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Home Buying

How to Find a Real Estate Agent

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Whether you’re buying or selling a home, finding a real estate agent you trust is one of your most important decisions. After all, they can make or break your home-buying or home-selling experience!

You can’t afford to hire an agent who’s winging it. You want a seasoned professional who will do the job right.

Now you may be thinking, But I don’t know how to find a real estate agent I’m excited to work with. That’s okay—we do! We’ll help you figure out exactly what you’re looking for in a real estate agent so you can hire the right person.

Six Steps to Find a Great Real Estate Agent

Feel confident in picking the best agent to help you buy or sell your home by following these steps:

  1. Know the basics about real estate agents.
  2. Learn what to do before looking for a real estate agent.
  3. Determine how to find the right real estate agent.
  4. Know where to find real estate agents.
  5. Interview at least three real estate agents.
  6. Choose a real estate agent.

1. Know the Basics About Real Estate Agents

Buying or selling a home is probably the biggest financial transaction you’ll ever make. So before you rush out to find a real estate agent, you need to know what they should—and shouldn’t—do. 

What Do Real Estate Agents Do?

Real estate agents do a lot. They’re a huge help to buyers who can’t find the right home, because buyers’ agents can get the inside scoop on when a house will go up for sale. They can also help you lock down a home faster than you could on your own.

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Find a trusted real estate agent we recommend in your area.

Agents also help buyers think strategically when making an offer in order to beat out the competition. And they guide buyers through all the complicated tasks and paperwork that lead up to closing day.

If you’re selling a house, a seller’s agent (also known as a listing agent) helps you stage, market and set the right price for your home. Your agent will also help you negotiate the best deal. With an agent, you’ll sell your house for way more money than you could by selling it solo.

If you don’t have a real estate agent and the person on the other side of the negotiating table does, you’ll get the short end of the stick. You need a world-class agent to set you up for success.

Difference Between Buyers’ and Sellers’ Agents

When buying a house, you’re looking for a real estate agent who listens to you and is good at finding homes that meet your needs. A great agent knows about tons of available homes—sometimes even before they hit the market. They should also be an expert negotiator to ensure you won’t overpay for your new place.

If you’re selling your house, find a real estate agent who can help you set a fair price, stage your home to appeal to buyers, and provide a marketing plan. A really kick-butt agent may even hire extra people—like a photographer or assistant—to help your home sale go smoothly.

REALTORS® vs. Real Estate Agents

You might be wondering why we aren’t telling you how to find a realtor. While the word realtor is often mistakenly used to refer to any real estate agent, not all real estate agents are REALTORS®.

REALTORS® are real estate agents who join a professional group called the National Association of REALTORS® (NAR). NAR gives them extra training and tools to do their jobs.

If your real estate agent isn’t a REALTOR®, there’s no reason to freak out. All real estate agents (even non-REALTORS®) must go through a state licensing process in order to legally help you buy or sell a home. To get licensed, agents complete hours of coursework and pass an exam.

To make sure your agent’s real estate license is legit, you can verify it on your state’s real estate commission website.

Difference Between a Real Estate Agent and a Broker

A real estate broker is the next level up from an agent. After an agent gets their real estate license, they’re required by the state to work under a broker. A broker (also called an associate broker in some states) manages and mentors new real estate agents—who, in return, pay the broker a fee.

If you’re nerdy enough, you can think of it like a Yoda and Luke Skywalker relationship. A broker is like Yoda, the Jedi Master who is an educated and experienced expert in real estate, while an agent is like Luke who must be trained in the ways of real estate. Otherwise, new agents might make huge mistakes and the real estate market could fall to the dark side (dun, dun, dun).

Every broker got their start in real estate as an agent. After meeting their state’s requirement to graduate to the next level, an agent can open their own brokerage. But keep in mind, you can find plenty of extremely experienced agents who just choose not to open their own brokerage.

Whether you’re buying or selling, you’ll probably communicate mostly with an agent rather than a broker. Many brokers don’t work with clients directly and focus instead on building their business.

