Avoiding Mistakes When Choosing Your Listing Agent
What are the two biggest mistakes home sellers make when choosing a listing agent? Selecting an agent solely based on:
- Highest List Price for Your Home
- Lowest Commission
Of course sellers want the highest possible price for their homes and they want to pay the least amount of commission. But those two criteria should have very little impact on your decision to hire a competent agent and, in many cases, are completely irrelevant. Let's take a look at why.
The Highest Suggested List Price
Agents can't tell you how much your home will sell for. All they can show you are comparable sales, pending sales and active sales. Ultimately YOU choose the listing price and the buyer will tell you if the price is right.
- To get the listing, some agents bend the truth.
Since agents can't guarantee your sales price, the listing agent who suggests the highest price is either uneducated or worse, untruthful. Ask the agent to show you numbers supporting that suggested list price. They probably won't have them or the home sales will be not be similar to yours.
- Look for a listing agent who gives you a range.
There is always a price range. There might be a difference of $10,000 between the high and low-end, or greater. Many factors determine the range, among which are location, the state of the market and improvements.
The best time for an offer is within the first 30 days on market. If your home is priced right, you'll get an offer. If it's priced too high, you might not get any showings at all; buyers will shun your home and you'll eventually end up reducing the price, leaving buyers wondering what's wrong with your house.
Should You Choose an Agent Based on Commission?
Real estate agents are not equal; each is unique. Remember about 20% of the agents do 80% of the business. Each has their own marketing techniques and advertising budget. By choosing an agent with a large advertising budget and company dollars to match it, you will gain greater exposure to the largest number of buyers, which is ideal. Reaching greater numbers of buyers equals better chances of a good offer.
If you are interviewing agents who offer similar services and can't decide between them, ask to see a track record of each agent's original list price and final sale numbers. Odds are the lowest-fee agent will show more price reductions and longer DOM(Days on the Market). The difference between an agent who charges 5% and 6% is 1%. Ask yourself how you come out ahead if your price ends up being reduced 5% because you chose a lower-fee agent who could not afford to actively market your home.
Importance of Agent Marketing
Marketing sells homes. Ask to review a complete copy of the agent's marketing plan. Precisely what is the agent going to do to sell your home? Here is the bare-bones minimum you should expect:
- Professional signage, including agent's cell phone number.
- Lockbox.
- Daily electronic monitoring of lockbox access.
- Domain name and personal website for your home.
- Follow-up reports on buyer showings / feedback to the seller.
- Broker previews.
- Staging advice.
- Advertising in local newspapers.
- MLS exposure with 21 professional photographs.
- Virtual tour.
- Full colour flyers.
- Financing flyers for buyers.
- Updated CMAs after 30 days.
- E-mail feeds of new listings that compete.
- Updates on neighborhood facts, trends and recent sales.
Remember, no single tactic sells homes. It's a combination of all of these methods that sell homes.
Characteristics of a Good Listing Agent
Here are some of the characteristics sellers say they want in agent:
- Experience. Let new agents learn the business on somebody else's dime.
- Education. Ask about courses and certifications.
- 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 the agent won't guarantee performance and release you from a listing upon request, don't hire that agent.