Listing your home is a BIG deal and you want to ensure you are choosing the right agent to get the job done. We are talking thousands lost if you choose the wrong agent. Many believe the agent that gives the highest list price and/or discounts their commission is the best choice. This could cost you ALOT of money in the end.
It is important that you choose an agent that is an EXPERT. Not a fly by night agent looking to make a quick dollar.
At first glance, a seller might say, "You are insane?" because sellers want the highest possible price and to pay the least amount of commission. But those two criteria have very little to do with hiring an agent compentent in their field and, in most instances, are irrelevant. Let's look at why.
The Highest Suggested List Price
Agents do not have a crystal ball that tells them exactly what your home will sell for. A listing agent can go over comparable sales, pending sales, and active sales and give you a recommended list price. But YOU choose the list price ultimately, and buyers will tell you if the price is right. An agent can suggest the list price that will attract a buyer. Where it goes from there is generally left up to the buyer.
To Get the Listing, Some Agents Inflate Reality: Since agents are unable to gurantee you will get offers at list price, the listing agent who suggests the highest price could in fact just be attempting to secure the listing and then bully you to reduce price after it doesn't sell. Ask the agent to show you numbers supporting the suggested list price. If the agent has no stats or the home sales are located in a different neighborhood, that could be a red flag.
Look for a Listing Agent Who Gives You a Range: There is often, but not always, a range of value. It might be apart $5,000 on the low-end versus the high, or the difference could be greater. Many factors determine the range; location of the home, improvements made to the home, time of year homes sold, etc. Ensure your agent is able to explain WHY they are suggesting a particular list price rather than the agent that throws a number out without facts and expertise to back it up. If they are quoting price per square foot alone...RUN!
Pricing Is A Skill: The best time for an offer is within the first 14 days on the market - 7 days is ideal. If a home is priced right, you'll get an offer. If it's priced too high, offers will not come in and you may have few if any showings; buyers will skip your home, and eventually you have to reduce the price, giving buyers the impression something is wrong with your home.
Should You Choose an Agent-Based on Commission?
Real estate agents are not equal; each agent has a different set of qualifications and expertise. Remember about 20% of the agents do roughly 80 percent of the business. Each will develop their own marketing strategies and budget. An agent that reduces their commission by 1% may save you about $2500 off the commission but was that 1% worth the $11,200 you lost off asking price because the agent did not have a professional marketing plan or wasn't competent in their negoitation skills. Choosing an agent with a large advertising budget you might gain greater exposure to a larger pool of buyers, which drives the demand for your home up. Reaching greater numbers of buyers equals better chances of a good offer.
Why would an agent willingly work for less than competitors? There are many reasons a broker or real estate agent would discount a real estate fee. Sometimes it's the only way the agent feels it's possible to compete in a highly competitive business because the agent can't otherwise stand apart from the competition on service, knowledge or negotiation skills.
If the sole benefit an agent brings to a table is a lower fee, think about why that is. The agent could be scrambling for business or simply lack the skills to negotiate their own services? If any agent is desperate enough to discount their own money, they will be even more desperate to discount yours during negotiations because they NEED the home to close.
Sometimes full-service agents will negotiate a lower commission under special circumstances such as:
- You're are buying and selling simultaneously and allowing the one agent to represent you in both transactions.
- You are a repeat client and have used the agent in the past
- You're selling more than one home.
- You don't have enough equity to pay a full commission.
- The agent accepts you as a pro bono case.
- The agent will lose the listing unless she matches a competitor's fee.
- The agent wants the exposure (their sign) in a high traffic area
If you are interviewing agents who all have a similar marketing strategy and are having trouble choosing, ask to see a track record of each agent's original list price and final sale numbers. Most likely the lowest-fee agent will show more price reductions and longer DOM. The difference between an agent who charges 5% and 6% is 1%. Ask yourself how you come out ahead if your price ends up reduced 2% because you chose a lower-fee agent who could not afford to market your home actively.
Tip: If your home is located in a hard-to-sell community, consider using an agent with experience selling in that community.
Importance of Agent Marketing
An expensive car or fancy clothing doesn't equate to a good agent, a good listing agent lives, eats, and breathes marketing. An agent DOES NOT sell your home, THEIR MARKETING DOES. Ask to review a complete copy of the agent's marketing and listing plan. This will tell you exactly what the agent is going to do to sell your home?
Here is the ABSOLUTE minimum you should expect:
- Professional signage, including an agent's cell phone number
- Daily electronic monitoring of lockbox access
- Follow-up reports on buyer showings/feedback to the seller
- Staging advice
- Digital targeted marketing
- MLS exposure with 36+ professional photographs
- Virtual tour (Homes with Virtual Tours show up higher in searches on major sites like Zillow)
- Distribution to major websites
- Four-color flyers, if warranted
- Financing flyers for buyers
- Feedback to sellers on buyer sign calls and buyer showings
- Updated CMAs after 30 days
- E-mail feeds of new listings that compete
- Updates on neighborhood facts, trends, and recent sales
Remember, no single strategy sells homes. It's a combination of all those methods that sell homes.
Characteristics of a Good Listing Agent
You will have a relationship with your listing agent for a month or two. Choose an agent you like and trust. Below are a few things to look for in an agent.
- Experience: Let new agents learn the business on somebody else's dime.
- Honesty: Trust your intuition. Your agent should speak from the heart.
- Networking: This is a people business. Some homes sell because agents have contacted other agents.
- Negotiation skills: You want an aggressive negotiator, not somebody out to make a quick sale at your expense.
- Good communicator: Sellers say communication and availability are key.
Finally, ask for a personal guarantee. If you are not satisfied with the agents results or they do not follow through with what they promised, they should not hold you hostage to the agreement.
Have Questions? Give me a call
Alexis Hughes - 704-773-2117