Toni, they usually have a pretty good idea of what editors currently want. And this comes with practice and networking with them. If they want to add a genre to their list, I'm certain that they do a lot of research beforehand so they know what they're getting into. When an agent has exhausted all of the choice, large houses, then I suppose they would do some book cracking to find the mid and smaller publishing houses. But alas, many agencies who've been in business for years, have tons of notes and tips on the smaller guys too. But they must forever be on the lookout for brand new houses that open up, so they can be properly investigated too. They work incredibly hard to stay on top of the market place. They know that one slip, can lead to another sale by another competitor.
Tri