Take time when hiring a real estate professional

I bought my first home in Toronto about 15 years ago. It was a onebedroom condo downtown and I spent months shopping around for the perfect place based on my admittedly low budget.

But when it came to choosing the person who would help me buy (and eventually sell) my home, I let my guard down. Truth be told, I chose my real estate agent in about five minutes — a fraction of the time it would take for me to buy a pair of jeans or choose a shade of lipstick. I picked a family friend without talking to any other agents; I figured since I knew her, she’d do a good job. I didn’t ask any questions about the 5 per cent commission she charged, and I definitely didn’t ask about references or qualifications.

Basically, I made every mistake in the book: I simply hired the first person that came along.

That’s actually a pretty common approach to hiring a real estate agent these days. And it’s too bad, because agents don’t work for free. In fact, an agent’s commission is a huge part of the expense of buying or selling a home. Granted, you feel the pain of agent’s fees a lot more acutely when you’re selling your place. But that doesn’t mean you shouldn’t pay attention to what your real estate agent is getting paid.

Let’s break it down based on the average price of a home in the GTA, an astounding $639,184 (expect to pay over a million if you insist on buying something detached):

Average home price in Toronto = $639,184

Typical real estate agent’s commission = 5 per cent

Total commission paid to agents on sale of home = $31,959.20 (remember, that’s split between the buying and selling agent, but the commissions are deducted from the amount the seller gets).

You have to ask yourself, if you were buying something for more than $31,000, would you shop around first?

I ended up doing just fine with my friend as an agent. She spent months taking me to countless open houses, she worked hard, was knowledgeable and had the qualifications to do the job.

But I got lucky. I wouldn’t recommend my hiring approach to anyone. Instead, here are a few good rules to remember: Don’t be afraid to negotiate on commission. Depending on how easy or tough your house is to sell, you might be able to talk an agent down on his or her commission. It’s worth a try, and it could save you thousands. Be warned: if you get stuck on commissions alone, you could end up hiring the cheapest but not necessarily the best person for you. Interview a few people. Given that your home will likely end up being your biggest asset, you should take the time to choose the right person to make the transaction for you. That means checking qualifications (real estate agents do have quite a few hoops to jump through to get a license), getting references if possible and making sure the person has experience in the neighbourhood you’re focused on. Don’t hire a friend. While I was lucky, things could have gone south pretty fast if my agent turned out to be a dud. That’s a ton of money to be paying someone close to you, and if you’re of the mind that money and friendship don’t mix, keep away from this kind of arrangement.

Check qualifications, get references and make sure the person has experience in the neighbourhood you’re focused on