Working with a real estate agent can significantly simplify the homebuying or selling process. From the initial consultation to the closing, your agent’s expertise and guidance are invaluable!
In this article, we’re exploring the five-step process of working with a real estate agent. Whether you’re looking to buy a home or sell a home (or both!), this guide will help you understand what to expect from the process.
The 5-Step Process of Working with a Real Estate Agent
Here are the five steps of working with a real estate agent.
1. Free Consultation
Professional real estate agents are happy to take the time to sit down with you and explore your goals for your next transaction. This first meeting should always be free of charge.
If you’re buying a home, the agent should ask about your priorities so that they can start looking for properties that would be a good fit. Be ready to list your “needs” and your “wants” for the agent. The agent might also ask if you are pre-approved for a home loan. Pre-approval is when you have a lender review your financials and check your credit to see if you qualify for a mortgage and how much you can borrow. This is an important step because it confirms the maximum price range you should be looking in. Even more importantly, it shows sellers that you can qualify for the financing needed to close the deal; this makes your offer to purchase more appealing to sellers. If you’re not yet pre-approved, the agent can help you find a reputable lender and take care of that critical step.
If you’re looking to sell, this consultation might take place in your home so that the agent can see the property they will be selling. The agent might make suggestions for ways to make the house more marketable to today’s buyers. This will help you maximize your profits from the sale. The agent should also provide market data to help you determine a strategic listing price, and they should outline their marketing strategy for your property.
2. Signing an Agreement with Your Agent
Most real estate agents will not begin working for you until they have a signed representation agreement. This agreement confirms that you have chosen this agent to represent you in this transaction.
The reason agents require an agreement is because of the way agents are paid. Nearly all agents work on “commission.” This means your agent only gets paid a percentage of the sales price when the deal closes. If you don’t buy or sell, your agent doesn’t get paid. So agents essentially work for free for weeks or even months. There is nothing so disheartening for a real estate agent as working with homebuyers for months, only to have those buyers have another agent write the offer and earn the commission. (Side note: as a buyer, you don’t typically pay your agent at all; real estate agent commissions are almost always paid by the seller, so you could hire me without any money coming out of your pocket!)
The representation agreement may be even more important on the seller’s side because real estate agents typically invest their own money in marketing the property. For example, when I am working for a seller, I cover the cost of professional photographs, signage, online advertisements, and local print advertisements. The signed agreement confirms that I will receive the commissions once the sale is complete, which is partly used to help me recover these costs.
You should actually be wary of an agent who does not ask you to sign an agreement. Without the financial protection of this agreement, that agent would be less likely to dedicate the resources needed to help you close your deal.
3. Your Agent Gets to Work for You
With a signed agreement, your agent can get to work!
Some services are generally covered by all agents, and other services are only offered by certain agents.
On the Buyer’s Side
The usual services for buyers include things like:
- Showing homes,
- Drafting offers, and
- Negotiating terms.
But an exceptional agent will go far beyond these basics. For example, as a buyer’s agent, I also provide the following services for my buyer clients leading up to an accepted offer:
- Market monitoring to inform you of new listings that meet your criteria as soon as those listings hit the market (and sometimes before then if I learn of possible off-market listings from my contacts.
- A Comparative Market Analysis (CMA) to help you decide on an appropriate offer price when you find the right home.
- Resources and recommendations for everything from lenders to inspectors to schools.
On the Seller’s Side
Every seller’s agent should:
- Enter the home on the MLS (Multiple Listing Service) to formally announce that the property is for sale,
- Answer inquiries about the house,
- Present offers to you as received.
But, again, exceptional agents go above and beyond. My seller services include:
- A complimentary Comparative Market Analysis (CMA) to help you determine the best listing price for your house.
- A complimentary walk-through of the entire property to make sure your house will show its best, including personalized recommendations for staging.
- A Custom Marketing Plan, complete with:
- Professional photography
- A single-property website
- eFlyers
- A slideshow property tour
- Print advertising
- TV and online promotion
- Mobile brochures
- Neighborhood announcements
- Targeted online advertising
- Area Realtor® notifications
- Online syndication
- Social media promotion
- Email marketing campaigns
- Signage
- An open house (to area brokers and/or the general public, depending on what’s best for your unique situation)
- Expert advice on planning your next move (helping you transition smoothly into your new place).
- Professional analysis of incoming offers so that you can make well-informed decisions about accepting, rejecting, or countering.
If you are buying and selling simultaneously (for example, if you are downsizing by selling your large home and buying a smaller one), you’ll need an agent who understands both sides of the transaction and has the skill to manage the sale of your old property and the purchase of the new one at the same time.
My FREE Guide to Downsizing can help you understand the unique process of working with a real estate agent as both a buyer and seller when you downsize. Enter your email address to get your copy!
4. Navigating the Contract Period
Once an offer has been accepted, the buyers and sellers have a signed Purchase and Sale Contract. This could be the end of a search, but it is just the beginning of the real estate transaction. We have a lot to do before the deal can close.
The contract period typically lasts between 30 and 60 days because we need time to complete the due diligence checks and get the buyer’s financing sorted. During this period, your agent will act as a coordinator, arranging for multiple industry professionals to provide specific services including:
- The home inspection(s). Home inspections are used to determine the physical condition of the property. Buyers typically pay to have the property professionally inspected so that they can be made aware of any visible issues before completing the purchase. The buyer’s agent will review the inspection report and help the buyer decide if the condition is acceptable. There may be some additional negotiation between the buyer’s agent and the seller’s agent at this point if there are issues on the inspection report to overcome.
- The appraisal. Appraisals are a formal calculation of a property’s value. This is particularly important when buyers are using a home loan to finance the purchase because lenders need to know the fair market value of the property securing the loan.
- Title research. Before the property can transfer, the title needs to be clear. This means that the seller has the legal right to sell the property, and no one else has a legal claim of ownership on the property. Sometimes there is a “cloud on title,” meaning that there is a problem with the seller’s clear right to sell. This could be a lien from taxes due or an ownership claim from an ex-spouse. In either event, your agent will work closely with the title company to resolve the issue.
- Financing. If you are buying a property using a home loan, you will be in constant contact with your lender throughout the contract period. And your agent should be right there to help make sure you’re not making any financial moves that could jeopardize your loan.
Your agent should also be reviewing the many documents that you need to sign during this period. Much of this work is done behind the scenes. You might never know that your agent had to follow up with the inspector five times to get a copy of the inspection report. But you can be sure your agent is monitoring the many moving parts during the contract period.
5. Closing (and Beyond!)
And finally, the last step in the process of working with a real estate agent is closing the deal! If you’re a buyer, this means you’re getting your keys and moving into your new home. If you’re a seller, this means you’re collecting the proceeds from the sale and moving into your next chapter. Either way, your agent should be there to support you in this major milestone.
For some agents, closing day represents the end. But in the real world, you may have questions after the deal closes. Buyers may have questions about homeownership. Sellers may have questions about the tax implications of the sale. I pride myself on remaining available to my clients for years after closing. Whenever you have a question, you can contact me as a trusted friend in the real estate industry.
Whether you’re ready to make a move now or you just want to explore your options for the future, you can contact me today for a zero-pressure consultation. It would be my pleasure to show you how working with a real estate agent can simplify the process and lead to a favorable deal!
