How to Hire a Real Estate Agent

Before you hire a real estate agent, it’s essential to know how your state’s relationship among agents, home sellers, and prospective buyers works. There are usually three types of agents:

Here are the three types of agents:

Seller’s agent: Also called a listing agent, this agent represents the seller only.
Buyer’s agent: This agent represents the buyer only.
Dual agent: This happens when one agent represents the seller and the buyer or when two agents from the same agency represent both parties.

It’s usually better to avoid dual agents to prevent any conflict of interest but make sure you know the laws in your state. In some areas, the buyer’s agent may be required to negotiate the best deal for the seller.

Table of Contents

Finding a Real Estate Agent

The best way to find a real estate agent is by getting a recommendation from a friend or someone you trust. If you don’t have a personal referral, you can check the phone book or search online for agents in your area. Once you have a list of potential agents, contact each one to set up an interview. Make sure to let them know that you are considering other agents as well.

The Agent Interview

Each agent interview should last at least 30 minutes. You can do the interview over the phone or in person, but in-person is usually more helpful. During the interview, make sure the agent is licensed in your state, works full-time in real estate, has at least five years of experience in your area, and is a member of a real estate association, ideally the National Association of Realtors (NAR). Always ask for references from past clients and check with them. Also, ask the agent to bring a list of all the deals they have worked on in the past year

Exclusivity Agreements

Once you’ve picked an agent, they might ask you to sign a contract saying you’ll only work with them. Here are the key points to think about:

Length of contract: Agents may ask for a 6-month contract, but it’s better to ask for no more than 3 months unless the contract lets you cancel anytime for any reason, in which case the length doesn’t matter.
Commission: Sellers typically pay 2–3% of the home’s sale price in commission, but this rate can be negotiated.
MLS listing: The agreement should say that your agent will list your home in the MLS (Multiple Listing Service) so it appears in the local database for real estate listings.

Types of Agreements

There are three main types of agreements between sellers and agents:

Exclusive-right-to-sell agreement: You agree to pay the agent a commission if your home sells, even if you or another agent sells it.
Exclusive agency agreement: The agent has the only right to sell your home and get a commission, but if you find a buyer and sell it yourself, you don’t owe the agent anything.
Open agreement: The agent can list your home, but they only get a commission if they sell it.

Most sellers sign exclusive-right-to-sell agreements. If you think you might find a buyer yourself (like a friend or another agent helping), you might want to consider an exclusive agency or open agreement.

Other Professionals to Consult

Besides your agent, it can be helpful to get advice from these professionals when selling your home:

Lawyer: Although you’re not required to hire a lawyer to oversee your real estate transaction, having one review all the paperwork you sign to point out potential legal issues you might not detect.
Accountant: Selling a home raises various tax and financial issues, which you should discuss with a professional before selling. Your accountant or tax adviser should be able to answer your questions

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