- Highest List Price for Your Home
- Lowest Commission
At first glance, a seller might say, "What? Are you nuts?" Because sellers want the highest possible price and to pay the least amount of commission. But those two criterion have very little to do with hiring a competent agent and, in many instances, are completely irrelevant. Let's look at why.
The Highest Suggested List Price
Agents can't tell you how much your home will sell for. That's a fallacy. A listing agent can show you comparable sales, pending sales and active sales. But YOU choose the sales price and a buyer will tell you if the price is right.
- To get the listing, some agents distort the truth.
Since agents can't guarantee your sales price, the listing agent who suggests the highest price is probably 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 located in a different neighborhood.
- Look for a listing agent who gives you a range.
There is always a price range. It might be apart $10,000 on the low-end versus the high, or the spread might be greater. Many factors determine the range, among which are location, temperature of the market and improvements.
- Pricing is an art.
The best time for an offer is within the first 30 days on market. If the 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 10% of the agents do 90% 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.
- Why would an agent willingly work for less than competitors?
There is always a reason why 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 stand apart from the competition on service, knowledge or negotiation skills.
If the sole benefit an agent brings to a table is a cheap fee, ask yourself why. Is the agent desperate for business or unqualified? Do you want to work with a desperate agent?
- You're buying a home and selling a home at the same time, giving both transactions to one agent.
- You're willing to do all the legwork, advertising, marketing, and pay for expenses related to the sale.
- You promise to refer more business to the agent, which would result in multiple transactions.
- 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 signage (exposure to traffic) over charging a full commission.
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. 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 2% because you chose a lower-fee agent who could not afford to actively market your home.
Tip: If your home is located in a hard-to-sell neighborhood, hire an agent who lives in the neighborhood / sells homes in that neighborhood. Don't hire an out-of-area agent who can't adequately tackle the challenge without first-hand knowledge of the area.
Importance of Agent Marketing
Beyond the expensive car or fancy clothing, a good listing agent lives and dies by marketing. Because 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.
- Daily electronic monitoring of lockbox access.
- Follow-up reports on buyer showings / feedback to the seller.
- Broker previews.
- Incentives for broker / office previews.
- Staging advice.
- Weekly advertising in major newspapers.
- Advertising in local newspapers.
- MLS exposure with 8 to 12 professional photographs.
- Virtual tour.
- Distribution to major Web sites.
- Four-color flyers.
- Financing flyers for buyers.
- Minimum of 2 open houses, providing its location is a candidate.
- Direct mail to surrounding neighbors, out-of-area buyers / brokers.
- Exposure at Board of Realtor meetings.
- 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 tactic sells homes. It's a combination of all those 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 degrees 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.
At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.