If you’re looking to buy or sell in the coming months or the coming years, you need to work with a trusted and a Realtor that you feel comfortable with. I’m going to talk about some of the things to look out for in a real estate agent when you are thinking about buying or selling, and also lookout for some red flags when you work with them.
So here’s a quick question, can you trust realtors? And the answer is yes. But you have to be careful because there are a lot of bad agents out there, but most of the agents or realtors are trustworthy and have been in the business along time and trying to make a living. So they’re going to work hard for you, they’re going to earn your trust so they can earn their commission because they are only working on commissions, not on a salary so they better give you great service and you better trust them or they want to make sure that you trust them.
There was a survey done a few years back by National Association of Realtors, and they found out that 86% of the U.S.Citizens used a realtor when they were looking for a home. So that’s a high percentage of buyers and sellers looking for realtors. That’s a high number. Of course there’s that 14% that did not use Realtors—that may be an issue with the trustworthiness—but 86% is a very high number. By the way, realtors are real estate agents who belong to the association known as National Association of Realtors. And most realtors are professionals; they earn their living by selling and their profession is like any other profession. Most of them are trustworthy, but there are some that are not trustworthy. There are some bad apples out there.
Think about the profession: Lawyers, are there bad lawyers out there? Few of them there are. Are there bad doctors out there? Few of them there are. Are there bad stockbrokers out there orare there some bankers who are bad? Of course, there’s a small percentage of those professionals that are bad. Politicians, are there bad politicians out there? Well, I’ll let you answer that yourself.
So here are some tips I’m going to give you when you are looking to buy or sell and when you want to work with a real estate agent or realtor. I have a bonus at the end of this where I tell you some of the bad things that agents do and why they lie and some ofthe red flags that you can look out for when you are interviewing them or when you are working for them.
So tip number one: when you are working with a realtor or a real estate agent, whether you’re buying or selling, is learn more about the real estate agent find out more about their past experiences. Have they been referred to you? If they were referred to you, ask them questions how they work, how long they’ve been in business, how many transactions they’ve had, and what is the way they can help you find the best home for you, the best location for you, and the best terms and conditions for you and how they respond to you. You can make a judgment if you’re going to trust them or not. And most agents are referred to you by other people, your friends, your family, or their past clients. So when you are referred to them, that’s a good sign. And you can find out how much of the business comes from referral versus having business from sign calls or internet calls, or from their websites or social media. If you are referred to this agent and more than 46% of the agents are referred to buyers, which is a high number considering a lot of them goon the internet or social media to find other agents, so that’s a significantly high number. So if you are referred to this agent or realtor, ask that person who referred you, why they referred them to you, what you like about the realtor or how they have worked with them in the past or somebody that have worked with them in the past. What they like? How was their professionalism? How was their honesty? How was their response and communication? How was their negotiating skills? And after all that, if you feel comfortable working with this agent that you are referred to you can proceed, that’s one of the things you can do.
Tip number two: is talk to the agent’s past clients. A lot of these agents have been in the business for a long time. As you may know or you may not know, selling real estate is not easy. I’ve been in the business for 25 years, I work harder now than ever before. Because number one, the market changes. Number two, the clients’—the buyers or sellers’—requirements change, their communication is all different. So you need to find out about their past clients, call the past clients, ask your agent, “Hey, can I talk to one of your past clients or two of your past clients?,” If they are happily able to give you their name and numbers, you can judge if there is any hesitation. If there is any hesitation, then you know that they’re not giving great service. But if they give you great service, or if they gave their past clients great service, great communication, and they were happy with them, then the agent will be glad to give you the numbers.
