Common Mistakes In Choosing A Real Estate Agent
You have come to that time in your life when you will be packing your bags and looking for your next housing gig. Part of this process will be picking a great Real Estate agent to work with. Unfortunately choosing the right Realtor is an area where many home sellers make a big mistake that leads to disappointment.
Your Realtor is the most important part of your team when it comes to selling your home. He or she will be the link between your home and the housing market, particularly buyers and their agents. Because your Realtor can mean the difference between a quick and lucrative sale and a sale that is anything but, you should be exercising utmost discretion in your choice or Realtor. Like choosing a lawyer you should be looking for the best possible candidate.
There is no shortage of options when it comes to real estate agents. Separating the wheat from the chaff can be challenging, even if it is worthwhile. Avoid the following mistakes to ensure you get the agent you need to sell your home, as choosing the wrong agent is one of the top reasons homes fail to sell.
Keep reading for the top mistakes made by sellers when choosing a Realtor!
The saying that friends and business do not mix is common for a reason, and a real estate transaction is business. You are trying to sell a property for as much as you can in as short a time as you can, and this will require skill and efficiency – things your friend or family member may or may not possess.
It is not that someone close to you will not do a good job, it is just that you need to screen him or her as you would any other applicant. Make certain this person has what it takes to sell your home.
Also, keep in mind that if things do go badly, it could damage the relationship. The tightest bonds can be strained when large amounts of money are involved, and a real estate transaction typically involves a lot of money.
Choosing a “Yes” Man/Woman
Pricing a home is one of the biggest parts of making a good sale. Unfortunately, you may or may not be looking objectively at what your home will go for in the current market. If you are aiming too high, only a particular type of agent will agree with the price you are setting. Realtors refer to this practice as buying a listing, where an unscrupulous Realtor will agree to an unrealistic price just to land the listing.
Once your home sits on the market for months, the Realtor will then recommend you lower the price to something more reasonable. You will usually wind up getting less than what you could have, and the only person that benefits is the Realtor.
If you are thinking to yourself why would a Real Estate agent knowingly take on a listing that is priced too high and not going to sell, the answer is simple? The agent doesn’t care if your home sells because they will use it to get buyer calls for other properties which they will sell. Doing so is called bait and switch, and it is a common practice with some agents who just don’t care.
Going for the Lowest Commission
This is another issue with pricing, but this time, the problem is with the agent’s commission. It is natural to want to make as much money as you can from the sale of your home. You probably have your eyes on another house and want to get something back for all of the hard work you’ve done. However, you have to spend money to make money. Paying the price for a good agent is an investment in the sale of your home and worth every penny.
There is also the fact that you usually you get what you pay for. A well-paid agent will work tirelessly to move your home, while a low-paid one will probably do little more than throw your listing up online and put a sign up in your yard. Don’t be shortsighted thinking that by getting an agent to agree to a 1/2 percent lower commission is putting money in your pocket.
In fact, the exact opposite is bound to occur as many Real Estate agents will do everything they can to convince their buyer client to purchase elsewhere. They will never mention to their customers that it is commission related. No sir – these agents will point out every weakness in your home to the buyer just to convince them there are better properties out there. All the while doing so because they don’t want to make less money by selling your home. Make sure you understand the local market and if 95 percent of the home sellers are paying X commission the last thing you want to do is undercut that.
Should a buyers agent be steering buyers away from your home because you are offering a lower fee schedule? No – in the ideal world this should not happen as the buyer’s agent shouldn’t be worrying about their pocket book. This, however, is not what always goes on in the Real Estate industry. A great agent’s only concern will be their clients best interest. The next question you should be thinking about is how many of those “great agents” are out there.
Remember time is money as well. A fantastic Real Estate agent who knows how to market the heck out of your home is well worth the money you think you are saving. An agent who sells well can quickly make up the difference in any commission savings you think you will be realizing.
Only Interviewing One Agent
Only interviewing one Realtor is a very common Real Estate mistake. It is human nature to do this especially if you like the person you have decided to meet with, and everything they have told you sounds good. You may hear the price you were hoping for and the agent has also explained how they are going to go about selling the home. It all sounds good to you.
