Wednesday, November 14, 2007

How to Choose Your Agent

We are all aware that the real estate market has turned upside down, and it is what is called a “buyer’s market”. It is a great time to buy. But, what do you do if you want or need to sell in today’s market? How do you choose the best real estate professional to market your home? What can you expect for the money you are paying your listing agent? And, what do you do if you are not getting the service you should be getting from your agent?

The days of having your buddy who just got his or her license come over, list your home and collect his check are over. The inexperienced agent often has no idea how to actually market and present a home to get it sold. If you are planning on hiring your friend who is new to the business, check out the support system he or she has behind him. A lot of agents who started in the business during the times of instant sales and multiple offers do not have any systems set up to actually market your home. Some do not even have access to the most basic of marketing tools, MLS. In sales, the enthusiasm of the new agent can bring a lot of interest to a property, but there must also be a system in place to expose the property to as many potential buyers as possible. Does your friend have a system in place and support from a broker who is involved? Does he have the financial ability to pay for advertising for up to eight to ten months? Does he have the ability to negotiate in your behalf? Don’t be afraid to ask your licensed “friend” the hard questions you will be asking the rest of the agents you may interview (even if he is the only one you actually interview!). Your listing agent gets a large percentage of the money from the sale. Even a “friend” should earn it.

The agent who is the “neighborhood expert’ may or may not be. The postcards you get in the mail from the same agent over and over again at least show some systems are in place to contact people. But, any one can say they know your area. Are you getting post cards from an agent who tells you HE or SHE has sold a home? Include these agents in your list of possible agents to interview. Do not assume that the mass of mailings puts these agents above others available. However, if there is one agent who works your neighborhood faithfully and has sold homes in your area, he or she may have potential buyers waiting for a new home to come on the market. He should definitely be included in the interview process, and strongly considered for hiring.

So, how do you choose? First of all, make a list of all the agents you may want to consider for an interview. Start with the agent who was your selling agent when you bought the home. He knows the house, and knows you. If you were satisfied with his skills as a selling agent, he probably can transfer the skills to become your listing agent. Do not assume this though. He or she will be interviewed just like the others. Include that “neighborhood” expert, and your friend if you would like. Ask your co-workers or your neighbors who they would recommend. Some companies offer better services to their agents than others. Find the best and interview the best agent named by friends and neighbors from that company. Do not ask how much they charge, nor interview based on the commission charged. You want the best fit for you, not necessarily the cheapest commission. Keep the list to around four or five agents. Try to schedule the interviews over a two day period. Leave about 3 hours between interview times. This will allow you to write your notes between visits.

Okay, so how do you interview these agents? First of all, be aware that selling a house is a team effort between the seller and the agent. The sellers’ responsibility is to make the house available for showings and to have it clean and in its best presentation condition for those showings. The agent and broker’s job is to market the house, pay for all advertising, and present all offers. It is your house and it is your decision to sell or not to sell. But, the agent and the brokerage do have an interest in getting the job done for you. They will be investing their money into the marketing of the house.

The interview process may begin before you meet with the agent. Most will ask the basic questions about the house over the phone so they can prepare a “CMA” (comparative market analysis). This will tell them, and you, about what the house should be listed at, price wise. Some agents may even bring over a “pre-listing” packet with information about them and their companies.

Write out the questions you want to ask the agents, but more important than the questions asked is some of the attributes you may want to be looking for. Do you “trust” this agent? Is he or she telling you the truth, or what you want to hear? Is the agent “enthusiastic” about the prospect of selling your house? Can he “communicate” with you in a manner you can understand? Does he seem truly “interested” in what you have to say? Is he or she ‘strong” enough to discuss the pricing of your home? Does he or she seem “knowledgeable” about the current market? Do you think this person has your best interests in mind?

Following are some of the questions you may want to ask:
1. How long have you sold real estate?
2. How many companies have you worked for?
3. What do you think we can sell this house for?
4. How long do you think it will take?
5. What is your marketing plan for your listings?
6. How are you doing in this “down” market?
7. What is my bottom line?
8. What if it does not sell?
9. How long for the listing?
10. What if I decide not to sell, or am not happy with what is happening?
11. Will you negotiate your commission now?
12. Will you negotiate your commission if I will not list without it?
13. Will you negotiate your commission if we have to have it negotiated to get the deal done?
14. Who handles your business when you are out of town?
15. How will I be notified prior to showings?
16. What do you think will happen over all in the real estate market?
17. When would we reduce the price?
18. Will you have an “open house”?
19. Do you see anything that needs to be done before we put the house on the market?
20. Is there some thing I can do which will make this sell faster?
21. Did the agent ask for the listing?

You can add more or take away some of these questions. You may be surprised at some of the top agents’ answers. A good agent is not going to list the property in today’s market if you are wanting more than the market is showing the house is worth. He knows that both you and he will be wasting time and money. If the agent is not strong enough to answer this concern, chances are he or she will not be strong enough to negotiate with the agent who represents the buyer. The same can be said about the agent’s commission. If the agent is anxious to reduce his commission now, what will happen if you need a thousand or two to get the deal done? Also, he may be negotiating away one of the things you need to offer to the selling agent to get the property actually shown. Most experienced agents know that “open houses” do not sell the house very often. Most of the time, they are held as a means to signal to the seller that something is being done.

Surprisingly, you do not necessarily want to list with the agent who acts as if “you are the boss” and takes the listing at whatever terms you demand. They should be listening to you and advising you. And, they should not be afraid to ask for the listing. Not many will, but some will. You do not have to list at that time, but he who asks will be more likely to be able to ask for the contract from a buyer.

The stable agent who has years of experience and has been with only a few companies knows the market and knows how to handle almost any problem which may come up. The newer agent may be more enthusiastic. Avoid the “company hopper”. This may be a sign that the agent can not get along with other agents or with the broker (ethics?).
Many of today’s sellers are listing with the “highest bidder”. It is a big mistake since the time the property is new on the market is the most likely time to find a buyer. Reducing the price is not near as effective as putting it out initially at a saleable price. Pricing high and reducing the price to bring in the buyer does not seem to be working in this transition time. The properties which are selling are coming out listed at lower than the comparables. And, they are selling closer to the list price than those on the market for longer periods. Even the most experienced agent does not know what will happen with today’s market. You do want one who seems to be able to stay on top of the trends in your market.
The marketing plan is not as important as the fact that there is one. You are going to want to compare each agent’s plans and use this to help determine who you want to hire. Get someone you can call anytime. And someone you can “fire” if you are not happy. As listing agreements are terms of employment, if the broker is not marketing to your satisfaction, the agreement can be terminated. Good Luck…and stay calm.