Going back to how hard this business is working in real estate, the attrition rate of realtors is 90%. What that means is statistically, in the last 10-20years, 90% of the real estate agents or realtors that come in the business are out of business in the first five years, 90%. And in the first year after the one year, 50% are gone. So the ones that survive, like myself, I’ve been in business 25 years, they better have given good service, good communication, they better have good negotiating skills to survive this long; otherwise they would not have survived. And 70% or more of the agents out there make their business earning realtors, selling homes and helping buyers and sellers are through referrals. So by giving great service and having great communication, having the negotiating skills, the agents out there that have survived for so long have all those skills. So that’s a good trait to have a lot of past clients and when you talk to them, they will let you know about that particular agent. So that’s a good thing to do when you are looking for an agent.
The third tip that I can give you when you are looking for an agent, whether you’re buying or selling is look at their reviews. Usually when you first talk to the agent or the realtor, you can ask them for their reviews and they will be glad to send you reviews. Either they have it in a written form or they will direct you to a website where there’s a page, you can look at all the reviews or these days you don’t even have to ask the realtors about reviews. You can go online, go to Google Business page, Google the name Mike Patel, Real Estate, see what comes up. Google your local realtor in your area, the realtor’s name in the city and see what comes up. A Google Business page should show up with all the reviews or go on Zillow or Redfin, go to Realtor.com or go to social media. You may not find reviews about that agent, but you may find him or her interacting with their friends and family and see how they are reacting, what kind of response are they getting. When they post something, is it something that you would want to read? Are they posting pictures? I’ve seen some lady realtors; nothing wrong with it, but posting pictures of provocative figures on swimsuits, I personally would not work with that; that’s my personal opinion. But look for things like that bothers you.There’s some agents posting drinking in a party and almost getting drunk. That’s okay if you get drunk, but when your providing public service and you post things like that, to me personally, it’s offensive for me that they are putting pictures like that drunk or something like that on a public domain. I would not do that. So when you go on social media, look for that agent’s interaction engagement post. If you feel comfortable with that post, that’s one sign that you may want to work with them. And if you feel uncomfortable about that post because after working with you, they may post something about you.
So, that may not be a good sign. So, use your own judgment. Of course, I just gave you an example of my personal opinion, but there’s so many out there you can somewhat judge to see if you can work with this realtor or not work with the realtor. It’s like a review, but it’s more of an engagement interaction with how they communicate and interact in public. So that’s one way to do it, is look for reviews and social media interactions.
Tip number four, and this is the most important one, is when you’re looking for a realtor buying or selling, use your gut feeling. A lot of times you may interview all you want.You may look at all the reviews, you can look at all the social media, you can look at all the past history. It may not tell you things, so the best thing is go by your gut feeling. A lot of the employers I talk to have a lot of friends who own companies. And when they hire employees, of course they look at the resume and they’re all great experiences and what they can do and what they have done, but ultimately they pick by gut feeling.
I remember when I had a flower shop. The first designer I ever hired, I didn’t know anything about a flower business. And I got into the flower business and I had to hire a flower designer. I had no idea about flower business. I called this flower designer my first call that I had an ad out for. When I talked to him in three minutes, I decided he’s the guy I’m going to interview and hire. And guess what? He’s the only flower designer I hired. I had the flower shop for eight years, he was with me for eight years. That was a gut feeling based on some other facts that he provided me. So, when you’re looking for a realtor, gut feeling goes a long way.
The fifth way to tell if you can trust your realtor, if you can work with your realtor, if you’re a buyer, then go out and look at some homes. Go out for the first time, let her or him take you out. Show some homes and see how you interact, how he works or she works, and are you going to be feeling comfortable for the next two-four times that you’re going to go out looking at homes. So that’s one way. Just check it out and test them out. If you’re a seller and if you refer to an agent, and if you’re not comfortable, interview other agents. Maybe two, maybe three, no more than three, because then you get confused. So, interview two or three agents, see how friendly they are, see how honest they are, see how trustworthy they are, see how they present the presentation to you. Do you feel comfortable talking to them? You’re going to be with them for 90 days-6 months incommunication, and you have a contract with them. When selling your home, are you able to talk with them and communicate with them for six months or so? Hopefully, in this market, it doesn’t take that long to sell a home, but even if it’s 60 days. So, one way to do is interview two or three agents, talk it out, have a conversation. And then if they are local experts, if they know the local market, if they know your neighborhood, if they seem that they have a lot of past clients if they have a good track record, and if your gut feeling says yes, then go with any one of those three agents that you interview with. Hopefully, you’ll go with the one that you were referred to. But not 100% of the time the referrals don’t work out. There are occasions where the agent who are referred to you, you may not get along, or your gut feeling doesn’t say work with them. But then, interviewing two or three agents will be a good thing to do. So, I hope this helps.
