Choosing a real estate agent
Friday, July 4th, 2014
Issue 27, Volume 18.
At the outset, let me say that we will not address the politics of choosing an agent who is a family member or the relationship dynamics of choosing a close personal friend. Problems or challenges with a home sale can put such relationships at risk.
Many people receive real estate licenses each year, but relatively few make it a lifelong profession. Regardless, you want an agent with significant experience in the industry, a history of successfully selling homes in your price range, and one who is familiar with your neighborhood market. You want an agent whose references check out.
A real estate agent or broker must be licensed in the state in which they work. Each state establishes minimum standards for education, examinations and experience.
Certified REALTORS® are real estate agents who have joined their local board or association of REALTORS® and the National Association of REALTORS®, a large professional trade organization.
These real estate professionals subscribe to the association’s Code of Ethics, participate in annual extended education courses and also have access to the Multiple Listing Service (MLS). The Council of Residential Specialists (CRS) website lists agents who specialize in various types of residential property sales.
Here are some suggestions for choosing a real estate agent.
Search online for real estate sites that list homes for sale/sold/foreclosures in your neighborhood. Make a list of the top three or four firms and agents that listed and sold those homes in the last 12 months.
Scan the local newspaper for real estate ads in your neighborhood. Note the agencies with the most ads and most properties that they are marketing.
Look for the open houses in your neighborhood and visit the agent. See how the agent conducts him or herself and how knowledgeable they are about the neighborhood and the house. Test their reactions to your objections.
Ask friends, neighbors, co-workers, and perhaps your accountant or attorney for recommendations.
Compile a list from your research and from recommendations.
Call the agents you’ve selected and set up "no obligation" listing presentations; in these meetings, the agent will provide you with information to assist you in making initial selling decisions as well as giving you reasons why you should list with him or her.
Listen to more than one presentation and weigh the "pros and cons" of each. Do not make an impulsive decision; there is a listing period – usually three to six months -- that you are contractually obligated to honor.
Before your first meeting, be sure to have a ballpark home value based on recent home sales in the area. Be sure to account for various amenities (pools, additions, upgrades, etc.). Calculate the average price per square foot and multiply that by the square footage of your home for a ballpark value.
Treat this meeting like an interview; after all, you will be entrusting your most valuable non-personal asset to this person. The agent needs to disclose their agency relationship and they should have an active real estate license in good standing in this state.
He or she should have researched your property in thepublic records and MLS, and have a list of comparable sales, a list of current homes for sale, and a marketing plan. That marketing plan should include current market conditions, whom your target audience is and have a multi-media plan to maximize the exposure of your home (MLS, internet, newspaper, etc.). You should ask what differentiates him or her from other agents or what sets their marketing plan apart from others’.
Look for enthusiasm about your property; he or she should have suggestions on how to prepare your specific home for the market. Compare their suggested listing price with the ballpark price you calculated and ask for their basis of comparison if the difference is larger than $10-15,000. Beware of those agents trying to "buy your listing" by pricing your home too high for the market.
Inquire about their number of listings per month, their home sales in the last three, six, and twelve months, how long it took them to sell the homes, and how close their selling price was to the listing price of homes they have sold. Do they cooperate with buyers’ brokers? What commission will they be offering to the cooperating broker who finds/brings the buyer?
The lowest commission may not always be in your best interest. Incentive plays an important role in sales: advertising and service.
Narrow down your options to those who answered your questions satisfactorily. Look for an agent that listens attentively to you, understands your goals, instills confidence, operates professionally, and has a personality style that you can relate to. If you want the most money for your home, choose the agent with the smallest difference between listing price and sold price. If speed is an issue, choose the agent with the highest productivity and the shortest listing to sold time frames.
Real estate agents from large, reputable firms often have a larger network of people who can spread the word about your home; they also typically have larger advertising budgets and have back-up persons with whom you can communicate.
Agents that represent both buyer and seller ("dual agents") are supposed to be working for both the buyer’s and the seller’s best interests. In many situations, this may be difficult to do. A large amount of money is at stake – buyers want the lowest price and sellers want the highest price. You want to work with an agent whose commission is dependent upon their willingness to fight for your best interest.
Ask for references and call two or three sellers they have represented. Verify that that the agent handled the home sale to their satisfaction. Ask about any problems or anomalies encountered and how the agent handled the situation to everyone’s satisfaction. Ask about their communication skills, responsiveness and accessibility.
For Sale By Owner (FSBO): This can be done, but is not typically an easy undertaking. The most common reason for this option is to save paying real estate commissions, usually 5-6 percent of the selling price. The same work exists: market appraisal, marketing the property, disclosures, price negotiations, contracts, buyer qualification, escrow, title, etc.
Access to the MLS and other limited services may be available from certain brokers who are willing to unbundle their services for a predetermined fee. Owners take the risk of financial and legal liability.
Choosing the right agent can save you time, effort, and aggravation in selling your home in the right time frame and for the right money. Do your "home"work and choose wisely.
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