As buying/selling a property is probably going to be the biggest financial transaction in your life, hiring a reliable real estate agent is well worth the effort. However, the sheer number and diversity of real estate agents make it difficult to choose the right one.

You are going to spend a lot of time with your real estate agent. He/she will also become closely familiar with your financials. Verifying a few other factors beforehand will help you make an informed decision.

Here are seven things you need to clarify and ascertain before hiring a real estate agent.

1) Licensing Details

The first thing you should verify is the licensing details of the real estate agent in question. The details will provide you with additional information such as if the person is allowed to conduct auctions or act as a buyer's agent only.

Most state regulatory bodies have posted this information online. You just have to enter the person's name or license number to verify their details. You can also use the Real Estate Licensee Verification Database, an online tool from the Association of Real Estate License Law Officials (ARELLO) to find licensing details.

2) Credentials and Memberships

Just like engineering or medical professions, real estate agents also have specializations. The National Association of Realtors (NAR) and its affiliated organizations provide more than a dozen specializations and certifications for licensed real estate agents.

For example, an Accredited Buyer’s Representative (ABR) is a real estate agent specialized in working with home buyers. Certified Residential Specialist (CRS), on the other hand, has completed additional training in handling residential estate transactions. It is the highest credential awarded to residential sales agents, managers, and brokers.

In addition to these credentials, the prospective agent should also have memberships with various real estate organizations such as NAR and ARELLO. This ensures that you are working with a reliable person who has pledged to abide by the code of ethics set by the respective organization.

3) Current Listings

Taking a close look at the current listings of real estate agents can reveal a lot about them. Just like the licensing information, you can find current listings online. The brokerage firm's own website is the first place to start your search. However, you should also search Multiple Listing Services (MLS) such as Realtor that offer a searchable online database of real estate properties.

Find out which types of properties are listed. You may not want to work with an agent whose online profile shows a long list of commercial properties if you are interested in buying or selling a family home. You can also verify other important aspects such as if the listings indicate a healthy business, the length of time for which the properties have been on the list, and the price range for a property similar to yours.

4) References from past Clients

Honest feedback from past clients can help you learn more about an agent. In fact, most agents are more than willing to provide you with the names and phone numbers of their past clients. To narrow down your list, speak with those ex-clients who sold or bought properties similar to yours.

The first question you should ask them is whether they were particularly satisfied or unhappy with the transaction and why. Find out the duration for which the property was on the market and the asking and selling price. Try to gather as much information about how the agent handled the complete transaction.

5) Average List Price to Sales Price Ratio

Even though the average list price to sales price ratio is closely related to market fluctuations, it is an important factor that one needs to consider when hiring an agent. It is the percentage of the actual selling price divided by the last asking or listing price of the property. For example, if the last asking price of your home was $200,000 and it was sold for $205,000, the ratio would be 102.5%. If the same house was sold for $195,000, the ratio would be 97.5%.

A listing agent should have the average ratio above 100%. The higher the ratio, the better. Buyer's agent ratio, however, should be slightly below 100%. Unfortunately, sometimes market fluctuations have no bearing on the average list to sell ratio. In such cases, it is best to avoid considering this factor.

6) Work Schedule

Most agents work full-time. However, there are more part-timers in the industry than you can imagine as most people need a second income to support their lifestyle. Whether you should work with a part-time or a full-time agent is completely up to you. After all, a good agent is a good agent regardless of the number of hours he/she works. However, make sure their work hours fit well with your spare time. Real estate agents often work weekends as this is when most open houses take place.

7) Real Estate Fees or Commission

Usually, the seller has to pay the commission or real estate fee to the agent. Sometimes, however, buyers may need to pay part of the agent's commission, particularly in hot markets. The commission is always negotiable. However, negotiating real estate commission is not as simple as saying, "I'm going to pay you less." The key is to identify the services you need and negotiate the fee accordingly.

Typically, you will have to pay a fixed percentage of the final sales price to the broker. Agents will get a part of this commission from the broker. Top agents may charge more than the average fee though. Plus, location, market condition, and infrastructure also play a crucial role in deciding the commission.

Conclusion

Picking the right real estate agent is the most crucial part of the home-buying or selling process. However, identifying the one that suits your requirements is like finding a needle in a haystack as there are plenty of excellent real estate professionals out there. So, whether you are looking for a Stapleton retail space or a family home in New Jersey, you need to choose the most qualified and trustworthy person for this job. Hopefully, these seven tips will help you gain clarity on a few important factors, making your search easier than ever. This list, however, is not exhaustive. So, feel free to share your tips in the comments section below.