How should I select a real estate agent in Toronto?
January 30, 2012 8:46 AM Subscribe
I need to hire an agent to buy a house. I know a couple of agents through my friends but I don’t’ want to rush and hire a person just because someone has referred them to me.
1. What are the basic criteria one should use to select an agent?
2. Are all agents suitable for all areas of Toronto? For example, let’s say I want to look for a house in Oakville. In that case should I hire an agent whose main market is Oakville or that doesn’t matter?
3. I don’t want to be pushed to make a deal. How should I clarify this with the agent?
4. Should I hire more than one agent?
5. How can I figure if an agent is working sincerely for me?
Thanks.
1. What are the basic criteria one should use to select an agent?
2. Are all agents suitable for all areas of Toronto? For example, let’s say I want to look for a house in Oakville. In that case should I hire an agent whose main market is Oakville or that doesn’t matter?
3. I don’t want to be pushed to make a deal. How should I clarify this with the agent?
4. Should I hire more than one agent?
5. How can I figure if an agent is working sincerely for me?
Thanks.
1-I would meet with the referred agents and see how comfortable you feel with them. If they push you hard to sign an agreement, you know they're not suitable. A referral from a friend is a very good start.
2-I would definitely want someone in the general area I was looking but IMO, I wouldn't want the absolute top agent in the area. A top seller is probably getting top dollar values for their properties.
3-You're going to look at a bunch of crappy houses. If you're viewing them without a spouse, bring a friend along for a second opinion. You'll learn to tune the agent out of your evaluative processes.
4-I don't think it's allowed. Your agent will want you to sign on for an exclusive relationship over a time period that you will both decide upon. You'll want to push for a shorter time period.
5- The agent only makes money if you buy a house, so be aware of that fact. They can be really helpful, but they are working for themselves. You need to quietly factor this into your mindset (but doesn't mean that they're horrible, conniving monsters). It's a matter of being friendly and straightforward with each other.
The biggest thing is to ask them lot's of quick questions about every property. You'll learn something from every house you look at. It's educational and can be fun, if you approach it with the right mindset and don't worry about appearing stupid. Some of the dumbest questions lead to the most illuminating info.
Try to be fatalistic; if you miss out on one house, that means there's a better one out there, waiting for you.
posted by bonobothegreat at 10:25 AM on January 30, 2012
2-I would definitely want someone in the general area I was looking but IMO, I wouldn't want the absolute top agent in the area. A top seller is probably getting top dollar values for their properties.
3-You're going to look at a bunch of crappy houses. If you're viewing them without a spouse, bring a friend along for a second opinion. You'll learn to tune the agent out of your evaluative processes.
4-I don't think it's allowed. Your agent will want you to sign on for an exclusive relationship over a time period that you will both decide upon. You'll want to push for a shorter time period.
5- The agent only makes money if you buy a house, so be aware of that fact. They can be really helpful, but they are working for themselves. You need to quietly factor this into your mindset (but doesn't mean that they're horrible, conniving monsters). It's a matter of being friendly and straightforward with each other.
The biggest thing is to ask them lot's of quick questions about every property. You'll learn something from every house you look at. It's educational and can be fun, if you approach it with the right mindset and don't worry about appearing stupid. Some of the dumbest questions lead to the most illuminating info.
Try to be fatalistic; if you miss out on one house, that means there's a better one out there, waiting for you.
posted by bonobothegreat at 10:25 AM on January 30, 2012
Don't be afraid of agents referred by friends, because that is how a lot of agents get business. It's a legitimate function of the real estate marketplace.
1.) As a buyer, get an agent. There is no cost to you and your agent will know the local market, they have resources on the ground to view pre-listings, your agent will have access to the local Canadian version of the MLS, and they will have assistants and office managers to help with the purchasing process. Hopefully, if needed, your agent will have trustworthy contacts in the home inspection and mortgage fields.
3.) If you are out to tire-kick houses, even the most professional agent will get sick and tired of wasting their time and money with your indecision. Certainly this is part of the risk of being a Realtor, but humans are human. Know what you want, understand your purchasing power, and be realistically committed to an engaged home purchase process. This will be to your benefit.
4.) No, do not hire more than one agent. You'll waste your time doing twice what can be done once.
