people the right way. It is not only the relationship between the investor and the agent; it is also the agent’s relationship to the third party. The agent is the connection between the investor and the other party and treating people the right way can create the difference between making a deal or not. If the agent does not treat someone correct, they will remember that and may not make more deals with the agent, or worse, with the investor.
Competence
Competence is a factor necessary for agents, and it is equally important to the investors, but they seek for different kinds of competence. Some say they are looking for agents with narrow and deep competence in the area the investor requires right now, whilst others say they prefer to engage agents with broad competence and knowledge about several areas within the real estate industry.
Nowadays, companies with a more complex structure increase the demand for knowledge about taxes to make a good deal. It is not only about being a good sales person, even if that is still a big part of it. The real estate industry has a notoriously high workforce turnover and, consequently, many estate agents operating today will be relatively new to the business. In a transaction which is likely to be one of the biggest of your life, it is advisable to seek out those with experience and knowledge. Those agents that have been active in your geographic area for a long time, for example, will have a greater knowledge of the nuances of the local market. As well as knowledge and experience of the location, your agent should have an extensive knowledge of the real estate business itself. This may sound obvious but many agents do not. Most people have the perception that an agent doesn’t do much other than take people’s details, place an advert in the newspaper and then sit back and wait for the offers, and their commission, to come in. A good agent does much more than that. He should have knowledge and experience of the entire process so that he can guide and advise people throughout. For example, there are a lot of first-time buyers coming into the market who know little more than the fact that they want to buy a house. Our agents will advise on the whole process such as getting pre-quailed for financing so that they know what price range they are working within. From a selling perspective, again an agent should be able to inform the vendor of the entire process, what he is going to do to sell their house; what happens when a buyer comes in; the whole process. An agent should be happy to sit down and explain the conveyancing process and requirements and the state of the market in the area. If he/ she does not have the time, or the knowledge, to do this adequately then it is advisable for an investor to look for someone who does.
Flexibility
To be flexible in a deal can mean several things. Creativities are an important characteristic; the agent needs to be innovative and able to come up with new ideas if a deal gets stuck. They have to be able to handle complexity and change the deal after changed conditions. Agents who are good at recognizing possibilities instead of problems are highly sought after in the market.
Price/Fee
This factor is without a doubt the lowest rated factor among investors. That the fee is not crucial when selecting a real estate agent is a common opinion and there exists many reasons for this. With the cost of living ever increasing, it is tempting to let your choice of agent be swayed by the commission rates they charge. However, this could often prove a mistake. Some agents will undercut others just to get your business, but they will rarely provide the same service, so you get what you pay for in the end. The agents participate in the creation of big values for the investors and they are therefore willing to pay them for that, but if there is no deal the fee is of higher importance. Quality is also important, the investors want a high price for their properties and a higher price can motivate a higher cost. The result is what matters to the majority of our investors. In big deals, the fee is just a small piece in the generated value for the investor, but it is still a lot for the agent. It is all about creating a “win-win situation” for both parties. A well functioning established relationship of trust is worth more than minimizing the costs by choosing the cheapest agent. You do not buy the cheapest in this business. Honesty and being pragmatic are some of the characteristics that agents are worth paying more for, according to some of the investors. Relationships are important and are almost all the time more important than the cost, but in different ways. Some investors are willing to get the agent they believe they have the best relationship with, even if he is more expensive, good relations is a security and therefore motivates a higher cost. Relationships can lead to a better chance for the agent to be offered the deal, but if his demand for payment is on a higher level compared to others, he needs to lower the price.
Even if the fee is of less importance it does not mean the investors will not try to keep the fees down. The fee is not the driver, but an element. The investors usually negotiate about the fee before the deal and can use the fee as compensation in a deal. If the price does not get as high as the investor demands, an agreement about lowering the fee can be made and the deal is done anyway. Not all investors negotiate about the fee every time, they usually pay normal fee, because they do not want a negative negotiation up front before the deal. Also they have good relationships with their agents and that the agents themselves know how much their work is worth and do not try to get overpaid.
