Avoid These 7 Mistakes When Choosing
A Real Estate Agent To Sell Your Home
When it’s time to sell your property, how do you go about choosing an agent? After all, you see real estate agent signages all over; in every neighborhood, and pretty much on every street corner!
How will you know if he’ll do a successful job of selling your property for the highest price, in the shortest period of time, and the least amount of inconvenience to you? Most of us aren’t exposed to real estate agents very often, other than a few times in our lifetime. Therefore, choosing a real estate agent might not be the most straightforward decision to make, wouldn’t you agree?
A vital part of the marketing process of your home is actually the selection of the right real estate agent! In other words, choosing the wrong real estate agent will undoubtedly lead to headaches ahead! When choosing a real estate agent, there are several major home seller mistakes to avoid:
Mistake 1: Choosing a Real Estate Estate Agent Who Offers The Lowest Commission
Now that you’ve decided to sell your home, your next step will be to interview a number of real estate agents. There are many agents out there who will undercut the competition by seriously lowering their commission, in an attempt to win the listing mandate!
“As a home seller, I’m saving money so why is that a bad thing?”
Well, there are a few ways of looking at it:
- Reduced commission means reduced marketing resources in getting your home sold. The potential marketing tools that agent suggested he’ll be using, will be substantially less than what a full commission agent could offer as part of his marketing strategy of your property.
- Now, say this listing agent decides to go the route of heavily discounting the commission rate so he can get your property listed, how many buyer agents are likely going to be turned off once they find out how small their cut of the commission will be? Hence, it would financially benefit the buyer agent to take his client elsewhere and be paid a standard market going commission for the transaction.
- And, finally, aren’t you curious why the agent needs to lower his commission by that much? When he drops his commission at a drop of a hat (thereby hurting his bottom line), how good will he be when it’s negotiation time on the price of your property?
Does making this decision still make you warm and fuzzy at the thought of saving money? This is a classic case of you get what you pay for. Before signing up with the real estate agent who’s offering the lowest commission, please read the previous statement again.
Mistake 2: Choosing a Real Estate Agent Who Suggests The Highest Listing Price
So you’ve decided to go on the market with your (overpriced) property, odds are quite high that you will eventually sell your home at a price below the going market price. The first 3-4 weeks of marketing are crucial and if the asking price is too high, unfortunately, potential home buyers will simply not even consider your listing. Never mind taking the time to go view it! And, to be honest, why would they? The property is out of their price range anyway! Regardless how you look at it, the end result will be that the overpriced property will sit on the market for a much longer time. And it will eventually sell at a much lower price than would have been achieved if only it was priced correctly from the start!
Now, let’s assume there’s a buyer who decides to put in an offer.. Another unfortunate risk you’ll run with selling an overpriced property is that the banks will have trouble finding value during their appraisal; thereby limiting the finance amount for the buyer. So, unless there is a bigger deposit to make up the difference, the deal is likely to fall through. All this effort, time, stress and living in hope, just to see it all go to waste!
Mistake 3: Choosing a Real Estate Agent Just Because He Sold The Most Properties
Some may be tempted to use the total number of properties sold as the sole measuring stick in choosing a real estate agent. While the agent who only manages to sell a couple of properties last year, might not be your direct choice, the agent selling 50 properties in a given year should not immediately be the first choice either. “Why?” you ask.
Per Mistake 2 above, we now realize that the real estate agent who gives the highest listing price is probably going to get a lot of the listings. Yet, it will become very evident that those overpriced properties aren’t selling and will likely remain on the agent’s books for longer periods of time. Meaning, the number of properties that agent eventually sells versus renting the properties that he still has on the books will be quite low.
Who do you think to be the better agent: the real estate agent who sells 13 out of 15 listings or the agent who sells 20 out of 50 listings?! Rather have a look at how well the agent priced the property, how he suggested going about the marketing strategy, how his overall presentation and communication report was.
Mistake 4: Choosing a Real Estate Agent Because It’s Family Or A Friend
Selling your house is very serious business. Most real estate agents will agree that there’s no one sales contract the same! Every client has his/her specific requirements, needs, wants & wishes and all of this needs to be properly documented by both buyer and seller agents. Therefore, it is very important that not only during negotiation but also at the time of closing, that legally, everything is handled correctly.
Will you or your relative/friend be able to look past whatever may have gone wrong during the transaction process if the experience wasn’t the greatest? Whoever will eventually be marketing your home should be going through a fair interview process together with other interested agents, all vying for the job! Let the best (wo)man win!
Mistake 5: Choosing To Interview Only One Real Estate Agent
It’s always been highly recommended to interview agents from different agencies, as each agent will have their own tools and skills to bring to the table when proposing their marketing plan of your property. If you only interview one agent, you would be not exposed to any of that.
Mistake 6: Choosing a Real Estate Agent Without Checking References
It’s amazing to see how little research some home sellers do prior to choosing a real estate agent. A lot of times, it seems people spend way more time reading up on the latest reviews before buying that new Smart TV than actually researching the real estate agent’s history. And yet, the financial impact is easily 100 times bigger and will impact you for the next 20 years!
When choosing a real estate agent, besides looking at his listings, have you Googled his details, and tried finding him on Facebook, LinkedIn, or Twitter? And did the social activity on those platforms coincide with the professionalism and service you expected?
Every real estate agent should also be willing to provide you, as the home seller, a list of references. You will very quickly find out how these clients rate the real estate agent’s professionalism and services throughout the property selling process.
Mistake 7: Choosing a Real Estate Agent Who Only Works Part-Time
Why do you think there’s such a high turnover of real estate agents? Any 3rd party might look at their local real estate agent and believe he’s got a cushy life, driving around town all day with these buyers, doing a couple of seller presentations and signing the big sales contracts. Selling real estate really can’t be that difficult, now can it? Well, the question needs to be asked whether the real estate agent is doing this part-time or is full-time involved in the real estate business.
Let’s be serious: how could a part-time real estate agent possibly be flexible enough doing all these buyer viewings? And if he’s doing it part-time, how long will it take before clients get a response back to their inquiries? Or worse, how quickly will the agent be able to show those clients the property? What will be the timing of the marketing of the property? After hours? Weekends? Finally, where do you as the home seller fit into this schedule?
Overall, the work that is involved in managing the listing, marketing it, giving it the much-needed exposure, writing offers, and finally, selling it & bringing it to a successful close, demands the attention of a full-time real estate agent!
Perhaps you didn’t realize how many mistakes a home seller can make when choosing a real estate agent, and how easily it can sometimes be to make them!
If there’s one thing you should take away from this article, it definitely should be to avoid the biggest home seller mistake of overpricing your property.
Please apply the above information to avoid home seller mistakes when choosing your real estate agent!