5.) You can never be sure the agent is on the up and up, but as mentioned a Realtor's reputation is based on referrals and hard work. If they lose their reputation by being shady or pushy, their career is over. If this is really a concern for you, write your purchase contract for 90 days so you can walk away if you feel the need.
posted by lstanley at 10:45 AM on January 30, 2012
1.) As a buyer, get an agent. There is no cost to you and your agent will know the local market, they have resources on the ground to view pre-listings, your agent will have access to the local Canadian version of the MLS, and they will have assistants and office managers to help with the purchasing process. Hopefully, if needed, your agent will have trustworthy contacts in the home inspection and mortgage fields.
3.) If you are out to tire-kick houses, even the most professional agent will get sick and tired of wasting their time and money with your indecision. Certainly this is part of the risk of being a Realtor, but humans are human. Know what you want, understand your purchasing power, and be realistically committed to an engaged home purchase process. This will be to your benefit.
4.) No, do not hire more than one agent. You'll waste your time doing twice what can be done once.
5.) You can never be sure the agent is on the up and up, but as mentioned a Realtor's reputation is based on referrals and hard work. If they lose their reputation by being shady or pushy, their career is over. If this is really a concern for you, write your purchase contract for 90 days so you can walk away if you feel the need.
posted by lstanley at 10:45 AM on January 30, 2012
Best answer: I'm cranky about this, but in general its worth keeping in mind that your agent's primary incentive is for you to buy something, and that all things being equal in pursuit of that interest would rather that you, the seller, offer more rather than less, since a higher offer is more likely to be accepted than a lower one. Real estate agents are not bad people, but they are human beings who are affected by economic incentives. (Bonobo's point 5 says the same thing a little more gently.)
Also, its always been my impression that real estate agents discourage objective and data-driven comparisons between properties, and encourage the natural human instinct to make these decisions on an emotional and intuitive basis. Resist that urge. Research repeatedly shows that human beings are very bad at estimating what is in their long-term economic interest. Instead try to figure out costs/square foot, obsessively study how long properties have stayed on the market, compare features like street traffic, distance to metro, age of the roof, any facts and figures you can get your hands on, and then create spreadsheets and charts for comparisons. Don't rely only on the "comps" produced by your agent.
Finally, perhaps more constructively, I believe that Ontario and/or Toronto has introduced legislation that requires some kind of energy audit or energy usage disclosure prior to sale. This is valuable information (that would be great to have in the US as well). A house that uses less energy should be much more desirable than one that uses more. This disclosure will probably come in the final stage of the contract negotiations, so make it clear early on that you will walk away from the deal if it turns out the house is a leaky energy sink.
posted by RandlePatrickMcMurphy at 11:40 AM on January 30, 2012 [1 favorite]
Also, its always been my impression that real estate agents discourage objective and data-driven comparisons between properties, and encourage the natural human instinct to make these decisions on an emotional and intuitive basis. Resist that urge. Research repeatedly shows that human beings are very bad at estimating what is in their long-term economic interest. Instead try to figure out costs/square foot, obsessively study how long properties have stayed on the market, compare features like street traffic, distance to metro, age of the roof, any facts and figures you can get your hands on, and then create spreadsheets and charts for comparisons. Don't rely only on the "comps" produced by your agent.
Finally, perhaps more constructively, I believe that Ontario and/or Toronto has introduced legislation that requires some kind of energy audit or energy usage disclosure prior to sale. This is valuable information (that would be great to have in the US as well). A house that uses less energy should be much more desirable than one that uses more. This disclosure will probably come in the final stage of the contract negotiations, so make it clear early on that you will walk away from the deal if it turns out the house is a leaky energy sink.
posted by RandlePatrickMcMurphy at 11:40 AM on January 30, 2012 [1 favorite]
I sent a property listing from my neighbourhood to your Memail (based on your earlier question).
posted by bonobothegreat at 11:53 AM on January 30, 2012
posted by bonobothegreat at 11:53 AM on January 30, 2012
Best answer: 1. Word of mouth, you like them, you trust them, they aren't too over the top charming. Yelp and other reviews are good.
2. I'm not familiar with Toronto, but I live in a huge metro area and if I were looking at one end of the city I'd prefer an agent focused there rather than the other end. An agent who has to drive an extra hour (in my city, I don't know how big Toronto is, sorry) is not going to be happy about making multiple excursions. Might be more likely to push you into a home with fewer viewings of it or others. You want to be able to revisit a property.
3. Set your boundaries, don't sound or be wishy washy. If a house is not what you want, move past it. Avoid words like "maaaaaybe." Be clear about what you actually want. If 3 bedrooms is a must, don't say you might be ok with 2 and a den. If you need to be able to walk to x or y, then test it out, can it be walked. If the house fails the test, keep looking! If you have a budget, be honest about what it is.
