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Ask Adam: Choosing a Realtor

by ARLnow.com | April 24, 2012 at 12:15 pm | 2,992 views | 55 Comments

Editor’s Note: This periodic sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty. The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com. Please submit follow-up questions in the comments section or via email.

A reader asks: How should I go about choosing a Realtor to sell my house?

I’ve made my living off of referrals so obviously I am biased towards the recommendations of people you know, like and trust. But, let’s just say you don’t know anyone who can provide a good referral.

You could go old school and write down the names you are seeing most frequently on for sale signs near you home. Preferably, you would also get some feedback from the homeowner about their experience working with the Realtor.

Try Googling your neighborhood to see if there are some Realtors writing about your particular neighborhood. It’s a good way to preview their market expertise.

You may want to look at online reviews on Yelp, Google Places or Angie’s List. I think that Yelp would be my top choice. Yelp is developing into good source for finding Realtors based on reviews. It also allows you to search based on location to help filter out realtors who don’t specialize in Arlington.

Okay, so you have a few names, now what?

Recently I received an email from a homeowner I had never met before. He introduced himself and the home he and his wife were planning to sell. He then requested my response to the following questions.

  1. Do you work full-time or part-time as a real estate agent?
  2. How many homes have you sold in my neighborhood?
  3. How many other sellers are you representing now?
  4. Will you handle all aspects of my transaction or will you delegate some tasks to a sales associate or administrative assistant?
  5. What are your fees and are they negotiable?
  6. At what price do you think my home can sell given the current market?
  7. Can you give me a comparative market analysis (CMA) of recent sales in the area and homes currently on the market?
  8. What does your marketing package contain in addition to a comparative market analysis?
  9. Can I list the house with you for 60 to 90 days?
  10. Is your license in good standing?
  11. How many years of education and experience do you have?
  12. Are you also a broker and/or a Realtor?
  13. Can you provide me with the names and phone numbers of past clients who have agreed to be references?

I like this RFP approach. Before you invest any time meeting with a Realtor, you can get some of your basic questions answered. It’s a great way to narrow down the pool of Realtors you are considering.

I should point out that I am now working with the person who sent me the questionnaire inserted above and he let me know that he based the questionnaire off of an article he found on homegain.com.

Like the seller in my example, you will want to customize the questions you ask to fit your requirements. You should also have a general idea of the answers you hope to receive.

Once you have received answers from the Realtors you have queried, you should select the top two or three to meet with in person. Ask them to show you examples of the marketing they are currently providing to clients. Have them walk you through their pricing analysis and recommendations. You’ll also want to discuss commission and come to an agreement that you are all comfortable with. Be sure to ask if there are any additional fees that they or their brokerage will be charging you (i.e. admin fees). I think it is also important to review a “net sheet” to understand exactly what your proceeds will be after closing costs.

I hope this helps you find a Realtor you will want to work with and recommend for years to come.

Please keep the questions coming: adam@arbourrealty.com

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  • Ashton Heights

    I’d like to give a shout-out to Gabe Deukmaji who helped us find a beautiful home in Arlington. Weekend, Holiday (Thanksgiving!), day, or night; he was always available.

  • George

    Let the record show that I like the Ask Adam weekly segments. Good info buddy

  • 22204

    This is quite timely and helpful… I’m going to meet with an agent this weekend and I will ask these questions. Thanks.

    • JimPB

      Agree — good questions.

      An informative and helpful piece.

  • BC

    Doesn’t look contrived at all. I’m sure many readers ask these questions and I doubt the posts are done by him.

    • What?

      You think he has a staff writer. Realtors aren’t paid that much, buddy. He is a realtor, not an elected official.

  • WantonTaco

    How about i ditch the realtor and pocket the 2.5% in this tight profit margin market.

    Or how about i pay 2.5% on the profit portion only.

    In this area the buyer’s realtor and buyers alone are doing the real work.