Besides this, the rapidity of the transactions is also crucial because it is a risk factor. A speedy transaction reduces the risk factor and makes it worth paying the agent a higher fee. The fee is also used as an incentive to enhance agent‘s performance; a higher price for the property means a higher fee for the agent. There are also some investors believing the fee is of high importance. Reasons for this is said to be that when you have equally good agents and only the fee differs the agents from each other, then you can use the fee as a factor and choose the cheapest one, at least if it is an object that is easy to sell. Some investors said that the agents are too well paid, but none of the agents are willing to lower their fees because they know that the majority of all investors will choose their agents on other factors than the fee. Appoint. With track records one can easily see how different agents have performed before with certain types of properties in a particular market. In small markets, investors sometimes use local contacts to get an agent with a track record in that market. Although this approach may lead to problem, where the investor does not have an established relationship with the local contact, there exist a risk for not knowing if the contact person/organization has a form of relationship with the agent unknown to the investor. However, not all investors insist on the agent having a track record. To this class of investors, good market knowledge by the agent is enough. Most agents have a common believe that clients rely solely on track when selecting agents. With this mind set, some agents are known to have engaged in fraudulent practice of parading false track records of previous deals. As important as track record may be, clients are strongly advised to place higher premium on selecting an agent with whom one can build sound business relationship that is based on trust and integrity than having done a certain deal. However, the ideal practice should be where possible to appoint an agent who combines trust worthiness, and integrity of conduct with track record of previous performance. It is possible for a client to fish out this class of agent through referral. An agent may claim to have participated in an exercise in the past, but the baseline questions to ask are: (a) to what extent did the agent actually participate in such past job and (b) how crucial was his role in making the deal to occur? It is of higher importance that you have good relationship with the agent and can trust him/ her, than them having done a certain deal.
Trust
Real estate is an industry where reputation and trustworthiness are vitally important. If you hear of an agent being involved in any underhand dealings then it is best to rule them out such agency fimi when considering appointment of an agent. Clients coming into property market for the first time are encouraged to know that among Nigerian real estate agency practitioners, there are professionals who are highly competent, trustworthy and can be firmly relied upon. Such professionals (agents) are very ethical in their conduct and would rather prefer to forego a potential brief and the opportunity to earn income at the altar of ethical conformity. Business proposal from clients that desire under the counter dealings are usually rejected by this class of agents who are reputable for competency and integrity. They are often confidently proud to look over their shoulders in unethical professional briefs. To become a good estate agent to deal with, practitioners need to remain principled, ethical and above board, that’s how you will get those referrals in this business. Your agent should have a good track record and a professional manner. If you get a sense of caginess in any of his answers then it may be safer not to deal with him. Remember, there is no reason a good agent should not give open and honest answers to all of your questions. One very important point when it comes to integrity and professionalism is to ensure that your chosen agent knows how to handle deposits and has a client or escrow account specifically to hold your deposit in the event that he or she is nominated to act as Stakeholder for your transaction.
Trust is crucial for many of the investors. Individuals will only risk entering into incomplete contracts if they trust their trading partners to adapt to the unexpected in a manner that respects a fair division of economic return. The investors trust their agents most of the time, but it does not mean they stay loyal to a certain agent. This varies from investors that use the same agent all the time or have only a few to choose from to investors that always try to use different agents. The latter category of investors is hardly loyal in patronage to only one agent. However, to develop loyal patronage from such group of investors, an agent will have to be exceptionally efficient; always performing beyond the client’s expectation.
Nevertheless, an agent trying to win a client’s loyalty should realize that clients have different reasons for switching agents. Reasons for staying loyal or not is not only trust, it is also about creating more competition to try to keep the fees down and have more agents to choose between.
Variation with Property Type
Some investors that deal with different types of property want the agent who is best at offices when they are selling offices and the one being best at industrial when they are selling industrial. This plays a vital role in the selection process. An agent that is brilliant in selling offices may not have the right skills to sell industrial property for this reason; the investor may need to use another agent. Others say they do not vary their agent with type of property, but they may change agent according to geographical location.
Company Structure
The structure of the company sometimes affects the investors‘choice of agent. If it is a small estate, it will be rational to choose a small agency firm that will most likely accept the work as an important assignment than a bigger firm. This creates incentives for him and gives him the necessary drive to carry out a good deal.
