Most of you will need a real estate agent when it’s time to sell your home.
There is definitely no problem in finding a real estate agent near you as their signs are everywhere. However, identifying which real estate agent is the right one is not quite easy. You have to ask yourself: Will this person be successful in selling my property for the best possible price, in the fastest time possible, and the least amount of hassle for you?
For most of us, dealing with real estate matters is not a normal occurrence. Hence, deciding which real estate agent to choose is not quite a straightforward process.
If you choose the wrong real estate agent, you are in for some financial and emotional woes. So, when choosing a real estate agent, remember to avoid making these mistakes:
1. Hiring an agent with the lowest commission rate
Many agents will try to win over their competition by offering the lowest possible commission. You’re probably thinking “I am saving. Why is that a bad thing?” Well, here are some other ways of looking at it.
Bargain commissions means the agent is skimping in other areas. They simply are not offering a full service.
If the listing agents decides to heavily discount the commission rate, buyer agents are likely to be turned off by how small a commission they would be getting. Therefore, it would be in the buyer agent’s best interest to take his client elsewhere and get the standard commission rate.
You have to question how come the agent is willing to cut his commission to get your business? If he can easily give up a huge portion of his commission thereby hurting him financially, you have to doubt his ability to negotiate a good price on your behalf!
Before choosing a real estate agent who is offering lowest commission, read the reasons above again. Try to compare his listing presentation with what other agents are offering to market your property.
2. Hiring an agent who gives you the highest listing price
When you have decided to put your property up for sale (and it’s carrying a hefty price tag), chances are that in the end you will sell at a price below the market average.
It is again important to reiterate to begin your marketing process with the right asking price. The first three weeks of marketing are critical and if your home has a high asking price, prospective buyers could simply skip over the property. Why? Because it’s a waste of their time to look at a property that is out of their price range.
Even worse, many real estate agents might use your overpriced home to steer their educated home buyers towards correctly priced properties.
What will happen is that your property will sit on the market for a long time and you will eventually be forced to sell at a much lower price than you would have received had you put the correct price on your home from the start.
3. Picking the real estate agent with the highest number of properties sold
You might be tempted to use the total of homes sold by an agent as the No.1 criteria when choosing a real estate agent.
While the agent who was only able to sell two properties in a month may not be your immediate pick, the agent selling three times as many properties in a given year should not be your first pick either.
Why? Because of this thing called “sales-to-listing ratio.”
Picture this: the real estate agent who gives the highest listing price is likely to secure more listings. However, those overpriced properties will probably remain unsold for quite some time adding to the ‘days on market’. This means the number of homes that agent finally sells compared with the properties that remain on his books will be quite low.
Who is the better agent now? The one who sells 10 out of 12 listings (80%) or the one who sells 30 out of 60 listings (50%)? Remembering too that the length of time that your home is on the market for will also likely reduce the sale price as well…!!!
Instead of looking at agents who sold the most number of properties, look at how well the agent priced the home, what were the number of days on market, what the contents are of his marketing presentation, what his reactions were when you tried to cut his commission (to test his bargaining skills), how his general presentation and communication report went and if the final sale price was within or above the original appraisal price.
You will find these skills very helpful when it comes to negotiation time.
4. Interviewing only one real estate agent
It is recommended that you interview real estate agents from various agencies, as each agency offers unique strengths in marketing and servicing. The individual agents will have their own tools and talents to offer when presenting their marketing strategy for your property. If you interview only one agent, you will miss the chance of finding out what others have to offer.
Just like in other business, the 80/20 rule is also applicable in real estate. (Truth be told, the numbers is close to 90/10 in certain real estate markets.)
This means the rest of the 80-90% of agents will do what is necessary to secure those quite a few remaining listings, even going to the lengths of inflating “a little bit” the listing price. This is not uncommon in real estate.
So, if you’re only interviewing one listing agent, you should remember that there is an 80-90% chance that you will get one of the latter ones.
Do you want to hire an agent who will tell you whatever you want to hear in order to get your business?
5. Not checking references
Many people will spend more time reading the latest reviews on the internet before making a purchase than researching the background of a real estate agent before hiring him. This, despite the fact, that the financial impact is 100 times bigger and will affect you for the next 20 years.
When choosing a real estate agent, spend time not only on looking at his listings, but also researching his information and looking him up on social media like LinkedIn or Facebook.
And you should expect each real estate agent you interview to provide you with references. However, bypass the references that were handpicked and put on the list, for obvious reasons. Instead, ask for information on the current listings on his book and ask for permission to email or call a few of his current clients. These latest clients can tell you how the agent rates in terms of professionalism and services during the home selling process.
For more tips on how to choose your next real estate agent in Newcastle, call Annette Pinkerton directly on 0418447856.