    • BallstonNOTBoston

      Agreed. I’ve never experienced an industry (realtors/real estate) chock-full of such no talent hacks in my entire life.

      Redfin from here on out and before I get slammed from the usual suspects on these boards – no, I have affiliation with redfin. But I have dealt with several realtors and I’m amazed on the overall lack of intelligence in said field.

      • Meg

        The barriers to entry are very low, while the percieved earnings/actual work ratio is very high.

        • WantonTaco

          Yep. Ripoff. Id like to see a good FSBO article and stats. Sellers, skip the realtor, all you need is a good settlement company on your side. Give an incentive to the buyer to get them to go with your guy instead of the bank or realtors company.

      • DSS10

        They are not “no talent hacks,” they just don’t have to care. It’s that simple. They are not payed for talent they are paid for commissions and they way that things are structured now you have no alternative but go to their little cartel and get pay the fees. Before the internet, computers, and standardized state records you needed a Realtor and a title company but now you really don’t. Why is it that we don’t need all of these fees and people involved when we sell a car? Cars have liens, taxes and titles just like a house……. Just asking.

        • Helen

          Not sure what fees you are talking about with REALTORs, but we only charge commission and in some cases Admin Fees. If you do not wish to pay the Admin fee, say no. If you want to pay a lower commission then negotiate. Commissions are negotiable regardless of what a REALTOR may tell you.

  • Steamboat Willie

    Yelp? In the restaurant review industry, Yelp has a terrible reputation and has been exposed for shady practices regarding the creation of feedback and the placement of reviews.

    I’m not suggesting that real estate is equivalent to the restaurant world, but I’m skeptical of anything that Yelp does. Not trying to be disagreeable, but Adam listing Yelp as his top choice caught my attention, given the company’s sketchy reputation and questionable credibility. I would be interested in reading others’ thoughts on this.

    • Quoth the Raven

      I can’t see using Yelp to find a realtor. If I’m selling my house, I’m looking for a realtor that can get the job done. 9 times out of 10, that realtor will be someone familiar with the neighborhood, so they’re best able to answer questions about schools, parks, community, etc. So I would look for the person who’s sold a lot of houses in the neighborhood. I know that’s “old school” according to Adam, but if someone has had success in the market, why not go with that same person? Trusting your neighbors is better policy than trusting anonymous reviewers on a site that could very well be pretty sketchy.

      • Tabs

        I agree. I would not want the kind of realtor that “encourages” Yelp reviews either.

      • Tabs

        But, as with all Yelp reviews, you throw out the ones from people with 1 or 2 reviews, and pay closer attention to reviews from people who have reviewed a variety of establishments and services.

  • ArlingtonNative

    Two words…..Betsy Twigg. We have dealt with many many realtors over the years and Betsy is in a class of her own….no one comes close….and trust me – they have tried!

  • John Y.

    Dave Lloyd knew his stuff and actually worked for his sell-side commission (it was a short sale and needed to be worked). I couldn’t have been more satisfied and would highly recommend.

  • TuesdaysChild

    Pretty well written article.

  • Suburban Not Urban

    Talk to Kristin Usaitis, she did a marvelous job for us as First time buyers and everyone we have ever referred to her

  • Arlington Cat

    I never liked realtors, but one spent seven months working with my owner to buy a house. Sure, he got probably got 19 grand when all was said and done, but my owner kept changing her mind on him. He was one that had to work for this sale.

    Home prices in many parts of Arlington are stagnant and in some ares, like Fairlington, are actually still declining. Who would of guessed five to seven years ago you could get a 1500 ft. Fairlington condo in 2012 for under $350,000?

    • Tabs

      I would not have guessed that.

    • CW

      Well, 10-15 years ago I would have guessed you could get a 1500 sqft fairlington condo in 2012 for like $200k…

    • ArlingtonNative

      In 2002, I purchased my 1 bedroom condo (711 sq ft) in Fairlington for $140k. Five years later – I sold it for $290k and the crazy thing is that a year prior to that, I had a neighbor sell her 1 bedroom for $320K!!! Those were the days :)

  • truth be told

    Realtors are in the same category as lawyers and politicians as far as I’m concerned.