2. Learn What to Do Before Looking for a Real Estate Agent

Before you talk to a real estate agent, there are some things you need to tackle first. Let’s cover these tasks for both buyers and sellers.

If You’re Buying:

Buyers, before you’re ready to have a real estate agent guide you through the home-buying process, you’ll have to take a few steps to line up your finances.

Set a housing budget.

Set a monthly housing budget that’s no more than 25% of your take-home pay—including principal, interest, property taxes, insurance and homeowners association (HOA) fees. Then, use our free mortgage calculator to see which home prices and down payments fit your budget.

Warning: When you apply for a mortgage, lenders usually look at your debt-to-income ratio (DTI)—this is your total monthly debt payments divided by your gross monthly income (before tax) written as a percentage. Many lenders use the 28/36 rule as a benchmark of a healthy DTI. This means, when you get a mortgage you won’t spend more than 28% of your gross monthly income on mortgage payments—and no more than 36% of your income on total debt payments (including the mortgage, student loans, car loans and credit card debt).

The 28/36 rule is not a smart way to see if you can afford a house. Why? Because debt is dumb! The 28/36 rule assumes you can handle paying for other debts on top of a mortgage. Maybe you can. But when home maintenance fees and emergencies come knocking on the door of your new house, things are going to get dicey. Plus, you won’t have any room left over in your budget to save for things like retirement or other financial goals.

Bottom line: Pay off all your debt before buying a house and stick to the 25% rule.

Save for a down payment.

Saving for a down payment is super important! With a big down payment, you’ll have a lower monthly mortgage payment and pay less interest over time.

Ideally, you want to save a down payment of at least 20% of the home price to avoid paying for private mortgage insurance (PMI). PMI is insurance that covers your lender (not you) if you stop making mortgage payments.

If you’re a first-time home buyer, a smaller down payment of 5–10% is okay too—but then you will have to pay that PMI fee. No matter what, make sure your mortgage payment is no more than 25% of your monthly take-home pay on a 15-year fixed-rate mortgage. And beware of bad mortgages like VA, FHA and 30-year loans—otherwise, you’ll end up paying so much more money in extra interest and fees, and you’ll be stuck in debt for decades.

Get preapproved for a mortgage.

mortgage preapproval speeds up the home-buying process. Your agent can show sellers a letter from your lender saying how much money you can borrow. That lets the seller know you’re serious and you really can afford their house.

Want to up the ante? Save up to pay all cash for a house. That way, you’re not messing with lender restrictions or crazy interest rates. And you’ll gain major negotiating power: Lots of sellers would love to get an all-cash offer, since it’s quicker and easier for them too.

If You’re Selling:

Sellers, to know you’re ready to sell your house with a real estate agent, make sure these things are in order:

Check your home equity.

Home equity is the portion of your home that you own. To determine your equity, subtract how much you owe on your mortgage from the current value of your home. You can figure out your current home value by getting an appraisal or having a real estate agent compare it to similar houses that sold in your area. Basically, you want to make sure you’ll be able to sell your house for enough money to pay off your mortgage and have a big enough down payment for your next house.

Cash flow staging and moving.

Some people don’t realize selling your house costs money. Sure, most costs are covered by the money you make from selling it. But you don’t want all that money to go to waste. So make sure you have some money set aside for staging your home, making repairs, and moving to your next house.

Know where you’re going to live next.

Before you sell your house, you need to know where you’re going to live next! You especially want to be ready in case your home sells quickly. You don’t want to rush into a home you can’t afford or don’t really like just because you didn’t plan ahead. Also, if you’re moving far away, research the cost of living in your new area to make sure you can afford the lifestyle shift.

3. Determine How to Find the Right Real Estate Agent

There are a ton of real estate professionals. So it’s smart to decide what kind of agent you’re willing to work with before you start looking. Consider things like:

Experience

Tons of new agents enter the real estate biz every year. And some new agents do a bang-up job. You may be thinking about giving them a chance—and that could work out. Or they could make a rookie mistake and cost you thousands of dollars. That’s a big risk! So we recommend looking for an agent with at least four years of experience.

