Zillow, Trulia, Realtor.com — with so much information on the internet, do you really need a Realtor?
The answer is likely yes. In this era of all-cash buys, where many listings bring multiple bids, having a local expert with the resources of a professional organization makes it easier for a buyer to know a good deal when she sees it — and to act quickly. With access to the Multiple Listings Service, Realtors can set alerts for homes that meet specific requirements, so their buyers get a jump on slower shoppers. And in Florida, anyone calling himself a Realtor must be licensed and complete continuing education classes, meaning they should be up-to-date on regulatory changes.
Besides, who wants to hunt down tax and insurance information and negotiate a legal deal without good advice?
Bottom line: Buying a home is one of life’s biggest purchases — and one of the most complex.
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“It’s a whole process, the purchase,” says Howard Elfman, broker/owner of Weichert Realtors in Fort Lauderdale. “Once you agree on a price—that’s not the hard part.” Real estate reality TV shows don’t delve into the paperwork and legalese that constitute the less sexy stages of the deal.
Sales actually tend to take between a month and six weeks at the moment in the South Florida market, says Christina Pappas, a Coral Gables broker with Keyes Realty. A buyer could log many hours shepherding a deal through six weeks of negotiation and closing.
Experience counts. Like the economy itself, real estate runs in cycles. A Realtor who has been through at least one round of rising prices followed by a downturn will add perspective.
That may not be the case with newer agents. The number of brokers in Miami has ballooned by 20,000 since the 2009 crash, says Peter Zalewski, managing principal of Condo Vultures, a real estate consultancy. And that, he says, should give buyers pause. “Most [new agents] are novice newbies, and they think they can make a quick hit and not have to punch a clock every day.”
To work effectively with a Realtor, it helps to have some understanding of how brokerage works in Florida. Associates must take a course and pass a test before getting a state license and must work with a a broker, who holds a more advanced license. Along with having a state license, a Realtor is a member of a professional organization with an ethics code that mandates that they disclose all offers and certain relevant information and “act honestly and fairly” to both parties.
In most cases, the seller pays the brokers’ commission — typically 6 percent — which may be split between the listing broker, selling broker and the companies they work for. In some cases, the total is only 5 percent. And with some new Miami condo developments, the commision is as high as 10 percent, say experts. That can sway a broker’s choice of properties they show to perspective buyers.
“You need to recognize that the Realtor…works for the deal,” Zalewski says.
Experts advise asking the broker what percentage a completed deal pays, and how it is divided between the listing and selling parties.
Let’s bust another TV myth: The most aggressive broker may not be your best representative.
“You may say you want a bulldog, and that may be good with choosing an attorney,” Elfman says. But he recommends a softer touch with a Realtor.
“There are some very argumentative people. They don’t realize that that alienates other Realtors,” he says. And other Realtors are important—the listing agent will decide if he or she has time to show you a home, for instance.
Patience and an ability to listen are key qualities for a good Realtor.
“You’re going to want to see [the home] in the daytime, at nighttime and both again” a second time before you’re ready to buy, says Ron Shuffield, president and CEO of Esslinger-Wooten-Maxwell Realtors. So patience is key.
You want a Realtor with long-standing knowledge of the relevant market, who knows where his or her expertise begins and ends. Ask how long they’ve been selling in the specific neighborhood and how often they attend broker previews of upcoming listings.
A good way to test an agent’s acumen is to ask about comparable sales in the neighborhood or price-point, says Alicia Cervera, chairman of Cervera Real Estate in Miami.
“Comps are good but not perfect,” she says. A good agent will be able to sort out the outliers and can help fill in the picture when there aren’t enough comps, such as in an emerging neighborhood. “The comps from the MLS [Multiple Listings Service] are even better than the tax roll,” when you have them, Cervera explains. But “you want the Realtor to explain why they are using the comps they are.”
A good Realtor should also be able to provide estimates for taxes, hurricane insurance and other ongoing expenses related to any property you consider.
Any home with mortgage financing in South Florida will generally need to carry hurricane insurance, formally known as windstorm insurance. Prices are specific to both the neighborhood and the house. They can also cause sticker shock for out-of-towners. “Hurricane insurance is the silent killer” of real estate deals, Zalewski says.
But you don’t want a Realtor who’s sure it will cost an exact figure. “I would be wary of a Realtor that has all the answers to this question,” Cervera says. Instead, a broker should provide recommendations of two or three insurance companies that cover properties in that neighborhood and be able to tell you if the property is in a flood zone.
“A smart Realtor is going to say they don’t know, make three calls one to lender, one to broker and one to insurance agent,” Zalewski says.
Questions shouldn’t stop with the cost of hurricane insurance, Elfman says. Both the buyer and the Realtor should ask about the age of the roof, whether the property has hurricane shutters or impact windows, and when the electrical system was last updated.
In general, overconfidence and having all the answers is a red flag. “You don’t want someone who wants to be your insurance appraiser, your accountant, your lawyer, your mortgage broker and your interior designer,” Cervera says. “If they are offering every service, personally, I would be skeptical.”
One resource a Realtor should have ready is up-to-date information on the relevant school district, says Pappas, who is also a vice president of Florida Realtors, a trade organization. Because districts’ dividing lines can shift and some schools have lotteries for attendance, it’s important not to rely on looking up the nearest school on the internet. “Sometimes there’s a school across the street, but you aren’t zoned for it,” Pappas says.
A Realtor who specializes in a specific neighborhood may also be aware of properties soon to hit the market along with local resources like specialty shops and repair people.
And once you’re set up in your new home? Your Realtor “should also be able to get you an intro to the local tennis club,” Shuffield says. Then you’ll know you’ve chosen well.
Ask your prospective broker:
1. How long have you been licensed?
2. Where do your comps come from and why are they the most accurate look at value in this neighborhood?
3. What is the average number of days on the market in this area?
4. What is the five-year outlook for this neighborhood?
5. Will this home require hurricane insurance, and can you or a recommended insurance broker provide a range for the cost?
6. What percentage will you be paid for completing a sale?