Another very common opinion about the company structure is that the investors want a senior consultant because they have the largest network and more experience. On the other hand some of the young agents are more eager to make a deal and may work harder and in the end do a better job even at reduced cost due low operational cost. Some investors emphasized the importance for the company to have a good robust office facility that is duly staffed and sufficiently automated to ensure speedy service delivery. If the agency is too small it can create problems when certain key workers are absent due to ill health or the deal may just be too big for the company to handle it speedily enough to client’s satisfaction.
Network
When the investors believe their property is going to attract foreign buyers they may choose an agent in an international firm because of their access to an international network. For local investors, international connection plays a less important role when choosing agents.
The agents could use their international connections and look at trends in other markets and use that information locally. And international agents earlier, but those they are shrinking and local agents now are more like international agents.
Opinions about the differences that still exist are that the international agents are more professional and have better documentation whilst local agents are more down to earth. Local agents are said to be a bit slower in the process of solving problems, but are at the same time more flexible and keenly aware of the investors needs. International agents have larger network, but sometimes they are harder to establish a personal relationship with. In Nigeria many investors say that foreign buyers demand more from their agents and therefore the international agents are more careful, detailed and used to consume time.
Some of the investors say there are no tangible differences left and just because the agents are international they are not necessarily major market players. When doing cross-border deals it seems like investors prefer to establish relationships with local agent rather than using an international firm they know from their home market, the reason being local agents having better local knowledge.
Other services
Except for having a good back-office some investors like agencies having everything in-house so they can get all the services needed from the same agency. The agents are also more informed about the market if they have several services in-house. Others have a totally different opinion and think it is not such a great strength, rather it is a drawback and they do not want the agency to have valuation and management mixed with transactions. Some investors do not like agencies providing services where they represent tenants; they would prefer they stay loyal to the owners. It is fine for the majority of the investors if the agencies represent both buyers and vendors, but it is not the ideal case. It is all about trust; the investors are concerned about “Chinese Walls” separating the different departments from each other and know that information sometimes is finding its way around.
Several investors are of the opinion that it is “Irritating when they have a finger in every pie” and would prefer companies focusing on transactions. Those investors say there are too many services provided; they choose the services depending on who is best at it, not because they can find all services in the same company the transaction is a separate part, it is not stuck together with something else and it is just as easy to buy those services from another company. However the research is one service that many investors say they like the agencies to provide but there are also opinions that the investors themselves have better research and do not need to buy that service. Another reason for not buying research is to show that you do not have a lack of knowledge in-house.
Pro-active Work
The feeling that the agents come just to them with an investment opportunity can affect the investors’ choice of agent. It is very important that they feel that that it is do not receive prospects the agents send out to everyone, they shall conic to that particular investor because the property is tight for them. Many investors evaluate the work from pro-active agents giving them investment opportunities and if the agents are good in the end, the investors can use them when they want to dispose a property.
Competition
In general, investors do not use the same agent all the time, one reason is that they like to encourage competition and avoid monopoly in the market. There are even a few who try to help new agents enter the market. They try to give new agents easy deals to stimulate learning and the investors are then able to choose between more agents. “We owe it to the business.” This is certainly not everyone’s opinion, one investor says; “We would like new agents to enter the market to create more competition and give us a wider range of choices, but we prefer that they try on someone else first and do not use us as a guinea-pig”.
Knowledge about the Real Estate Agents
When it comes to the question about how the investors act when they are about to choose which agent to use for the transaction process, there exist different methods. Most of till it is about already established relationships, the investors only choose from a few agent that they know very well and continuously work with. It is also about collected knowledge about which agent is the most suitable one for the current property, “it is up to you if you want to be informed about the market”.
The real estate markets in both countries are relatively small and you live and act in the market all the time and therefore know the agents well. The track records of the agent‘s performances can easily be traced out in the market and when they are engaged by other investors you can benchmark their specific performance. These investors just have a brief discussion within the company about which agent is most suitable for the property in question and then a contact is established. Apart from this, they can also choose to contact a few agents and invite them for a tender as a selection process.