Credentials

Certifications and professional memberships signal that an agent works hard to be the best. You may want to look for an agent with credentials like:

  • CRS (Certified Residential Specialist)
  • ABR® (Accredited Buyer’s Representative)
  • ASR® (Accredited Seller Representative)
  • SRES® (Seniors Real Estate Specialist)
  • REALTOR®
  • RamseyTrusted

Familiarity With the Local Market

General real estate experience is good, but your agent also needs experience in your area. If you’re moving to Los Angeles, hiring someone who knows all about real estate in San Diego won’t do you much good.

Look for an agent who’s closed a lot of homes in your area and who’s involved in the local community. Do they live, volunteer, or send their kids to school there? These things let you know you’re getting an agent who cares about location in more ways than one.

Track Record

A real estate agent’s track record of helping other clients can give you an idea how well they’re likely to perform for you. Look at things like:

Closing Rate:

Closing rates are where the experts shine. You want to find a real estate agent who closes more homes than 90% of the agents in their market, or at least 35 homes a year for smaller markets. Getting that kind of business takes hard work and a good reputation!

Don’t know how to check an agent’s sales records? We’ve done it for you with our Endorsed Local Providers program.

Closing Time

No, not last call. We’re talking about how long an agent takes to help a client buy or sell a home. There’s no guarantee they can meet a certain timeframe, but you can at least get an idea of what to expect—which is helpful if you’re trying to sell your home fast.

Accurate Pricing

You’ll have to do some simple math for this one. Ask an agent the average asking price and final sales price of homes they’ve listed. Then divide the final price by the asking price to get the sale-to-list ratio. The closer an agent’s sale-to-list ratio is to 100%, the more accurate their pricing.

Sellers, you’re looking for a real estate agent whose ratio is at or over 100%. That means you’ve got a better chance of getting the asking price—or more—for your house.

Buyers, you want an agent with a sale-to-list ratio below 100%. That means they’re a good negotiator who can likely help you get a good deal.

Keep in mind that, while the goal is to be over (seller) or under (buyer) 100%, the sale-to-list ratio percentage is dependent on the individual housing markets, which can vary a lot across the country. When comparing sale-to-list ratios between agents, make sure you’re comparing agents in your local market.

Communication and Customer Service

Look, you shouldn’t have to wait five days for a real estate agent to return your call or reply to a text. Bad communication could cost you opportunities, and then you’re both missing out! You need a responsive agent.

And look for someone who will tell you the truth about a home or even your own expectations. The last thing you need is an agent who gives you false expectations about your home. Like it or not, it’s in your best interest for them to call it like they see it.

Contracts

When you hire a real estate agent, you may have to sign a contract that lays out the terms for using their services and sets expectations for what they will—or won’t—do. A good contract helps protect the agent and you.

But be wary of agents who want to lock you into a lengthy contract you can’t get out of or charge you a cancellation penalty if they drop the ball. Also, know that some agents charge a termination fee to cover their marketing costs.

Cost

How much real estate agents get paid varies, but it’s usually around 3% of the sale price. (Usually, the seller pays the whole 6% for their agent and the buyer’s agent.) If an agent tries to charge way more, they could be trying to rip you off. And if they lowball the percentage, that may mean they don’t know what they’re doing.

Avoid Bad Real Estate Agents

Unfortunately, when you’re trying to find a real estate agent, you might meet some duds. You need to know how to recognize bad real estate agents so you don’t hire a schmuck.

