Selling a home has become easier over the years with online services to help the seller set a price and advertise, but most homeowners still hire a real estate agent.
While many agents have deep experience and know their markets intimately, newcomers abound — people looking to cash in when the market is hot and may not even work at the job full time. So experts advise homeowners to look carefully for an agent with the right combination of experience, knowledge, work ethic and personality.
What is a Realtor? Typically an agent is someone licensed by the state to sell real estate, while a broker is a manager of a team of agents. A Realtor is a member of the National Association of Realtors, the industry’s main trade group, which requires members abide by certain ethical standards. Experts suggest sellers use agents who have received more than minimum training required in their state.
[See: The 10 Best Ways to Buy Real Estate.]
“In California, the requirements for a real estate salesperson’s license are very low, basically, three classes and a test,” says Bryan Zuetel, a real estate attorney and broker in Orange County, California.
“Almost any agent can get a listing, enter the property into the (multiple listing service), create some flyers, hold open houses and fill in blanks on the contract forms,” Zuetel says. “However, most agents do not understand, but should understand, the complex contract terms, implications of an unhappy party in the transaction, legal requirements for the numerous disclosures, appropriate negotiations during the escrow period, conflict resolution via mediation or arbitration, and the remedies under the contract.”
Do your homework. Law professor David Reiss, academic program director at The Center for Urban Business Entrepreneurship at Brooklyn Law School, says it’s important to check out a prospective agent with previous sellers.
“Some real estate agents are great at pitching themselves but not great at marketing homes once they have the listing,” Reiss says. “Getting recommendations from friends and relatives will give you information that the agent herself or himself would not provide. Do they return phone calls promptly? Are they creative problem solvers? Do they educate themselves about the pros and cons of the home and (comparable properties in the area)?”
Experts also recommend seeking referrals from professionals in related fields — real estate attorneys, accountants, bankers and so forth — since friends, family and neighbors may focus on the agent’s personality and accessibility rather than professional skills.
“You want to know the ‘why’ behind the referral,” says Kyle Alfriend of the Alfriend Real Estate Group, Re/Max in Dublin, Ohio. “Did they effectively navigate through a difficult negotiation issue? Did they accurately predict the market? Did they set and exceed expectations on showings, offers, and final sales price and timing? These are good referrals. Ignore the ‘nice person’, ‘good friend’, ‘goes to our church’ referrals.”
Numbers can tell the story. John Paul Engel, a lecturer of entrepreneurship at the University of Iowa in Sioux City, and veteran agent in the luxury market in Manhattan, says sellers should look for some key data on the agent’s track record.
The most important factor in choosing an agent is knowing how many properties the agent sold among the 250 to 500 closest properties to your home, he says. “Next, did the price per square foot exceed the average for the area? Did they have a recent listing similar to your home? If they did, they may already have a stack of buyers.”
Look at the agent’s recent sales, he suggests. If homes sold very quickly it may mean the agent recommended prices that were too low, if it took too long the agent might not have worked hard enough.
He also suggests going to open houses to see how prospective agents handle themselves. And, before making a deal, get the agent to run you through his sales pitch for your property, Engle says.
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Ask lots of questions. Experts say it’s fair to ask prospective agents how many properties they have listed, and how many customers — buyers as well as sellers — they are working with. You want an agent good enough to be in demand but with enough time to work on your sale. Also, is the agent experienced with properties like yours in style and price? Is the agent knowledgeable about pros and cons of current mortgage products, so he or she can help buyers through the various aspects of making a purchase, such as pre-qualifying for a loan?
Alfriend urges asking: “What homes in this area, similar to this home, have you sold? Of those homes, what were the days on market, what was the asking price to sales price ratio? How many offers did you receive? And can I speak with those sellers? What is your expectation on the response we will receive the first week, following weeks, and what will you do if those expectations are missed?”
Experts say sellers should remember that in most markets more than 80 percent of home sales involve an agent for the buyer as well as the seller. Therefore, it’s essential that your agent be adept at communicating your home’s merits to the other agent, will be available to arrange showings by others and won’t discourage other agents in order to avoid splitting the commission.
Don’t discriminate. Remember that anti-discrimination laws bar agents from discussing matters like the neighborhood’s ethnic makeup, and can even discourage talk of the number of children or old people in the area. But there are ways to get important, non-discriminatory information across if the agent will cooperate, and an experienced agent may be more adept at this than a beginner.
“A homeowner can write why they like the neighborhood, and can have that information sitting out for buyers,” Alfriend says. “Obviously you would never write anything that attempted to exclude certain groups, but saying your children love the neighborhood because of all the kids is certainly acceptable. I have every seller write a letter, ‘Why We Love Living Here,’ and we have it on display in the home. ”
Financial considerations. Sellers are also wise to consider the agent’s financial incentives. Since agents work on commission, they earn money only when a sale is finalized. The need to wrap up one listing to leave time for others could cause your agent to recommend a lower price, or heavy spending on improvements that don’t add as much value as they cost.
Good agents won’t do that, of course, and will embrace industry ethical standards to work in the client’s best interest, but the seller is nonetheless wise to proceed with caution. If you’re willing to settle for a much lower price, telling the agent could result in a low offer prematurely, through hints transmitted to the buyer or buyer’s agent. Insisting on a price so high its unlikely to draw offers could discourage your agent from working hard on your property.
[See: A 14-Point Checklist for Land Investing.]
So the goal is to find an agent who will work effectively as a teammate, keeping your interests first and foremost. Agents in it for the long term know that’s how to build a solid reputation.
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6 Tips for Choosing a Real Estate Agent originally appeared on usnews.com