Evaluation
A few of companies put a lot of time into complete analyses of different real estate agents before they make their choice. In these analyses, the agents are evaluated in several areas such as competence, fee, market knowledge and track record among many others.
A clear pattern can be distinguished among the investors in their selection process. The institutions are the ones who do the closest evaluation of the agents before they make their choice. Institutions have a template that they are following each time they are appointing an agent, unless they are engaging them for an extended time period. Then they do the evaluation when it is time to renegotiate the contract for a new period of time.
For those who are new in the market, they need to do a lot more investigations and have interviews with different agents, things not necessary when you have been in the market for a long time and know the actor’s strengths and weaknesses. In a new market, the investors can also listen to recommendations and might use the recommended agent if they trust the source and they do not know any agents active in that market.
Qualification and Affiliations
There is currently no legislation governing the real estate industry in Trinidad & Tobago, even though NIESV has been pushing for this for a number of years. Whilst the industry remains subject to no direct legal restraint it means that anyone can establish a real estate agency without the need for qualifications or accreditation. This being the case, it is very much within the consumer’s interests to seek out those who are qualified and/ or afiiliated to organizations such as NIESV. This is a good way to filter out some disreputable agencies. Being a member of NIESV requires a certain level of professionalism and quality of sen/ice because the organization has its own rules and regulations which members adhere to. Some agencies do not want to become members because they have no desire to have any kind of structure or accountability imposed upon them. Often their agents will not have the requisite level of knowledge. They are very glib talkers but when it comes to the crunch, that’s when they will let you down because they are not in a position to give the customer what he needs. With members of NIESV, you know what you are getting, an agency that will give high levels of service to their customers.
Referrals/recommendations
One of the best ways to differentiate between agents is on personal recommendations and referrals. You will almost certainly know someone who has bought or sold a house recently; ask them about their experience and whether they would recommend their broker.
“You work hard for the buyer or seller so that he will have no hesitation in recommending you to other people. This is how a lot of our business is generated, through referrals. In fact we ask people who have dealt with us, if they are happy with our service, to tell others about us. If you are recommended by another person you are halfway to another sale because that trust aspect is already there. Referrals and recommendations give a good firsthand sense of the reliability and performance of an agent. It’s much better than just flicking through the Yellow Pages, which is how a lot of people pick an agent. “
Interviews
Even if you have had a referral, it is not certain that you will enjoy the same rapport with the agent as did the referee. You are establishing a relationship in which trust is a key issue so meeting someone in person is essential. Interviews are therefore perhaps the best way of determining which agent is right for you. “We always recommend people come in and talk face to face so they can get an idea of who they’re dealing with. Ask everything you want to know. A good agent will have nothing to hide and will give you all the information he has. Inquire about their techniques, what is the process of marketing your home, how would they go about it. Be prepared though, do some research of your own on the agency so that you come armed with your questions.”
“If you have a company and you’re hiring people, you don’t just talk to them on the phone, you invite them in for an interview; it’s the same thing. Meet them in person, only then will you know if you click or not.”
It is good to know also that once you have selected an agent you are free to work with that agent to view any property on the market, no matter who the main listing agent is. In other words, you can use one agent whom you trust to research the market for you and arrange all the viewings, even with third party agents – rather than make direct contact yourself with countless agents you do not know or who have not been recommended.
Customer Service and Commitment
We also offer services such as getting taxes organized and water clearances sorted out, that sort of thing. I have an employee almost entirely devoted to those types of tasks,” he explains. “As long as the customer provides the basic information we will sort out the rest and we don’t charge for that service. You save the customer that run-around, inconvenience and time, in what can already be a stressful process. ” As well as customer service it is important to establish how committed your agent is to you and your needs. How accessible are they, do they have voicemail, email or a pager, so that you can reach them if you need to talk to them urgently?
Conclusion
The search for a good agent can seem a potentially fraught one, but following a few simple guidelines can tip the odds back in your favour. Ensure geographic and industry knowledge; ask for qualification and affiliations and then verify their authenticity; get referrals and recommendations; do your own research and interviews, checking levels of customer service and professionalism; and don’t be swayed by temptingly low commission rates.