4. I have no idea if this is allowed. I can imagine that an agent who lines up 5 houses for you to visit in a day will be miffed if you've already visited 3 with a different agent. Each agent is trying to maximize their $/hour, so if they know that another agent is doing the same research they may not be as motivated. Two unmotivated agents may be less help than one super go getter.
5. They aren't. They really, seriously, honestly just are not working for you. They only get paid if you buy the house, and with them on the contract. They don't get paid any more if you like or love or hate the house you bought. They don't get paid any (substantial amount) more if you buy the house the first week they're helping you or the 6th month. Obviously then, they are motivated to get a sale in week one. But if you become worried that your agent is behaving unethically on your behalf, or is not working within the boundaries you set above, can them and move on. If you end up finding a house without an agent of your own, negotiate with the seller if possible to decrease the commission. I say this because two agents will split the 6% (here in the US), so a seller's agent may be willing to take 4 or 5 to make the sale happen. This is like any otherbusiness relationship. If you don't feel good about it, you have permission to move on, within the restrictions of your contract. Don't sign anything unnecessarily restrictive of you. (Some agents will try to get you to be exclusive for x months, which means if you fire them you can't get another agent until the time runs out....you can imagine the pressure this puts on people to stay in a bad relationship?)
Beyond your questions, some links that I've passed around to friends recently.
10 Things your Real Estate Agent Won't Tell You
How Real Estate Agents Sell Their Homes for More
You didn't ask about inspections, buy you should know
Buying a house is a lot like buying a car. There are some questions you can ask to find out about potential problems. Just like no car seller in their right mind is going to fess up right out of the gate that they never changed the oil, you can ask for the maintenance records, right? So, houses have similar things. When were the windows installed? How old is the roof? Has the basement ever flooded? Has the city forced an upgrade to sewer or is the house still on septic? Who installed the sewer lines/maintains the septic? Is there well water? When was it last tested? Has there ever been asbestos abatement? Electrical upgrades? Additions? Anybody ever run a car into the living room through the front windows (yes, really)? Why are they moving out? Many cities don't require notification of the buyer if you're getting a meth house. So whatever anybody tells you, dig deeper. Don't believe the first answer, get documentation of everything. Google the address. Is it unsoundproofed and right under the airport flight path? Does an ambulance roar past three times a night? Has the school system gone crappy?
Be present for all inspections, request, require, demand leak testing of any sky lights and windows and doors. Ask lots of questions if you see something that looks unstable. Get a second inspection if you're at all nervous about any of the answers. It seems like a lot to pay for two inspections, but some of the home repairs I've seen my friends subjected to have been in the tens of thousands of dollars. If you know about them before you sign a contract, you have negotiation power. Or you can walk away. Discovering after you've moved in that ___ or ____ or ____ is a problem is not fun. Don't be satisfied with an inspector just peering into a crawlspace. If a space is blocked shut and shouldn't be, get it opened and inspected. Lift up the carpets and peek under each corner for yourself. Is the caulk or grout in the bathroom too new? There may be water behind that wall. Water leads to rotting. How much water got back there before this cosmetic fix was slapped on?
For further inspection freak outs, check out Mike Holmes, who is based in Canada and has (or had) a TV show on HGTV. His company probably protects itself like every other and has a clause that they are not responsible for items they did not or could not see. So follow the inspector around politely and ask gentle questions.
posted by bilabial at 1:27 PM on January 30, 2012 [1 favorite]
2. I'm not familiar with Toronto, but I live in a huge metro area and if I were looking at one end of the city I'd prefer an agent focused there rather than the other end. An agent who has to drive an extra hour (in my city, I don't know how big Toronto is, sorry) is not going to be happy about making multiple excursions. Might be more likely to push you into a home with fewer viewings of it or others. You want to be able to revisit a property.
3. Set your boundaries, don't sound or be wishy washy. If a house is not what you want, move past it. Avoid words like "maaaaaybe." Be clear about what you actually want. If 3 bedrooms is a must, don't say you might be ok with 2 and a den. If you need to be able to walk to x or y, then test it out, can it be walked. If the house fails the test, keep looking! If you have a budget, be honest about what it is.
4. I have no idea if this is allowed. I can imagine that an agent who lines up 5 houses for you to visit in a day will be miffed if you've already visited 3 with a different agent. Each agent is trying to maximize their $/hour, so if they know that another agent is doing the same research they may not be as motivated. Two unmotivated agents may be less help than one super go getter.
