According to the Minnesota Realtors, there are around 21,000 licensed realtors in the state, and just as many loan officers and title representatives. So how do you find and hire the right ones for you? Like any industry, I feel that the real estate industry has several highly competent professionals that provide extraordinary service to their clients, as well as folks who lack many or all those characteristics. Here are some tips on the best places, as well as the best methods, to hire your home team.
Where to Find Your Home Team
A vast majority of my business, as well as the business of most real estate professionals, come from referrals from our friends, family, and former clients. Especially when it comes to large purchases, people want to work with someone that they know, trust, and want to do business with. Naturally, if we have a significant relationship with someone, and they recommend a professional, we are more likely to trust and want to do business with that professional. For that reason, I consider referrals to be the best way to find all members of your housing team.
How do you ask for a referral for these vendors? Think of someone you know and trust who just purchased a home in the recent past. Who did they use for their home team? Ask them for their honest feedback about the vendors involved. Do this as many times as needed to get a list of one or more professionals in each area to talk to.
Another great way to get referrals is to ask the realtor, lender, or title agent you’ve selected who they prefer to work with on a purchase. Most of these professionals will have one or two other vendors that they work with frequently because they know that these vendors provide outstanding customer service. I know that I prefer to work with other vendors that I have experience with, as I know what to expect from them and their quality of work. The other members of your home team would be thrilled to give you recommendations.
I also commonly see referrals made is through social media. It’s the quickest way to get multiple opinions from your entire social network. I do caution people to still do the same due diligence as I recommend above. It’s important to follow up and learn what experience your contact has with this real estate professional. Have they, or someone they know, worked with that person before? Or are they just dropping the name of a friend? So long as you investigate, social media is a quick and easy way to find your home team.
- Real Estate Websites
The internet has been a great boon for the real estate industry in terms of marketing our services to the public. Sites such as Zillow, Trulia, Realtor.com, and many others, have a wealth of information on agents that can help you make your decision. Zillow, for example, will provide you with all of a realtor’s home sales, as well as online reviews from past customers to assist you in making your decision.
When looking at these websites, it’s helpful to consider the following:
- Number of reviews: It takes time and effort to leave a review. So usually when someone does so, it means that they had a particularly good (or bad) experience. Therefore, one would expect that more reviews means that this professional has provided more customers with exceptional service. According to web data, 25 or more reviews denotes someone who has a significant and loyal base of past clients.
- Quality of reviews: Usually reviews come along with a rating system; often 1 to 5 stars or something similar. How many of the reviews are 5-star? Or 1-star? Note, just because a professional has a 1-star review does not mean you should discount them. We can’t please everyone all the time. However, if there is a pattern of low reviews you may want to avoid that person.
- Sales: As I mentioned above, on sites like Zillow and Realtor.com, you can review all of a realtor’s sales. This will give you the address, price point, and date of each transaction that they’ve handled. In doing this, think about where you want to live and how much you’d like to pay for a home. Does the agent have many sales like this? The more an agent has worked in a certain area or price point, the more familiarity and comfort they will have assisting you with a similar transaction.
- Open Houses, Ads, and Yard Signs
Many realtors will look for new potential buyer clients at open houses, or by putting their contact information on online ads or yard signs of properties. This can be an effective strategy for them, as people who are looking for properties in person or online are usually at least considering the possibility of buying a home in the near future. This can also be a great way to find a realtor if you don’t know anyone in the industry or haven’t found one through referral or online research.
I would suggest that, before committing to an agent you met through one of these means, you do an appropriate amount of due diligence. Just because an agent has an ad or an open house at a home or area you are interested in does not mean that they have the knowledge and experience you need to have a successful transaction. Often for example, new agents will host an open house for a more experience agent because they do not have any clients of their own. Be sure to look up the agent online, as well as interview them using the methods I describe below.
Now that you’ve found one or more potential professionals to work with, how do you select the one that is right for you? I recommend that you have a lengthy conversation with them either by phone, video, or in-person to discuss your needs and how they can assist you with those.
Note, this conversation is not like a typical job interview. I don’t feel it is helpful to simply ask a list of questions and record the answers. For one, this is an area where you likely have little to no experience. You have either never bought a home, or it’s been a while since you did so. How do you know the right questions to ask?
Rather, I think that through this talk, the person you should select should be the one that you feel best learns your needs and provides solutions as to how they can meet those. I believe that a good real estate professional is, first and foremost, one who asks great questions. You should be the one doing most of the talking here. And you should leave the talk feeling like the professional has a good grasp of what you’re trying to do, and a step-by-step solution for how to get that.
This conversation is also about education. Did the professional display an appropriate amount of knowledge about the real estate industry, and were they able to communicate that to you in an understandable way? Did you leave the talk knowing more about buying a home than when you went in?
Family and Friends?
It is a popular saying in my industry that “everybody knows a realtor”. Especially with the aggressive seller’s market I will describe in later chapters, many people have gotten their real estate agent or mortgage license and entered the real estate industry. I’m sure that you know a friend, family member, or co-worker that has their license. The question is: should you?
There are two ways of looking at this question. On the one hand, assuming you have a good relationship already, working with a family member or friend usually satisfies that important element of trust in your professional relationship. If you can’t trust family or friends in this scenario, then who can you trust? On the other hand, once you work with a family member or friend on a professional level, your relationship with them will forever change. Many people are worried that the family member or friend will learn too much about their personal finances, or that if something goes south that their relationship will be negatively impacted.
One thing you should not feel is pressure to work with your family or friends just because of their current relationship to you. This is the biggest financial transaction of your life. You should approach it just like any major decision you make. As such, if you are considering working with a family member or friend, you should do the same due diligence with them that you would someone you do not already know. You don’t owe this person anything. If they are a true professional, they will understand that.
Full-Time versus Part-Time
As I mentioned previously, there are over 21,000 licensed realtors in the State of Minnesota. Hundreds of new agents take their licensing exam every year. And yet, what they find is that real estate is a cut-throat industry where success is exceedingly difficult. According to statistics from the National Association of Realtors, around 85% of agents sell 10 or less homes per year (less than one per month). And of those agents, over 95% of them will no longer be licensed after one year. Many folks, who assume that real estate is quite lucrative, would be shocked to learn that the average earnings of a first-year realtor hover just above minimum wage!
I believe that real estate is not a career where a part-timer can become successful. Just like with any skill, becoming an expert requires constant time on task over long periods of time. Full-time real estate professionals work in the field every day. They are constantly learning about the market and honing their craft to sell more homes and provide better service for their clients. The part-timer on the other hand usually has more important priorities. They have another full-time job, or duties at home. Or this is just a hobby or side-gig for a little extra cash.
The real estate market is constantly changing. Though at the macro level, we’ve been experiencing a “seller’s market” for a number of years, there are seasonal as well as monthly and even weekly shifts and changes in the market that can impact your home search. Really the only way to experience these shifts is to experience them in real time. Looking at data and housing reports can be helpful, but that data is usually backward-looking. In that regard, it’s very difficult for an agent working less than full-time to know of these market trends as they happen. They just aren’t in the market enough to experience them.
Making a Decision
Overall, there is no right way to choose who you eventually work with. It’s somewhat of a “know it when you see it” sort of situation. At the end of the day, you should be comfortable and confident in the person you select, and trust that they will be able to help achieve the outcome you are looking for.