The problem is you have nothing to compare it against. One of the things so many sellers do is assume Realtors do the same things to sell a home. This is one of the biggest fallacies in Real Estate and why so many people end up with a second or third Real Estate agent after having no success selling their home. One of the smartest things you can do is to interview at least a few agents and ask them some specific Real Estate related interview questions. Often these questions will separate the men from the boys so to speak!
Not Seeking References
You should talk to references before hiring your Realtor. While it may be initially uncomfortable to call people you do not know to ask questions about another person you do not know, it is a necessary part of the hiring process. Like any other employer, you need to know whether the person you are considering hiring is what he says he or she is. Without outside proof, you are going purely on the word of the Realtor.
Make sure the references are recent, too. The realtor may have been in his or her prime ten years ago but be letting things slip now. Get current references and contact them before making your decision. One thing to keep in mind is the Realtor is more than likely giving you the names of cherry picked clients they know are going to say nice things.
A better way to approach this is to ask the Realtor for the name and address of the last ten homes they sold. This will give you a better shot of contacting someone who is not necessarily going to speak to the agent as if they can walk on water.
Picking From an Open House
You may have met the agent at an open house in your area, or you may just be taken in by his or her stories about holding open houses and all of the traffic that is produced. Either way, you should be aware that an open house is a slight part of selling a home, and arguably unnecessary. You may be surprised to know that nationally less than 2 percent of all homes are sold via an open house.
The open house mainly serves to connect the Realtor to other prospective clients. The majority of people that come to open houses do not buy. Instead, the agent connects with other people interested in other houses and gets a chance to look busy to his or her clients.
This is not to say that open houses never work but have realistic expectations. It is far better for your agent to spend time behind the scenes doing what moves homes than to be holding an open house every week. Selecting a Realtor because you met them at an open house and found you had a good rapport is one of the worst ways to choose a Real Estate agent.
They Live in The Neighborhood
Another home seller mistake when selecting a Realtor is choosing them because they live in your neighborhood. Is it possible that the best possible agent for the job lives right in your neighborhood? Of course but there is a much greater chance they do not. Don’t think that just because an agent lives in the area they are much better equipped to sell your home than someone who does not. While the agent living in your neighborhood hopefully knows it well, that doesn’t necessarily preclude someone else from knowing it just as well.
Lots of lousy Real Estate agents live somewhere – should those homeowners who live in proximity hire them? Not! Remember selling a home is not location dependent it is about having certain business skills.
The Agent Sold X Number of Homes
You want an agent that is selling homes. However, it is more important that the agent sells a large percentage of his or her listings than the overall home sale numbers. For instance, an agent that sells 18 out of 20 listings is probably doing something better than the agent who sold 20 out of 40.
In other words, a 90 percent success ratio is a lot better than 50 percent! You want a Realtor focused just as much on the quality of their works as they are on the number of homes they are selling. In this case, an agent who sells most of the homes they list and for near the price they list them at. In Real Estate jargon, this is called the list price to sale price ratio and should be a major consideration for who you hire.
An excellent agent will sell close to the initial asking price of the home. Going back to what I mentioned earlier, you don’t want an agent that will tell you what you want to hear just to get your business. This kind of agent will be clubbing you over the head for price reductions. Someone who is worth their salt will probably be able to snap off what their prior years list to sale ratio was especially if it was top notch.
Remember that picking an excellent agent should be centered around a few critical things including do they price appropriately, market well, and communicate effectively. If you find an agent that does all three of these things, you will most likely be sitting at a closing table with a smile on your face. The number of homes an agent sells is important but expect the service to match the volume.
The average Real Estate agent sells seven or eight homes a year. Don’t hire an agent thinking that if they don’t do as much business as the heavy hitter, you will get better service. Pick an agent that does an average amount of business and you are bound to get average results!
Avoid making any one of these mistakes when selecting a real estate agent.
About the author: The above Real Estate information on top home seller mistakes when selecting a Realtor was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at [email protected] or by phone at 508-625-0191. Bill has helped people move in and out of many Metrowest towns for the last 29+ Years.
Thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!
I service Real Estate sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Northborough, Northbridge, Shrewsbury, Southboro, Sutton, Wayland, Westboro, Whitinsville, Worcester, Upton and Uxbridge MA.