1. What asking price do you recommend?
Some agents will "buy" a listing by suggesting an inflated asking price. We all want to hear great news, and often a seller will select the listing agent with the highest recommended sales price.
Bad decision. An overpriced house will not only sit, it will create price decline expectations as the asking price lowers.
2. What comparables did you use in pricing my house?
There is no better way to value a house than to compare it to other recent sales. Do not be swayed by the "it only takes one buyer" crap. You could also win the lottery, but 99 percent of sales are within the price range of comparable transactions.
3. How long is the listing contract?
The shorter the better, of course. But agents have a legitimate reason to ask for 6 months since good marketing can take time. Anything longer than six months is, in my view, a mistake. Too many agents over-promise and underperform. Keep the listing contract on the shortest leash possible.
4. What happens if I am not happy with your service?
Even with a six-month listing contract, I strongly recommend you try to craft an "escape clause" into the deal. It can be pro-agent, but try to insert something.
For example, "In the event Agent does not perform minimum services, Owner can cancel the herein Contract with 30-days notice."
No one knows what "minimum services" means but just in case your agent is horrible, it would be nice to have a shot at bluffing your way out of the contract (i.e. threaten litigation).
5. What happens if you do not sell the house within the term of the listing contract and I want to list with a different agent?
Most listing contracts have a "tail" - a clause that entitles the agent to a commission so long as the eventual buyer viewed your house during the term of the listing contract. You want this tail voided if you list with a new company. Otherwise, the new company may be reluctant to commit a full marketing campaign to your house.
6. Specifically, what are your marketing plans?
The more your house is marketed, the more likely a buyer will bite. Marketing works. You want to know precisely what the agent intends to do and with what frequency.
7. What is the procedure for showing my house?
Most agents will want a lockbox on your house, as this allows your house to be easily shown by every agent within the multiple listing community. This can also facilitate showings. In certain situations, though, there may be reasons not to do this (e.g. expensive personal items in the house).
Also ask about signage. Some people prefer not to display a "For Sale" sign for security or privacy reasons.
8. What is the commission?
Don't let an agent tell you there is a "standard" commission. This is against the law as all commissions are subject to negotiation. The total commission (including the percentage going to the buyer's agent) is usually in the 4-to-6 percent range, depending where you live. Speak with several agents in your area to get a sense of the range.
9. When do you (the listing agent) earn a commission?
Many listing contracts provide that the agent earns a commission when he produces "a ready, willing and able buyer."
NO, NO, NO.
You should be obligated to pay commission if and only if the house sells. Most agents will back off the "ready, willing, able" language.
10. What split are you offering the buyer's agent?
Some listing agents will shoot for a larger cut of the commission than 50-50. In other words, on a 5-percent commission, he may offer the buyer's agent 2 percent instead of 2.5 percent.
This is a crummy thing to do because it disincentives the buyer's agents to show your house to prospects. You should target 50-50.
Jim Randel is the founder of the award-winning Skinny On™ series of books and content. </Shameless Plug> ;)
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