5. They aren't. They really, seriously, honestly just are not working for you. They only get paid if you buy the house, and with them on the contract. They don't get paid any more if you like or love or hate the house you bought. They don't get paid any (substantial amount) more if you buy the house the first week they're helping you or the 6th month. Obviously then, they are motivated to get a sale in week one. But if you become worried that your agent is behaving unethically on your behalf, or is not working within the boundaries you set above, can them and move on. If you end up finding a house without an agent of your own, negotiate with the seller if possible to decrease the commission. I say this because two agents will split the 6% (here in the US), so a seller's agent may be willing to take 4 or 5 to make the sale happen. This is like any other
Beyond your questions, some links that I've passed around to friends recently.
10 Things your Real Estate Agent Won't Tell You
How Real Estate Agents Sell Their Homes for More
You didn't ask about inspections, buy you should know
Buying a house is a lot like buying a car. There are some questions you can ask to find out about potential problems. Just like no car seller in their right mind is going to fess up right out of the gate that they never changed the oil, you can ask for the maintenance records, right? So, houses have similar things. When were the windows installed? How old is the roof? Has the basement ever flooded? Has the city forced an upgrade to sewer or is the house still on septic? Who installed the sewer lines/maintains the septic? Is there well water? When was it last tested? Has there ever been asbestos abatement? Electrical upgrades? Additions? Anybody ever run a car into the living room through the front windows (yes, really)? Why are they moving out? Many cities don't require notification of the buyer if you're getting a meth house. So whatever anybody tells you, dig deeper. Don't believe the first answer, get documentation of everything. Google the address. Is it unsoundproofed and right under the airport flight path? Does an ambulance roar past three times a night? Has the school system gone crappy?
Be present for all inspections, request, require, demand leak testing of any sky lights and windows and doors. Ask lots of questions if you see something that looks unstable. Get a second inspection if you're at all nervous about any of the answers. It seems like a lot to pay for two inspections, but some of the home repairs I've seen my friends subjected to have been in the tens of thousands of dollars. If you know about them before you sign a contract, you have negotiation power. Or you can walk away. Discovering after you've moved in that ___ or ____ or ____ is a problem is not fun. Don't be satisfied with an inspector just peering into a crawlspace. If a space is blocked shut and shouldn't be, get it opened and inspected. Lift up the carpets and peek under each corner for yourself. Is the caulk or grout in the bathroom too new? There may be water behind that wall. Water leads to rotting. How much water got back there before this cosmetic fix was slapped on?
For further inspection freak outs, check out Mike Holmes, who is based in Canada and has (or had) a TV show on HGTV. His company probably protects itself like every other and has a clause that they are not responsible for items they did not or could not see. So follow the inspector around politely and ask gentle questions.
posted by bilabial at 1:27 PM on January 30, 2012 [1 favorite]
This thread is closed to new comments.
1. I would make sure you have a buyers' agent. I'm not sure how this works in Canada, but in certain parts of the US, you can buy a house without a buyers' agent. We worked without a buyers' agent in one state and with a buyers' agent in another state (we moved to a place right on the border of two states). I very much enjoyed our experience with the buyers' agent, since it felt like it was working together. With the sellers' agent, we always felt like we had to keep some cards close to our chest, which was frustrating. Don't get me wrong; the agent that worked with us that was part of the sellers' agent company was great and we actually ended up buying a house with her, but if I had to do it again, I'd definitely recommend getting a buyers' agent.
Beyond that, I would go with an agent highly recommended by someone you trust who has recently bought a house with that agent. I think it's very hard to judge an agent without a personal testimonial.
2. Don't know about this; hopefully others will respond.
3. Good agents shouldn't push you. However, you should be careful about what you say, since many may interpret this statement as you not being serious about buying. I would say to the agent on your first meeting that you want to take your time to find the right home for you.
4. I wouldn't, since that can get messy. For example, if Agent A shows you a house, then you end up buying that house with Agent B it's not 100% clear how to divide up the commission. I would find someone you trust and go with that person.
5. Again, in the US, agents are required to state explicitly who they work for (i.e. if they are a buyers' agent, so they are agents for the buyers or if they are sellers' agents and treat the buyers as customers). Generally, if you have a good agent who's also a buyers' agent, there should be little doubt that they're working for you.
posted by Betelgeuse at 9:16 AM on January 30, 2012