    • Steamboat Willie

      People who make sweeping stereotypical statements are in the same category as village idiots as far as I’m concerned.

    • TuesdaysChild

      Well, society can live without realtors. We will always have lawyers and politicians.

      Hopefully online marketplaces like ZILLOW will continue to develop, and eventually put realtors out of business; or reduce them to charging for services actually rendered (as opposed to large commissions for dubious services).

      • Helen

        Actually you can do that today. Just tell the REALTOR that you want to do a limited service contract and then designate the things you wish for them to accomplish and pay on a fee schedule.

    • drax

      Yes, everyone hates them – until they need them.

  • John Fontain

    In my opinion, the biggest thing (i’m being liberal in my wording) that most listing agents do is list the property in the MLS. After listing, whether your property sells is largely in the hands of buyers and buyer’s agents (and whether you priced it properly).

    Given that there isn’t much a listing agent can do to differentiate themselves when it comes to adding a property to the MLS, my focus when selecting a listing agent would be on the following:

    1. Does the agent have any advantage with respect to generating a larger gross sales price than other agents?

    2. Does the agent have any advantage with respect to negotiating skills?

    Nine times out of ten, listing agents have no special advantages with respect to either of these areas. There are a small handful of agents who have the ability to generate outsized gross sales prices, likely due to an extensive contact list of other agents and potential buyers. Again, this is the exception.

    If the answer to the above questions is no and no, then (a) the listing agent should either not be selected and the search for an agent with these advantages should continue or (b) the focus should change to selecting an agent based on who will take the listing for the lowest commission.

    When negotiating sales commissions, there are several important but ugly truths to acknowledge. First, buyers agents do not like to participate in the ‘discount’ world (i.e., less than the full 3% buyer’s agent split). Although buyers agents have a fiduciary duty to their buyers to help them find the best house for the money no matter what commission is offered by the various sellers, the ugly truth is that buyers agents will either not show listings with discounted buyer’s agent commissions or they will find a way to steer you away from buyer a property that won’t yield the full 3%. Not only do they not want less commission, they resent sellers who don’t offer the full 3% and, therefore, won’t ‘play’ on those terms.

    Why is that important? When negotiating your sales commission, you should negotiate down only the listing agent’s side of the commission. For example, say you want to pay less than the 6% ‘standard’ total sales commission. You should not structure your arrangement as 2.5% to the buyers agent and 2.5% to the listing agent. You should structure it as 3% to the buyer’s agent and 2% to the listing agent.

    Will the listing agent put up a fuss? Yes. Will they take the reduced commission to get the listing. Most likely yes.

    Also, if you are dealing with a high value home, the total sales commission percentage should be adjusted downward. You should also consider negotiating a different commission structure in the event the listing agent finds an unrepresented buyer. In other words, rather than your listing agent getting the full 5% (both the 2% listing commission and the 3% buyer’s commission, they instead get 2, 3, or 4% total commission).

    A few other points:

    -Change the wording in the standard NOVA listing agreement to say a commission will be payable to the listing agent only upon the close of a sale of the property (the standard language makes a commission payable if the agent brings you a buyer and you execute (sign) a sales contract, regardless of whether you end up going to closing).

    -Whether you sign a 60, 90, or 120 listing agreement is up to you, but you should include language in the listing agreement that gives you the unilateral right to cancel the listing agreement after some reasonable portion of time (say 45 days). This will protect you in the event you hired a listing agent who refuses to do anything to market your house after you’ve signed the listing agreement.

    -Change the wording in the NOVA listing agreement to strike the language that says a commission is payable for XX days after termination or expiration of the agreement if you sell the house unrepresented.

