Finding a good real estate broker
5 Tips Home Edition: A good one can make all the difference. Here's how to find them.
NEW YORK (CNNMoney.com) - Buying or selling a home is one of the biggest transactions you'll make. With over a million and a half brokers out there, it's not hard to find a broker, the challenge lies in finding a good one.
In today's top 5 Tips Home Edition we're going to tell you how to do just that.
1. Gauge your need
Real estate brokers may make it seem like you can't buy a house without them. And if you don't have the time or the patience to really do the homework, you're better off enlisting help. But if you do decide to go it alone, you're likely to get a better deal.
That's because you'll save on commission fees. Today agents are charging about 5 percent and while that's down from 6 percent a few years ago, it's still a chunk of change.
The Internet also has a number of tools to help consumers get the skinny on home prices. Check out Zillow.com as a starting point. If you're a buyer, it will help you scope out home values, compare selling trends in the area. For sellers, you'll be able to get an idea of what your home is worth and review nearby comparisons of houses that have sold.
Homevalues.com also offers tools for consumer to browse neighborhood home values. A word to the wise, however, these sites are far from perfect. There may be incomplete or incorrect information.
It's best to use these tools to get a general sense of the market. Often the best way to get information is to check the market temperature the old fashioned way -- take a drive and see what appeals to you. Take note of how many homes are for sale.
2. Where to find 'em
To find reputable brokers, your first step should be talking to friends or neighbors and asking for recommendations. Make sure you find a real estate agent who is very familiar with your area. Look for agents who either live in your area, or who make a lot of sales in your community.
You may want to consider using an agent who is a realtor. Realtors are licensed by the state and by the National Association of Realtors, an industry organization. Members have to agree to a code of ethics.
If you don't mind doing some of the work yourself, consider using discount brokers. Companies like ziprealty.com and help-u-sell offer their own versions of discount services. Discount brokers may be able to plug you into a Multiple Listing Service, and you may be paying less in commissions, but services are limited. So you're unlikely to get any support during the negotiation process.
Make sure you're clear on what services you're getting. According to Inman, expecting more from a real estate agent is the number one mistake people make.
3. What you deserve
You'll want to go after the top producer in your community, says real estate expert Brad Inman. "You want someone who has a large number of listings and who is actively matching buyers and sellers," he says.
Of course market insight is just as important too. You'll also want to find a real estate agent who has a reliable and appealing Web site. But make sure the Web is not the only marketing plan they've concocted. You want a variety of ways that your home will be marketed, including local newspaper ads and community postings.
Let your broker know that you want to know about all the offers that come in for your home. While brokers are legally required tell you about every offer that comes in, in reality, some brokers don't.
And be sure to get a sense of their success. Ask to see the details of the homes they've sold recently in your area. You can also check to see if your agent is licensed and has any complaints against them by checking out the Association of Real Estate License Law Officials at arello.com. This is a collection of state regulators and agencies that issue licenses to brokers.
4. Be wooed
Commission fees are negotiable. While a 5 percent fee may seem like it's written in stone for some real estate agents, price-fixing is illegal. In very expensive areas, like Boston or San Francisco, rates tend to be lower, while in lower cost areas, commissions are higher according to Walter Molony of the National Association of Realtors.
As a consumer, you'll get the best deals if you have several real estate agents bidding against each other to give you lower commission rates. Real estate agents are salespeople too. And just think of the savings: a 5 percent commission on a $300,000 home works out to $15,000. If you can cut that rate down to 3 percent, you've just saved $6,000 off the bat.
5. Watch for red flags
You can uncover many a red flag by going to the agent's Web site. Since you won't be swayed by a nicely designed site, dig right into the details. See if any of the broker's listings have been sold a long time ago. This could be a sign of negligence, or it could be a ploy to whet your appetite for a property that isn't even on the market anymore.
Keep checking in with the Web site to see if they update their pictures every week. And of course, make sure the Web site has substantial information too. You'll want to have research on the neighborhood, including transportation, schools and parks. But of course, don't rely wholeheartedly on the Web alone.
Another red flag is when your broker starts appealing to your "creative vision" and starts to talk about removing trees, adding a deck or converting the garage. Most real estate agents don't necessarily have much knowledge of zoning laws.
Don't go with a broker who has to rely on creative thinking to get you to lay down your money. You should also note whether or not your agent spends enough time on your needs. Phone calls should be returned in a reasonable amount of time. You want your agent to communicate and spend time with you.
Gerri Willis is a personal finance editor for CNN Business News and the host for Open House. E-mail comments to firstname.lastname@example.org.