Doing the ground work upfront can save you a much headache later, and remember, buying a property is not like choosing a new pair of shoes. The sum involved is infinitely greater, and so is the potential risk. You have to feel comfortable with your agent; it’s a relationship you’re entering into. Trust is very important, so do your homework, meet with as many as you can and have confidence in your feelings.”
Working with Estate Agents
Here are protocols you can use while shopping for a home that will keep you out of troubles estate agents:
Understand Agents Work on Commission
* Very few real estate agents work on salary.
* Most real estate agents are paid. If an agent does not close a transaction, he does not get paid.
* Agents are not public servants and do not work for free. Do not ask an agent to work for you if you intend to cut the agent out of your deal. Keep Appointments & Be On Time
* Be respectful, use common courtesy and don’t expect an agent to drop what he is doing to run out to show you a home. You are probably not that agent’s only prospect / client.
* Do not make an appointment with an agent and then forget to show up.
* If you are going to be late, call and let your agent know when you expect to arrive.
Choose a Real Estate Agent
Decide whether you want to work without representation dealing directly with listing agents, or if you want to hire your own agent. If you decide to hire your own agent, interview agents to find whom you are comfortable. If you are interviewing agents, let each agent know you a stage. Never, interview two different agents from the same company. Distrust doesn’t do it. Do Not Call the Listing Agent if You Are Working with a Buying Agent Listing agents work for the seller, not the buyer. If you hire the listing agent to represent you, that agent will now be working under dual agency. If listing agents show you the property, the listing agent will expect in represent you. Listing agents do not want to do the buying agent’s job. Let your buyer‘s agent do her job.
Practice Open House Protocol
Ask your agent if it‘s considered proper for you to attend open houses alone In some areas, it is frowned upon to go to open houses unescorted. Hand your agent’s business card to the agent hosting the open house sometimes this agent will be the listing agent, but often it is an agent also looking for unrepresented buyers. Announcing you are represented protects you. Do not ask the open house host questions about the seller or the. Motivation let your agent ask those questions for you.
Sign a buyer’s broker agreement with buying agent
Expect to sign a buyer‘s broker agreement. It creates a relations ‘between you and agent, and explains the agents duties to you and vice versa. Ask about the difference between an Exclusive a non-exclusive Broker Agreement. If you’re not ready to sign a buyer’s broker, do riot ask that agent to show you homes. Otherwise, procuring cause may pop up. Ask your agent if he will release you from the contract if you become dissatisfied. If he refuses, hire somebody else.
Always ask for and Sign an Agency Agreement
Agents are required to give buyers an Agency Disclosure. Signing an agency disclosure is your proof of receipt. It is solely a disclosure. It is not an agreement to agency. Read it. The best and most practiced type of agency is the single agency. This mean you are represented by your own agent who owes you a fiduciary responsibility.
Make Your Expectations Known
If you expect your agent to pick you up at your front door and drive you home after showing homes, tell her. Many will provide that service. If not, they will ask you to meet at the office. Let your agent know how you want her to communicate with you and how often. Do you want phone calls, e-mails, text messages, IM’s or all of the above? Set realistic goals and a time frame to find your home. Ask your agent how you can help by supplying feedback. If you are displeased, say so.
Do Not Sign Forms You Do Not Understand
Do not feel silly for asking your agent to explain a form to you. It is his job. Many forms are second nature to agents but not to you, so ask for explanations until you are satisfied you understand. Do not sign forms titled Consent to Represent More Than One Buyer. This is never in your best interest. Find another agent if this happens. Realize agents are not lawyers and cannot interpret law.
Be Ready To Buy
If you aren’t ready to buy, you don’t need a real estate agent. You can go to open houses by yourself; call listing agents for showings — but be honest, say you are “only shopping”; look at homes online; but don’t waste an agent’s time if you aren’t ready to act. If possible, hire a babysitter to care for children who are too young to stay out all morning or afternoon touring homes.
Bring your checkbook. You’ll need it to write an offer because an earnest money deposit may be required to accompany your purchase offer.
