Understand the Context

Select a real estate agent as if several hundred thousand dollars, your home, and your relationship(s) depend on it. They do.

Quick review on Real estate agents…

• Acts as quarterback from the start of the home search through closing.
• Are generalists; very few have legitimate experience in co-buying.
• Are salespeople paid a commission on closing.
• Have a nuanced fiduciary responsibility to you: loyalty, confidentiality, full disclosure, reasonable care.
  

But bear in mind...

⚠️ There are information asymmetries.

⚠️ Because you’re (most likely) not a licensed agent, you’re at a relative disadvantage.

⚠️ An agent’s interests are “rarely identical” to yours.

⚠️ Agents are not always legally required to represent your interests (and many don’t).

⚠️ The National Bureau of Economic Research finds that “...the short training period and low standards in the real estate industry” suggest that the industry has a high fraction of charlatans.

The best way to address these challenges: be intentional and stringent in selecting the best agent possible.

Selection Criteria

As professionals in the space, our litmus test is simple when evaluating a real estate agent’s fit—“would we use this agent?”

Characteristics:

➕ Transparency

➕ Accountability

➕ Credibility

➕ Accessibility

It’s not by chance. These as our values at CoBuy, and we’ve evaluated all CoBuy-certified™ Professionals against these criteria. But going further, you can assess an agent’s suitability across qualitative and objective criteria before signing them on.

RE Agent Selection: Qualitative Criteria

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RE Agent Selection: Quantitative Criteria

* If you aren’t able to find evidence through traditional online channels or your state’s Department of Licensing (or equivalent), ask for proof.

🌎 Real World Example

One of our strongest RE Agent relationships is with Don Koonce, a Seattle-based CoBuy-certified™ RE Agent. A quick Google search and review of Don’s professional social media profiles confirm his suitability according to the above criteria.

You can also tell he’s a rad dude who cares deeply about his clients and is delightful to work with!

References: Don’s blog, Don’s FB page

Questions For Agents

We strongly suggest you and your co-buyer(s) arrange a meeting with a real estate agent you’re considering hiring. This is a great opportunity to learn, listen, and ask questions. All co-buyers should be present, whether you’re a group of two or ten.

The following questions are a great place to start.

• How long have you been a full-time RE agent?
• How many transactions do you do a year? How does this break down between listings and buyers?
• Do you work with repeat customers? Examples?
• Do you work on a team? If so, how is it structured?
• What happens if you’re not available?
• What are your strengths as an agent? Where do you want to improve?
• Why do you do it?
• Can you explain how your firm works, your role, and why you’re with them?
• How many co-buyers have you worked with in the past?
• Where have problems or challenges come up in working with co-buyers? How did you deal with these?
• Do you know [our loan officer]? Have you worked with them before?
• What systems do you have for communicating with all parties at each critical step?
• Do you have professional contacts in related fields like tax, accounting, or law?
• How do you handle Buyer’s Agency Agreements?
• Can you explain how you deal with commissions?
• If we decide to work with you, please outline your process.*
• What do you bring to the table?**
• What questions do you have for us?***

* Should be clear and align with what you learn in this course and your research.

** If they don’t explicitly state they’re good at negotiating the Purchase and Sale Agreement, keep looking. You need an excellent negotiator.

*** They should have a structured line of questioning at the ready. If they don’t, it’s a red flag.

Expect reflexive and natural answers to all of these questions. If a RE agent can’t impress you with their delivery of what they do every day, they’re unlikely to be your strongest advocate in negotiations.

Other Considerations

Through dealing with thousands of co-buyers since 2016, we’ve learned what works and what doesn’t.

Consider the following recommendations based on our validated learning.

1. Don’t select an agent because they’re a friend or relative.

Statistically, most folks in the US know at least one real estate agent. There are two strong reasons you don’t want to go this route. First, simply knowing someone doesn’t mean that they’re the right person for this job. They’re almost certainly not. Second, personal relationships can cause problems. Your buddy, who is an agent, may prioritize your interests over the interests of your co-buyers(s). Find the agent who is the most highly qualified candidate for this role and is positioned to be objective.

2. Don’t use a discount brokerage or online platform.

Your transaction is more complicated than a traditional purchase. Discount brokerages address the mass market by default. Not co-buyers. Trying to fit a square peg into a circular hole is a recipe for disaster. Likewise, online platforms serve traditional, “plain vanilla” purchases. Many are backed by Venture Capital firms, run by software engineers, and designed to minimize human interaction. Co-buyers require human interaction. No tech platform designed by software engineers is capable of solving the matrix of your problem set.

3. Don’t assume that an agent with the highest production is best.

Teams back most real estate agents who do hundreds of transactions a year. Selecting one of these personalities doesn’t necessarily mean you’ll be working with the big dog: you probably won’t.

4. Do sign a Buyer’s Agency Agreement with your agent.

A Buyer’s Agency Agreement may not be necessary in your state, but it’s a good idea. This is a simple document that outlines the relationship between you and the agent you choose.

ℹ️ Note: At the time of writing, 17 states require a Buyer’s Agency Agreement.

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👉 CoBuy-certified™ Real Estate Agents

Looking for a veteran Real Estate Agent with expertise dealing with co-buyers? Check out CoBuy-certified™ Pros.