With so many real estate agents out there, how do you find the right one? The real estate agent you hire to sell your house can mean the difference between getting a great deal or a bad one.
You should consider interviewing 3 – 5 of the best listing agents in your area and ask them questions about the market, their marketing process and their opinions about your home, including a plan that would get you the best results.
The listing agent you choose will become a big factor that will dictate not just whether you sell or not, but also the selling price, the time that it takes to sell, and how stressful the process becomes for you.
Your goal should be to hire a listing agent that:
- Can get the most viewings and/or offers either because of their marketing approach to get buyers interested or because of their access to a pool of willing buyers.
- The agent should have deep knowledge and experience in selling the type of property you want to sell.
- The agent should have good integrity, and be a skilled negotiator.
How Good is Your Listing Agent
Hire the Best listing agent you can find in your area. The best listing agent is not the agent on the biggest billboard, but the agent who can sell your property for the most money in the least time.
Role of a good listing agent
The role of a good listing agent is to attract the highest number of suitable buyers to view your property, so that you can sell the property for the most money, in the shortest time. To do this good listing agents prepare a comprehensive marketing plan that includes:
- Their advice about the market value and suggested list price for the property
- Recommendations for home improvements and home staging ideas that will help improve the marketability of the home, and thus achieve the highest sale value.
- Photos, or hiring a videographer to highlight the home’s key features, and to use for marketing the property to prospective buyers online.
- Details about how the home will be marketed to prospective buyers
Have you ever gone to a store to buy one thing but ended up buying something completely different? The same happens in real estate. Good real estate agents can “sell the viewing” which means encouraging suitable buyers to like the property by highlighting the best things the home has to offer, including the lifestyle that comes with living in that neighborhood.
Good listing agents use leverage to your advantage
In 2013 I wanted to move to a neighborhood that was closer to my in-laws so we put our house for sale. To our surprise, on offer night we only received one serious offer (slightly higher than the list price), and there was a second person who called in stating he was interested but they had in mind a significantly lower than the list price.
My agent said “send the offer in, you never know – maybe the sellers will be ok with it” What she really wanted is to have a second offer so that she could go to the buyer with the first offer and say “look we have another buyer that also wants to buy the property if you want the house you’re going to have to up your price”.
Long story short, that second offer resulted in the buyer with the first offer increasing their price by $10,000 and that was 100% because the real estate agent created leverage so we could maximize the sale value potential.
How to find listing agents to interview
One effective way to narrow down your options is to ask your friends and family for referrals of an agent they like. However, beware that your friends and family may recommend to you an agent that does not know the area or the type of home you are selling.
Hiring a real estate agent that is not an expert with your neighborhood or the type of home you are selling is like hiring a family law lawyer to represent you on a corporate case.
Another perhaps more effective option is to research online. With just a few google searches, you can now find a lot of information online that can help you separate the average agent from a great one.
- Look for articles or white papers the agent may have written to get a sense of their level of expertise.
- Read the reviews written by previous clients on the agent’s website, google reviews, and or yelp.
Once you have identified the 3 – 5 of the top, most successful agents in the area, contact them and book an in-person interview with each of them. The goal of the in-person meeting will be to ask questions that can give you an indication of their expertise and whether the agent can sell the property for the most money in the least time.
Questions to ask when interviewing each listing agent
The best real estate agents won’t mind the questions; they understand the game and have a natural tendency to help their clients vs. simply closing the deal.
Before you sign a representation agreement, make sure you are comfortable working with the agent and be sure to understand what they will do to sell your property for the most money in the least type.
Learn about their experience in the neighborhood, their skills, strategy and how they negotiate single or multiple offers.
Here are 15 questions savvy sellers ask when interviewing the potential listing agent:
- What price do you anticipate I will get for the property.
- What price do you suggest we should list at and why?
- What are you basing your pricing advice on?
- How does my property compare to other available properties
- Is now the right time to sell my house and why?
- How many homes have you sold in this neighborhood in the last 12 months?
- How will you attract the right buyer to buy the house
- How will you generate more interest from buyers.
- How quickly can you sell my house
- What techniques will you use to get better offers?
- What other value added services do you offer?
- Will you be handling the sale or will you pass the listing to a different agent?
- What is the current buyer demand on the market for a property like mine
- What do you recommend we do to maximize the home’s appeal?
- What’s your commission?
I’ll let you in on a little secret. Come closer – Most listing agents are afraid of telling you the truth in fear you won’t like what you hear and dislike them.
In the early days when I got started in real estate, I asked an experienced agent I knew this question. “What does a real estate agent need to do to be successful in the business”? The agent responded, “You need to be a good psychologist”. That did not make sense to me so I asked what he meant by “good psychologist”. He then responded, “You have to predict your client’s intentions/expectations and manage them”.