    With regard to these three bullet points, please realize that most agents will try to avoid having you make these changes to the listing agreement because these changes shift the contract away from unfairly favoring the listing agent. The agent may even lie and say they are prevented by law from changing the standard wording. If an agent refuses to make these changes to your listing agreement or tries to tell you he can’t do so, run (don’t walk) away and find another listing agent who will. The good agents won’t worry about these changes because they know they will get the job done and these provisions will never come into play.

    Good luck!

    • OldTimer

      Mr. Fontain:

      You write:

      “A few other points:

      -Change the wording in the standard NOVA listing agreement to say a commission will be payable to the listing agent only upon the close of a sale of the property (the standard language makes a commission payable if the agent brings you a buyer and you execute (sign) a sales contract, regardless of whether you end up going to closing).”

      Do you mean to tell me that the seller would have to pay a commission even if they did not go to closing? Whoa. That does not seem ethical.

      • John Fontain

        Yes. Here is the language:

        “The seller shall pay the broker in cash compensation of ______ if, during the term of this agreement, anyone produces a buyer ready, willing and able to buy the property.”

        • Helen

          Key words are ready, willing and able. If they walk away for no reason at all then the seller has the opportunity to collect earnest money and sue for performance. It’s not as easy as it sounds.

          As for the previous regarding negotiating a higher gross sales price, that’s something to look for but you still have the appraisal to contend with. It comes down to the appraisal and the lender on the price

          Yes you can withdraw from a listing at any time for cause. There is a withdrawal form that can be used for this purpose. I always give this to the seller to re-assure them that yes they can get out of the contract. The items that he mentioned above can be striked from the agreement. That is a decision that is made by the Broker (company).Again if the agent will not do it, then find a real estate firm that allows their agents to do this.

          • John Fontain

            “If they walk away for no reason at all then the seller has the opportunity to collect earnest money and sue for performance.”

            Suits for specific performance are brought by buyers againsts sellers who renege on selling the property. Sellers remedies don’t include specific performance and are generally limited to retention of escrowed funds. Regardless, in the event of a buyer who refuses to close, the seller would then technically be liable to the agent for the sales commission. Changing the wording as suggested above won’t result in compensation to the agent until the closing happens.

  • 22204

    Can anyone recommend a good realtor that’s part of:
    Century 21 Redwood Realty
    Century 21 New Millennium
    Coldwell Banker Mid Atlantic
    ERA Elite Group

    If I work with a realtor from one of these firms I will get a rebate from my insurance company, but I want to know who is good within these groups who also specializes in Falls Church. If you have any recommendations for a particular person, please leave a comment. Thanks!

    • RossBob

      Ron Whitesell at Century 21 Redwood is very good. He helped me with a very difficult short sale purchase. I would use him again in a heartbeat.

    • Helen

      Find a good Realtor that you like and ask them to give you a rebate equal to what the insurance company will pay or more.

  • Roycroft

    I am not a realtor but I can tell you there is a lot more work to the job then just posting a listing in the MRIS. Like any industry there are bad eggs in the bunch. This is why asking questions is important. A good realtor earns their commission.

    Even if you are planning on trying to FSBO when it gets down to contract negotiating either a good real estate attorney or realtor should get involved. There are a lot of pitfalls that unless you know what you are doing can cause a contract to go south.

    • Helen

      Great points and agree with you.

  • S. Arlington or Bust

    I agree that many realtors are doing it for the easy money and don’t add much value. That said, if you run into trouble negotiating a contract, a good realtor who understands the law and has a lot of experience can be invaluable. Also, a realtor can objectively assess what needs to be done to your home in order to make it marketable and how to price it competitively (with easier access to comps, market trends, etc.).

    My pick is Mike Webb, hands down.

  • South 9th Street 22204

    Purchased our home in 1994 from, “For Sale by Owner”.
    We had no Realtor/Buyers agent. We negotiated the price directly with the seller. We had a home inspection, an appraisal by the bank, used an off the shelf realty contract, scheduled a closing with an attorney we both agreed on. The result was no commission paid and instant home ownership. Do this only if you question what value realtors bring and do they really work for their commissions.