Watch out for:

  • Inexperience
  • Poor marketing
  • Lack of leadership
  • Too much attitude
  • Failure to listen to you
  • Bad or no communication
  • No progress toward buying or selling a home
  • More focus on their commission than helping you

4. Know Where to Find Real Estate Agents

Okay, now you know who you’re looking for—time to start searching! To find a great real estate agent, you need to look in the right places:

Use a Referral Program You Trust

There are a ton of agent referral programs that vet agents for you—like our Endorsed Local Providers (ELP) program. Before using one, make sure you trust their vetting process.

For example, the real estate agents in our ELP program can’t just pay to play. They have to earn the right to be called RamseyTrusted by meeting qualifications like these:

  • Closing on more homes than 90% of the agents in their market or at least 35 closings per year 
  • Having at least four years of experience as a full-time real estate agent 
  • Participating in monthly coaching calls with the Ramsey team 
  • Sharing Ramsey values—meaning they’re on mission to serve you, have the heart of a teacher, and agree to work with you according to our financial principles called the 7 Baby Steps.

In other words, don’t use an agent referral program unless the agents they send to you are held to standards you value.

Research Online

You could simply do an internet search for “real estate agents near me.” The search results will likely pull up local agents available for hire. Take a look at each agent’s customer ratings and home closing stats to help you decide if you’d like to work with one.

Talk to Former Clients

Ask people who’ve recently bought or sold a house near you to describe their experience working with a real estate agent. Find out the good, the bad and the ugly. Of course, if you don’t know the person very well, take what they say with a grain of salt. But if you’re close with this person, it might be a sign you’ll share a similar experience if you work with the agent they hired.

Visit Open Houses

Open houses aren’t just a great way to shop around to find the home you want. They’re also an opportunity to meet potential agents and see how they work. So visit a few open houses and get to know the agents in the neighborhood where you’re buying or selling. This allows you to interview different agents secretly without feeling the pressure of having to choose one right away.

Don’t Work With Friends and Family

Let’s switch gears to address where not to find a real estate agent. One place to avoid is—brace yourself—your friends and relatives. Sure, you may think you’d feel more comfortable with someone you know, but it gets uncomfortable real quick.

For example, you may not want them peeking into your personal finances (like how much money you make). And if they make a mistake, it could cost you both tens of thousands of dollars. Can you face that tension every time you see this person? Are you willing to fire a friend who does a bad job?

Heck no! So don’t make the mistake of hiring family or settling for a mediocre agent (especially if that’s the same person). It’s possible to find a real estate agent you can trust and who you won’t see at Thanksgiving.

5. Interview at Least Three Real Estate Agents

So now that you’ve got some referrals (not your cousin Rebecca), how do you choose a real estate agent? You won’t pick the best one by flipping a coin, that’s for sure. You need to interview multiple agents. Yes—we said interview.

Remember, home purchases and sales are expensive legal transactions! If you want a true professional on your side, set the bar high.

Fortunately, separating the pros from the duds isn’t rocket science. You just need to ask the right questions. Here are some interview questions to ask:

  • How long have you been a full-time agent in my market?
  • How many homes do you close on per year?
  • How will you help me buy or sell a home in this market?
  • How will you communicate with me, and who’ll be my primary contact?
  • What sets you apart from other real estate agents?
  • What’s your commission fee?
  • Do I have to sign a contract with you, and can I cancel without penalty?
  • Who can I contact for a reference? (Be sure to get previous clients on this list.)
  • How do you set realistic expectations for your clients?

Asking questions like these sends the message you’re serious about finding a real estate agent you trust. And the ones who aren’t worth your time will usually fire themselves before you even have a chance to hire them.

If you want to know anything else, now’s the time to speak up! A great agent will patiently and thoroughly answer your questions.

6. Choose a Real Estate Agent

Expertise matters, but so does chemistry! You’ll spend a ton of time with your real estate agent over the next couple months. So while you don’t have to be best friends—in fact, it’s better if you’re not—you do need to gel with them, so to speak.

Even if they’re checking all the right boxes, you still need to ask yourself: Do I like and trust this person? Do they help lower my stress? Do they answer my questions and have a clear plan? The right agent will do all these things—not run around like a chicken with its head cut off.

