Episode #28 - Home Ownership: How to Work With a Real Estate Agent
Announcer: Welcome to The Money Clip podcast series from The Vault, Scotiabank's online guide to helping Canadians get ahead financially. Listen in to gain a deeper understanding of your personal finances and find out how a few small changes to the way you manage your money can make a big difference.
Michael Seaton: Thank you for joining us on The Money Clip podcast series from Scotiabank. I'm your host, Michael Seaton, and with The Money Clip, we provide Canadians with a deeper understanding of personal finance and money related matters. This is our home ownership series and today we will look at things to consider when working with a real estate agent. Selling your home is a big step and to understand the ways to maximize your sale price, we are joined by Mark Salerno of CMHC, Canada Mortgage and Housing Corporation. Welcome, Mark.
Mark Salerno: Thank you.
Michael Seaton: Let me start by asking what a real estate agent does. What role do they play? And what are the advantages of having an agent help you in the home buying process?
Mark Salerno: Well, first and foremost, they're helping you to find the home that you want, and they're evaluating neighbourhoods to do that. They're pre-screening homes so you see only what fits your wants and your needs and your budget. Then when you do find a home that you're willing to place an offer on, they're going to help you to get the best deal possible and write up an offer of purchase.
Micheal Seaton: And how do you find a real estate agent? What are the kinds of questions you should ask to determine if they're the right fit for you?
Mark Salerno: Okay. Well, first of all, you can certainly rely on word of mouth, referrals, you may interview potential agents, family members may have worked with agents and that's a good place to start. You can also check local real estate board websites. You should feel confident and comfortable with your agent, so you'll want to determine whether they're familiar with the neighbourhood that you're looking to buy into, and preferably, that they would have an office in that neighbourhood. You want to ensure that they demonstrate their knowledge of that particular housing or condo market, depending upon what you're looking at. Ask if they've had experience working with first-time home buyers, as well, and, you know, situations similar to yours, and how many buyers they may be working with presently. Lastly, do they work in partnership with other agents or use assistants.
Michael Seaton: And does the agent see the process all the way through to completion? And at what point do other members of your home buying team typically get involved?
Mark Salerno: Okay, well certainly they should be there right from the start, and it's very important early on, even before you begin looking at homes, that you enlist a realtor to help you out. Then throughout the process, they will be able to guide you as to when the other various professionals should be brought in. For instance, mortgage brokers or lending institutions who could help you to be pre-qualified, for instance, for a mortgage; as well, bringing in home inspectors and, as well, a lawyer.
Michael Seaton: And how are real estate agents compensated? Who pays them, is it the buyer or the seller? How does that work?
Mark Salerno: Well, part of the proceeds of the sale and the funds going to the seller, they will actually pay the listing agent. And then the listing agent will actually pay the buyer's agent, and usually it's in the order of 50%.
Michael Seaton: So, Mark, we've talked a little bit about finding the right real estate agent by asking the right kinds of questions to determine if they're right for you. But what does it really boil down to? What is the most important thing to look for in an agent? Does it come down to personal choice and level of comfort with that individual?
Mark Salerno: Well, you know, all things being equal—we've talked about a lot of the different characteristics—assuming that those all work out, in the end, it's going to come down to, I think, a personal relationship. You'll be working with this individual for many, many weeks and potentially months. And it's also a very stressful time; you'll have many questions. You want to ensure that they're going to be responsive to your needs and open to responding to your questions and dealing with, again, what is a very stressful situation.
Michael Seaton: And in terms of the relationship, that can build over time and this may not be your last house. You may want to put it up for sale and find another and so it helps to-
Mark Salerno: -Exactly.
Michael Seaton: -have that relationship. Well, Mark, thank you very much and that will wrap up our look at working with a real estate agent. Thank you for sharing your insights here with us, and thank you to our listeners for joining us and we hope you will return for the next Money Clip podcast from Scotiabank.
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