Tips For The Frugal Homebuyer: Finding The Perfect Real Estate Agent
by BECKY BLANTONFEBRUARY 9, 2016
The first thing most homebuyers ask when buying a home is, “What is it going to cost?” The next thing they want to know is, “Can we afford it?” Both are great questions, and the good news is that you can probably afford the house of your dreams if you know how to be a frugal house hunter.
Former stockbroker John Schmoll, Jr. is an expert when it comes to being a prudent about homebuying. Now that he’s not on Wall Street anymore, Schmoll writes for US News & World Report’s money section about frugal spending. He also maintains his personal blog, FrugalRules.com. He and his wife, a licensed Realtor in two states, are currently in the process of selling their home, and starting the hunt for their next house. Like the rest of us, they are looking for a real estate agent, and Schmoll has a few tips to share about the process.
How to Find a Frugal Agent
The greatest thing about buying a house is that you can negotiate your way into saving thousands of dollars if you find an agent with the right skill set and resources. Finding the right agent means getting referrals from friends, co-workers, and anyone else you know who has bought a house recently or in the past. Homes.com keeps a list of referrals across the country, which can come in handy if you don’t know any homeowners, or are moving to a new state or city.
“We’re finding our agent through referrals. We asked a number of friends for names of whom they’ve worked with and chose the most commonly mentioned ones to meet with and interview. We’ve bought before so I’m pretty comfortable with that though we did make sure to be on the same page for commissions,” Schmoll said.
Don’t just look for any referral– look for rave reviews where the person can’t say enough about how much they loved their agent. If a person has to consult their phone or calendar to remember their agent’s name, then that agent probably did not make a strong or lasting impression. Also, don’t just get referrals, track them. Create a spreadsheet or a handwritten list of names and comments, check out reviews online, and narrow your lineup. Once you have a shortlist, interview your top three or even five agents before selecting one. It may seem like an intensive project, but doing your due diligence now can potentially save tens of thousands of dollars later in the buying process.
Picking the Perfect Agent
As you begin the process of looking, create a “perfect agent” wish list. In other words, if you could find the ideal agent, what kind of person would they be? Friendly? Patient? Assertive? Do you want a great negotiator or someone more laid back? Is your perfect agent an expert at math, contracts and legal details, or more chatty and intuitive? When you know what qualities you are looking for in an agent, you are more likely to recognize them when you encounter them. Remember, this is potentially going to be a long relationship. You may be working with them for a few days, but more than likely you will be working together for a few months, so making sure that you “click” on a personal level is important. You want to feel assured that you can depend on your agent to do their utmost for you, and they will, in turn, depend on you to buy a house and reward them with a fair commission for their work. Treat this process as you would any hiring decision–you can base your selection on performance and numbers, or, like the Schmolls’, on a combination of performance and intuition.
“Everyone we’re meeting with is through a referral. We’re meeting with four realtors total and will choose the one we like best. We’re not picking based off their sales, but more so the feel we get from them. We are making sure they’re there to help us get into the home we want, not just viewing us as a ‘number.’ Independent vs. an agency doesn’t matter as much to us as their personality and character,” Schmoll said.
What Should Your Agent Do For You?
Your agent should know the neighborhood, the price of similar homes in that neighborhood, and the area. A good agent does more than just drive potential buyers around to look at homes: they handle paperwork, educate clients on what to look for, and keep an eye out for things that could be potential issues during the sale process. Most importantly, a good agent is well connected with other agents and can ensure that the sales process goes smoothly.
“I’d tell them to be as involved as possible – it is your new house you’re looking for after all,” Schmoll said. “That being said, it’s all about balance and using the skills/strengths of the realtor to your advantage to save you money. ”
Three More Ways Being Frugal Can Save You Money When Buying A House
There’s rarely one thing you can do to save a ton of money, but there are many smaller things that add up to major savings during the homebuying process, according to Schmoll.
“Put down at least 20% to avoid PMI, get a better rate, and save money over the life of the mortgage. I would also avoid stretching yourself too thin, so you don’t become house poor. Lastly, I would negotiate with the realtor for commission as well as with the seller to get an equitable deal for both parties,” He advised.
Finally, the best part of being frugal is negotiating the price, and this is another place your agent can play a huge role. Frugal-minded agents understand that buyers want the best house for the least amount of money. Find an agent that enjoys and has good intuition when it comes to negotiating and you’ll have found a winner, one whose name you’ll remember long after the sale.