Hire Someone You Can Trust

Chances are, you already know a few real estate agents who’d be happy to help you buy or sell a home. But with so much money on the line, it’s important to find the best agent for you.

That’s why we vet real estate agents all around the country to find the best of the best. The ones who meet our high standard for excellence earn the right to be called RamseyTrusted. And we help you connect with these agents for free through our Endorsed Local Providers (ELP) program.

The RamseyTrusted agents in our ELP program have been working full-time in real estate for at least four years (most of them have been working for way longer than that), close more homes than 90% of the agents in their market (or at least 35 closings per year—which is a ton!), and are held accountable to excellent service through our monthly coaching calls.

Don’t settle when you’re choosing a pro. Find the best real estate agent near you!

Interested in becoming a RamseyTrusted ELP? Let us know.

Are You Ready to Buy or Sell a Home?

Frequently Asked Questions

Are Real Estate Agent Fees Included in Closing Costs?

Yes, real estate agent fees are included in home closing costs. The commission fees are typically 6% of the home price. This commission is split in half—3% for the seller’s agent and 3% for the buyer’s agent. It’s common for the seller to pay for both agent commissions. In other words, working with an agent is usually free for the buyer—woo-hoo!

How Do You Ask Someone to Be Your Real Estate Agent?

Most real estate agents are easily reached by phone, email or programs like our Endorsed Local Providers (ELP). Our program makes it super simple to find real estate agents who are RamseyTrusted and are highly qualified to serve you with excellence. All you have to do is share some info about your home purchase or home sale, and then we’ll send you top agents in your area who you can trust. Hop on a call to ask the agents a few interview questions so you can choose the one you like best.

Can You Change Real Estate Agents?

Yes, in most cases, you can switch real estate agents. The only time this gets tricky is if you’ve signed an agreement to work with the agent for a period of time. If the time period hasn’t ended yet and you changed real estate agents, that’d violate the agreement. But if you have a really good reason for ending the agreement early, talk it out with the agent. A good agent will likely let you break the contract in order to maintain a solid reputation in the community.

Can You Negotiate a Real Estate Agent Commission?

Yes, you’re allowed to negotiate the real estate agent commission. Keep in mind, commission fees are usually 6% of the home price. This commission is split in half—3% for the seller’s agent and 3% for the buyer’s agent. Both agents do a ton of work to help you successfully close on a home. So if you’re going to try and knock them down in price, make sure you do your research and have a specific reason why. Also, if you sign any legal documents agreeing to pay your agent a specific amount, you’ll likely be held to that amount. So make sure you ask any questions you have about the commission before you sign anything.

What Can You Expect From a Real Estate Agent?

Simply put, real estate agents help you buy or sell a house. The best ones work in real estate every single day as their full-time job. If you’re selling your home, a seller’s agent (also known as a listing agent) should help you with a bunch of things, like deciding on the right price for your home, arranging for a home inspection and guiding you on what to fix, identifying how to stage your home for buyers, creating a marketing strategy to find buyers, helping you pick the right offer, negotiating the best deal, and walking you through the closing paperwork.

If you’re buying a house, a buyer’s agent should help you find a home for sale in your price range, research neighborhoods for best fit, attend open houses and showings, make a competitive offer within your budget, negotiate the contract, handle the home inspection, and gather all the paperwork due on closing day.

Rachel Cruze

About the author

Rachel Cruze

Rachel Cruze is a #1 New York Times bestselling author, financial expert, and host of The Rachel Cruze Show. Rachel writes and speaks on personal finances, budgeting, investing and money trends. As a co-host of The Ramsey Show, America’s second-largest talk radio show, Rachel reaches 18 million weekly listeners with her personal finance advice. She has appeared on Good Morning America and Fox News and has been featured in publications such as Time, Real Simple and Women’s Health magazines. Through her shows, books, syndicated columns and speaking events, Rachel shares fun, practical ways to take control of your money and create a life you love. Learn More.

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