Guess what? He was wrong! Those are the type of agents that even though some can achieve a level of success, they do it at the expense of the client. The really good listing agents are not afraid of telling you the truth.
You need to be aware of this and learn to process the advice real estate agents give you to improve your chances of getting the best possible result.
Great listing agents are expert negotiators
While you as the seller want the highest sale price, buyers want the lowest price; this means you have to meet somewhere, but the problem is that the stakes are high and a small misstep can cost you tens of thousands. This is why you have to make sure you have a good negotiator agent in your corner.
Yes, one of the main things a good listing agent does is to use their negotiation skills to get you the best sale price; you could argue that anyone could negotiate the highest price, but the stakes are too high. A home sale negotiation is no walk-on-the-park – the numbers are big such as $500,000 or even more; a 2% change means $10,000.
Nowadays you can check the agent’s track record; if they seem to have an average sale amount to listing price ratio of 98% that means those sellers took a 2% haircut on the value they thought they would get but lost.
The best listing agents are the ones who have local market knowledge not just in your town, but in your neighborhood.
When people hear about market knowledge, most think it relates to recent news or market-driven prices. You will notice that I highlighted the word local; why? Because knowing the general market does not help. Knowing your neighborhood market, on the other hand, gives the best listing agents the upper hand when negotiating with potential buyers.
Local market knowledge = Knowing who are the suitable buyers (their goals, their desired lifestyle, their budgets, their needs & wants, the amount they would offer).
Good listing agents have insider information about the type of buyers who are currently in the market looking to buy homes, and they can advise you on the best time to put your property on the market. Yes, no one has a crystal ball to predict the future, but a good listing agent keeps him/herself up-to-date on local trends.
If a home down the street with similar square footage sold for $20,000 less than the listing price of your home, the listing agent should know the exact reasons that support the different in price.
Knowledge of home repairs
Great listing agents know what the key features of the home are, as well as where the home lacks value. They then highlight the key features and prepare explanations that can positively respond to an inquiry of where the home lacks value.
A good listing agent should be able to easily identify the home repairs that add value to the property and separate from the type of repairs that don’t.
Overpricing the home (deliberate overpricing)
So, you interview a few real estate listing agents and found the agent you want to sign with. The agent said the market value of the home is $650,000 – $680,000; what value would you want to the list price to be?
As with many things in life, the answer is it depends, but you sure want to get that top price. Or what if you list it at $690,000 so that you can agree on a $680,000 price (your real goal)? If that’s what you want to do, many agents would agree to this deliberate overpricing; in fact, some might even encourage it with the hope that you hire them vs. the other agents you interviewed.
The truth is that the market is subjective; it reacts to signals, so when a home is overpriced, buyers tend to avoid it. Other buyers will then think something is wrong with the property; the market will then sit on the market unsold until you realize that the price must be dropped, but chances are the real estate agent would have known that from the start.
When it comes to overpricing a home:
- There is a real cost to “testing the market”
- Other lower-priced properties will seem more attractive
- Overpricing leads to underselling
As a seller, your best line of defense against deliberate overpricing is to ask multiple listing agents for their reasons backing up their recommended listing price. This would give you the knowledge of a listing price that makes sense vs. simply going with a hopeful wish.
Check the agent’s stats
Check out the agent’s following stats to verify their success rate:
Number of Sales over the last 12 months
Ask how many homes he or she sold in your area in the last 12 months. An agent that specializes in condos or who focuses on a different type of property to the one you are selling might not be the best fit to sell your property.
List Price to Sale Price Ratio
The list price to sales price ratio is an important measure to look at. This can give some sense of the agent’s ability to accurately price homes, as well as to evaluate how good their negotiation skills are.
Days of the Market
The lower the number, the better, and it gives you an insight into how quickly an agent can sell their listings. The days on the market number also can give you an indication of how well the agent can market homes.
The issue is those ratios need to be based on fairly recent numbers because small changes in the market can significantly impact the ratios.
The bottom line
Picking the right real estate agent can make or break a deal. It is one of the most important decisions you will need to do during your home sale and it will determine the stress level you will experience.
When not sure, rely on your instincts. Ask yourself, “Do I see working with this real estate agent? Do we get along well, or is there a negative vibe?”
You will be spending a lot of time with the real estate agent you hire, so being able to work well together and being able to trust their advice will determine whether or not you succeed in selling your property for the top value or leave money on the table.
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This is an interactive course designed in an easy to understand format; you will learn the eight steps you will need to take to achieve successful homeownership.