What Attributes to look for in a Real Estate Agent

There are four main attributes for finding a good real estate agent: knowledge, comfort, trustworthiness, and reputation.

Knowledge:
I look for an agent with expertise in a limited geographical area and a limited type of property. In a large metropolitan area like Chicagoland, it is impossible to find an agent who can competently cover a whole city or all of the suburbs and just as difficult to find an agent with the expertise to handle all types (commercial, residential, leasing, etc.) of deals. Location, location, location. Don't use a suburban real estate agent for a south side property. Don't use a commercial broker to find a residential property. Find an agent who knows and works a particular area and with a particular type of property. The right tool for the job! Such an agent will have a basic knowledge of property values, common problems or pitfalls (ie. this property is near the freight train line that comes through in the early morning or is on the landing path for the local airport), and local customs and practices (ie. customary tax proration in the city versus a collar county). Most real estate deals are pretty smooth and just about any agent could handle them. However, when a deal does not go as planned, choosing the right agent becomes critical. The right agent will have a good level of experience so that the agent will know how to handle the "off" situation.

Comfort:
A real estate buyer or seller will spend plenty of time on the phone with an agent and possibly even more time in the agent's personal company. Some buyers spend weeks in the real estate agent's car driving from showing to showing. The client must be comfortable and get along with the agent. This is a matter of personal taste. An agent that some consider to be pushy or short to some may be forceful and to the point for others. An agent who is non-confrontational and collegial to some may be too withdrawn and without enough fight for others.

Trustworthiness:
Most people know that a real estate agents is only paid when a transaction closes. As a result, bad agents sometimes work "for the deal" rather than working "for the client". Avoid agents that do not put the client's best interests first. These agents are easily found out when they begin to play "devil's advocate" a little too much with regard to price, repair requests, or contract terms or when they "babysit" a deal too much to make sure it closes on time (because they need the commission check to eat). Trustworthiness is important when a client needs an agent who knows the law and does not cross over the line. A good agent will find novel and smart ways to solve problems; a bad agent will suggest an illegal or unethical course of dealing and merely suggest that "everyone does it". This behavior is commonly demonstrated by the "bad" agent who has no problem with "off the HUD-1" credits or who smooths over inspection issues by downplaying the importance of those issues to the client.

Reputation:
The best way to find a good real estate agent is to ask someone who has recently been through the real estate buying or selling process or, better yet, to ask someone in a related real estate profession. Attorneys and mortgage brokers know the good agents and the bad agents and can usually help a client find one or more who might be the "right" fit. There is no substitute for experience. It is better to get a referral to a good agent up front than to get stuck with a bad agent only to learn that the agent is bad at the closing table.

A real estate deal is one of the largest transactions that most people will engage in during their lifetimes. The choice of an agent should not be left to random chance, the cheapest quote, the luck of the draw, the first guy who called back, or whoever was "on the desk" when the client called in to the broker's office. A prospective client should always interview multiple agents. Choose the one with the best blend of qualities and the results should pay off.

Looking for a Speaker?

In the last month or so, I have developed a pretty darn good (if I say so myself) presentation on the plethora of laws (local, state, and federal) affecting Chicago landlords when making a lease. I've presented the seminar to a group of ReMax agents and their clients and will be presenting again next week for Real Living Helios. I would be happy to make that same presentation to any interested landlord groups, real estate brokers or their clients. Anyone who is interested can feel free to contact me at http://illinois-attorney.com/contact.

When do I call an attorney to help sell my house?

When do you need to get an attorney involved in selling your house? The quick answer is right away.

The first time you should consult an attorney is before you sign a listing agreement with a realtor. Many of the "standard" or "form" listing agreements are heavily slanted against the seller or contain provisions that surprise sellers when they actually find out what the agreement says, usually when it is too late to do anything about it.

Most of the listing agreements in the Chicagoland market indicate that a real estate broker's commission is earned once the broker has produced a "ready, willing and able" purchaser of your property. "But what if the deal does not close, I don't owe a commission, right?" Wrong. If your buyer defaults on the transaction after satisfying all of the buyer's contingencies (ie. the buyer defaults and fails to close), the seller likely owes the real estate brokers a commission.

In reality, many real estate brokers do not try to collect this commission. They want to keep goodwill with their seller client and they understand that they will get a commission when the property does eventually sell. But what about the selling agent who is out a commission and what about the listing agent who has had a falling out with the seller during the course of a deal. They may want their commission... and they are entitled to it.

There are more than a few reasons to take a look at the listing agreement before it is signed. Among others, the attorney can assist a seller to determine the rights and obligations of the seller if the seller finds the buyer without the help of the agent; if the seller has any right to avoid a commission for people who looked at the house before it was listed; and in the event that the real estate agent acts as dual agent. Other questions can be answered such as how does the seller terminate the agent relationship?; is a commission owed to the agent if the seller gets a contract after terminating the agent?; or are there any "hidden fees"? (sometimes a commission will actually be "5% of sale price plus a $225 processing fee). In most cases, under the terms of the "standard" listing agreement, the real estate agent will come out on top in regard to those issues.

Many real estate agents are excellent to work with and understand some of the shortcomings of the form listing agreement. In fact, many are very willing to make modifications to the agreement so that the seller can preserve some rights and better deal with some of the situations which can arise during the course of an agency agreement.