How NOT to Pick a Real Estate Agent
I cannot tell you how many times over my 15 years in the mortgage industry when I ask potential clients how they picked their agent, I hear, "Oh, my brother-in-law is an agent".
We all know someone in our circle who thinks making a bundle selling real estate is right around the corner but let me assure you, for 99.99% of them, it is not.
The truth is the average earnings for an agent run about $35,000 per year.
According to the Bureau of Labor Statistics:
"The median annual earnings of salaried real estate sales agents, including commissions, were $35,670 in May 2004. The middle 50 percent earned between $23,500 and $58,110 a year. The lowest 10 percent earned less than $17,600, and the highest 10 percent earned more than $92,770."
Let us break that down:
The average home price where I live in the Denver area is $240,000. Multiply that by half of a normal commission or a typical 2.8% for the buyer's agent. That's $6720 per closed deal for the buyer's agent. Now let's divide $35,670 by the average commission to discover the number of successful transactions the average agent completes per year.
$35,670 / $6,720 = 5.3 deals per year.
Ouch! Five closed deals per year hardly make one a "pro". In my mind, it makes them a rookie and at that pace, they'd stay a rookie for over 20 years.
My first month as a full-time, commission-only loan officer, I completed 23 closed loan transactions. I was so green then I didn't know what I didn't know...but I had the benefit of multiple transactions per month as my teacher. Still, I made mistake after mistake, learning something new from each deal. Now after 15 years and thousands of transactions, I can finally say I've earned the title of "pro".
Can a real estate agent doing 5 deals a year say that?
I think not.
So, when it's time to find a real estate agent, you owe it to yourself and your family to ignore the fact you have a cousin with a license. Ignore referrals from friends and family altogether. Don't feel obligated to use these sources. Don't be lazy. Do your own research. Interview a number of agents and find a real "pro".
Remember, this is the largest single financial transaction of your life. Give it the respect it deserves. Hire the most experienced professional you can lay your hands on!
I can hear you now, "Okay, Rob, how do I find the most experienced professional?"
Good question and one I answer in my free report, "How To Pick A Real Estate Agent". I will say, as you've probably guessed, experience counts. The best way to determine experience is by the number of transactions an agent is handling monthly or yearly. The agent's production is going to give you the best indication of how committed they are to the profession. Is the agent a part-timer who's just dabbling in real estate sales - or is the agent a full-time, productive, professional whose livelihood depends on their ability to repeatedly close real estate transactions?
But, I digress. I'm supposed to be advising you on how NOT to pick a real estate agent.
So let's recap. How not to pick a real estate agent:
1. Don't use a family member
2. Don't use a family friend
3. Don't use one of your friends
4. Don't use a referral from a family member
5. Don't use a referral from your friends
I hope you actually use this advice on your next house hunt. If you don't, you'll pay the price. I know it sounds a little dogmatic, but after 15 years of dealing with countless rookie agents, I know of what I speak.
Related Tags: home buying, real estate agent, first time home buyer, first time homebuyer
Rob K. Blake, author of The B.U.I.L.D. System and Mortgage Secrets Exposed! has been teaching folks for the last 15 years all the tips and tactics to save $1,000s when shopping for a mortgage. For more free home loan tips, visit his Mortgage Insider Blog.Your Article Search Directory : Find in Articles
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