I mentioned earlier that I’m going to give you a bonus where there are some agents who lie about getting your business, and you don’t want to trust them. So, here are the red flags or some of the things that agents say to earn your business, to get your business. Because remember, agents work only on commissions. Sometimes they get desperate. They may not have sold for two-four months and they need some money. So, they may tell you things just to get your business, hopefully to get your listing or make you sell a home.
So, here are three or four things. I’m going to be very brief on this that they may tell you. In a sense, they lie to you to earn your business. So, here are some of the things that agents may lie about. One of the common things they do is they inflate the price. In this case, if you’re trying to list your home, they may tell the price of your home higher than it is so that you get the listing. If your house is worth a million dollars, they may say “Hey,I can get you 1.1” so that you list with them. Because obviously, most of the time, the sellers want the most price, but the price has to be reasonably priced, it has to be market-price. So they may get your listing just because they tell you a higher price, but they know deep down that that’s not going to sell. And then later on, they’ll ask you to reduce your price. So that’s one lie that they do. Lie number two is that if you’re a seller and looking for a listing agent, they may tell you, “Oh, don’t worry. I have a few buyers, and I’ll show them to you as soon as I list.” And a lot of times, they don’t have these actual buyers, but they say this to you to earn your listing. And, of course, I’m giving you these stats based on a survey done a few years ago by National Association of Realtors.
The third thing that they may tell you is they may tell you on the phone or before you hire them, is that their fees or commission will be the lowest out there. And then, when you actually hire them, they may tell you a higher price, so watch out for that.
The fourth thing they may lie to you about is their level of experience and level of performance. They may tell you, “Oh, I’ve been in business a long time. I’ve sold a lot of homes, and I’ve done a lot of negotiating.” But in a sense, they may not have done that if you’re a newer agent. For example, statistically, according to National Association of Realtors, of which I’m a member, an average agent sells four homes per year, which is not a lot. Good agents, great agents, sells 15-25 homes per year. So, you may want to find out how many homes they sell per year and how long they’ve been in business because they may tell you things that they are experts in the local community, or they’re experts in your neighborhood, or they’re experts at negotiating, and they’re not. So, watch out for those traits.
And the other thing that I want to mention to you is that when you’re working with a buyer, and I’ve already mentioned this earlier is that they tell you that they are the local experts, and they’re not. So let’s say I’m in Anaheim Hills, and I have a buyer calls me up and say, “I want to look for a house in San Clemente, which is 45 minutes away.” And I may tell him, “Oh, yeah, don’t worry. I know San Clemente. I’ve been there many times. I’m the local expert over there.I know the schools.” But in a sense, I’m not really an expert of San Clemente. It’s 45 minutes away or an hour’s drive from here. But, because I want to earn your business and I want to show you homes this weekend, I have nothing going on. I may tell you, “Yeah, don’t worry. I know all about it.I know the schools. I’ll have a report for you when I meet you there at 10:00 on Saturday.” So, be careful what they say. Most of the times, you cannot be a local expert everywhere. I’m sure you’ve seen some signs or you’ve received some postcards saying number one agent, number one agent in your zip code, number one agent in your city, number one agent in your county, number one agent in the state. Not everybody can be number one, so that may be false advertising. So, be careful.