    • John Fontain

      For anyone with a reasonable level of education and common sense, having a settlement attorney handle the transaction (instead of paying a real estate agent to do so) is a very sensible way to go. By doing so, you have an actual real estate lawyer involved and you pay a fee for actual services provided which is a small fraction of what you’d pay to the agents.

    • speonjosh

      Also purchased directly from owner, with no agents on either side. Just a settlement attorney.

      Was a breeze.

  • Just Obvious

    Where else would anyone pay someone $30,000 to “help” with a sale?

    What is there to negotiate other than the price? Here’s my offer, here’s the counter offer, here’s a counter to the counter. The end. There is no law or expertise or experience that is added by a realtor.

    • John Fontain

      “There is no law or expertise or experience that is added by a realtor.”

      I wouldn’t say none, but I would agree that the compensation they seek is often well in excess of the value they add.

      In fact, agents can be of tremendous help to those with little knowledge or experience in negotiating, offer strategy, and the basics of the purchase/sale process (such as contingencies, etc.). They are certainly more valuable (and more necessary) for those without R/E experience.

    • drax

      Then you write your own purchase contract, huh? What could go wrong?

      • John Fontain

        No, you pay a few hundred dollars to a settlement attorney to fill in the blanks on the regional sales contract. Your choice: tens of thousands to have an agent write the contract or a few hundred dollars to have a licensed real estate attorney do so. Please feel free to explain why paying more is better.

        • drax

          Just making sure, John.

  • WantonTaco

    The revolution has begun. DITCH THE REALTORS!

    We bought a place during the bubble, they made a load. Now, years later, we loose our equity, the little we have left, they take ALL and then you have to toss in some because of the realtor fees.

    They don’t loose. WTF.

    A couple good settlement companies should start attacking the market, blogging on how to do it and making the process crystal clear. I need to hit the googles. fsbo.com should be a good place to start.

    REVOLT. DITCH THE REALTORS. Mr. Adam Sandler, you’re fired!

    • Helen

      Are you not aware that a lot of FSBOs use Realtors. I would put homes in the MLS for FSBOs for a fee and they then would call me for all the answers when they got a contract.
      Yes, some people can do it but the marjority need a professional to assist them. If you only knew what a good Realtor has to do to stay up to date on all the changes in the market, you would think differently. Ask them what classes they are taking to keep abreast of the market at all times.
      I agree on a lot of your points but you just need to ask for changes and negotiate the fees that you are paying.

  • 22204

    RossBob: Thanks for the recommendation, I appreciate it!
    Helen: Thanks, I had the same idea this morning!

  • NoVa Mommy

    Yes, there are a lot of “no talent hacks” out there, but a great realtor earns every penny of his/her commission. I gotta give a shout out to Norm Odeneal at Keller Williams Arlington who handled the sale of our old home and purchase of our new one. Definitely a class above the rest, very responsive, an overall great guy!

  • http://www.betsytwigg.com Betsy Twigg

    Arlington Native

    Thank you for your kind comment. Best wishes, Betsy Twigg

  • Ned Rhodes

    Mike Pugh is my guy. Helped me sell my house in a down maket and gave great advice as to what to renovate and what to leave as is.

    mike@mikesellsvirginia.com
    http://www.MikeSellsVirginia.com

  • MsMac

    We used Adam (author or this article) to buy our home and would recommend him to anyone. He helped us through issues we could have never forseen and provided experience, knowledge and guidance through some sticky situations. For those who think realtors are not necessary in this day and age, I have to say we would have stood to lose a lot of money (at the least in legal fees seeking advice) had we not had a realtor who navigated, researched and brought prior experience to the table in our situation. Just my experience but I can vouch for Adam’s commitment to us as clients and our overall success in buying a house more than any personal financial gains for himself.

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