Top 10 Mistakes Sellers Make When Choosing a Real Estate Agent
Selling a house most often should be like any other business transaction, but all too often sellers make emotional or impulsive decisions that cost them way to much money and time. Selecting the right real estate agent to market a property and negotiate the sale is by far the most important step in the process.
"My family member (or friend) sells real estate."
Friendship alone is merely not sufficient enough to establish a professional's credentials. Apply tough measures when choosing a realtor, just as you'd when hiring a lawyer, a physician, or an accountant to manage your taxes. A true friend will understand and appreciate that this is a business decision and will offer their credentials and expect to compete for the listing. In any case, if a problem or dispute arises while selling your house, do you want to possibly chance damaging or even destroying a good friendship or family relationship?
"Your presentation and introduction sounds great. I will list right away"
Consider more than one single presentation and weigh the advantages and disadvantages of each. Arriving at an impulsive decision while caught up "in the moment" can end up being hard to correct later on. Because you typically contract to list your home with the realtor for a specific time period, you might find yourself unable to "switch" to a different agent if you discover yourself unhappy with the service you experience.
"You are the only realtor who agrees with my selling price."
A few real estate agents tell you what you would like to hear. In the real estate community, this is recognized as "buying a listing" and is employed by shortsighted realtors who are more concerned in themselves than they are in you. However good it works as a short-term "sales tactic" in getting your listing, it's an extremely poor strategy in selling a house at the highest potential price.
You see, your home becomes the most attention from other real estate agents when it's a "new" listing. When priced properly, lots of agents will present it to their buyers. If you price it excessively high, no one will show the home and it will sit on the market for quite some time. Once you ultimately drop your price to reflect its actual value, your home is "old news" and buyers might suppose you are turning desperate. Hence, the prices you proposed will come in lower and lower - and you could get yourself accepting a price that's under what you could have received had the home been priced properly in the beginning.
Also, pricing your house excessively high will only make similar homes for sale appear that much better.
"I do not need references. I am a good judge of character."
A snap judgement Is not effective enough. You also need to determine if the realtor is competent and the best means to do that is to look into references. Ask for references on recent comparable sales -- check up on references of recent clients. Find out how an agent's clients feel about their selling experience.
Think of how long an individual has been in real estate Is not necessarily entirely what you ought to look for. Experienced real estate agents may grow tired and not work as hard - newer and less experienced real estate agents occasionally make up with enthusiasm and effort what they lack in experience.
"I am thinking about listing with the realtor who has the lowest commission."
You get what you pay for. Paying a cut-rate commission will oftentimes get you a sign in the front yard and placement in the Multiple Listing Service, but little additional effort from your realtor.
Understand that real estate agents and real estate businesses put up their own cash to market and advertise your house. Marketing and advertising costs money -- the smaller the commission, the less motivator for an realtor to put up his or her own money to market and advertise your house.
Incentive plays a very significant part in sales. A "full service" realtor pulling in a full commission will oftentimes "drop everything" to address any particular challenges that come along - a realtor earning a small commission does not have that same incentive.
Incentive is also important to the buyer's agent. Since there are almost always two agents involved in every sale, they split the commission according to the listing agent's instructions. One agent is your listing agent. The other agent is the buyer's agent. When your listing agent dropped his commission, did he also reduce the commission that will be paid to the buyers' agent? If so, you won't find as many agents willing to show your house - they'll be showing houses that offer a customary commission to the buyer's agent.
Finally, negotiating ability is an important skill in a listing agent. Are you willing to put your faith in an agent who can't even negotiate his or her own commission?
"The agent is what counts - not the company."
Agents who work for large well-established real estate companies with lots of agents do have some advantages. Large companies generally have longer office hours, so someone is always available to answer an ad call on your home. Large offices often have larger budgets and can spend more on advertising. The ad space for your particular home might not be huge, but because the total ad is so large it gets lots more attention.
Large real estate companies often have lots of agents. This is important because when your house is newly on the market, the company may stage an "office preview" where every agent in the office comes through and tours your home. Every agent who views your home and is impressed is another agent on your sales team.
Additionally, larger companies are often better at offering ongoing education to their agents. As a result, your agent may be better qualified and prepared to offer a quality service. Although most states require real estate agents to enroll in "ongoing education" to keep pace with changes in the real estate market, many agents only take the "bare minimum" in ongoing education courses. Sometimes, large offices are better at convincing their agents to go beyond the minimum.
There are exceptions to every rule, of course. Some very effective agents go off on their own and open private offices or "boutique" agencies.
"All realtors passed the same test so they must know the same things."
The real estate profession is constantly changing and, as mentioned above, the best real estate professionals stay abreast of those changes by continuing their education. Some go beyond the required minimum requirements. Many agents acquire "professional designations" that show they took additional specialized courses.
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"This realtor will hold an open house every single week."
Open houses may and do sell houses, just typically not your house. Only a minor fraction of the houses held open are sold as a direct outcome of the open house. More often, "open houses" are a method that realtors "prospect" for potential clients. If they acquire a rapport with those visitors to your open house, they can learn about their housing needs and sell them the house that most closely fits those demands. In the meantime, the individual who in time purchases your house may be visiting another persons open house.
Effective real estate agents know better than to pin all their selling campaigns on an open house. They apply their time and energy in much more effective marketing strategies. The most effective marketing isn't directly to the public, but to other real estate agents. By capturing other real estate agents interested in your house, your listing agent multiplies your sales force beyond only one person.
"I want an realtor who resides in my neighborhood."
Knowledge of the local market is not just developed by living in the immediate neighborhood. Certainly, your realtor should have familiar knowledge of recent comparable sales, models, schools, businesses, and so forth, but that's easily reached by extensive research. Convenience should not be the principal grounds for deciding on a real estate agent.
"This agent sold many houses last year than anyone else did."
That should simply be the beginning. What's more useful -- a realtor who listed thirty-two houses and sold twenty-five - or a realtor who listed a dozen houses and sold all dozen? So you need to ask a few very important and crucial questions. How many of their listings didn't sell? How many were reduced in price time and time again prior to them selling? How long were the homes on the market fr? How smoothly was the action managed? How accessible was the realtor when there were questions, problems, or concerns?
Quantity is significant, but only when all of the quality questions have been answered satisfactorily.
The best possible agent for you is the one who will do the most effective task of marketing and advertising the property, negotiating the most favorable terms and conditions, and conveying with the seller to make the process as smooth as possible.