Selling Real Estate Isn't Magic & Realtors Are NOT Super Hero's
There’s no problem in locating the nearest real estate agent as that’s the easy part. After all, you see real estate agent signages in every city, every neighborhood, and on every metro Vancouver and Fraser Valley street corner!
However, deciding on choosing which real estate agent to go with is something different. Will he do a successful job of selling your property for the highest price, in the shortest period of time, and the least amount of inconvenience to you?
We normally don’t get exposed to real estate agents too often, other than a few times in our lifetime. Choosing a real estate agent might not be the most obvious decision to make, wouldn’t you agree? Yet, a vital part of the marketing process of your home is actually the selection of the right real estate agent!
In other words, choosing the wrong real estate agent will undoubtedly lead to financial & emotional headaches ahead!
When choosing a real estate agent, there are a few major home seller mistakes to avoid, and we have lined them up for you:
Mistake 1: Choosing The Real Estate Estate Agent Who Offers The Lowest Commission
home seller mistakes choosing lowest comm
Now that you’ve decided to sell your home, your next step will be to interview a number of real estate agents. There are many agents out there who will undercut the competition by seriously lowering their commission, in an attempt to win the listing mandate!
“As a home seller, I’m saving money already, so why is that a bad thing,” you say?
Well, there are a few ways of looking at it:
Reduced commission means reduced marketing resources available to assist in getting your home sold. The potential marketing tools that agent suggested he’ll be using, will be substantially less than what a full commission agent could offer as part of his marketing strategy of your property.
Fair point, no?
Say, if this listing agent decides to go the route of heavily discounting the commission rate so he can get your property listed, how many buyer agents are likely going to be turned off once they find out how small their cut of the commission will be? Hence, it would financially benefit the buyer agent to take his client elsewhere and be paid a standard market going commission for the services provided.
Let’s think how many buyer agents would get excited to work with your listing agent?
And, finally, aren’t you curious to know why the agent needs to lower his commission that much to get the listing mandate? When he drops his commission at a drop of a hat, hereby hurting his bottom line, how good will he when it’s negotiation time on the price of your property, hereby hurting your bottom line?!
Does making this decision still make you warm and fuzzy at the thought of saving money?
Before signing up with the real estate agent who’s offering the lowest commission, please read the above again. Hopefully, it’ll put his listing presentation in perspective versus what other real estate agents are bringing to the table when marketing your home.
Mistake 2: Choosing The Real Estate Agent Who Gives You The Highest Listing Price
home seller mistakes choosing highest price
Now that you’ve decided to go on the market with your (overpriced) property, odds are quite high that you will eventually sell your home at a price below the going market price. One can truly not emphasize enough the importance of starting one’s marketing process at the correct price.
The first 3-to-4 weeks of marketing will be crucial, and if the asking price is too high, potential buyers will plainly not even consider your listing. Or worse, other real estate agents will use your overpriced property to bounce their educated home buyers off to more correctly priced properties. Regardless how you look at it, the end result will be that the overpriced property will sit on the market for a much longer time, and eventually sell at a much lower price than would have been achieved, if only one had properly priced it from the start!
Let’s assume there’s this one buyer who decides to put in an offer: another unfortunate risk you’ll run with selling an overpriced property is that the banks will have trouble finding value during their appraisal; hereby limiting the finance amount for the buyer. And unless there is a bigger deposit to make up the difference, the deal will likely fall through.
Being a home seller, you only have one chance to make a first impression; and while one might be tempted to go with the real estate agent who suggested marketing your property at a higher price, please make sure to ask for proof of how that price was determined by means of a Comparable Market Analysis.
Check with the agent what is currently on the market with similar features as your property. Having a look at the recent sales of similar homes in your area will give you as the homeowner a more realistic expectation regarding potential sale price of your property. Plus, it will immediately set the agent straight regarding the listing price he put forward.
Mistake 3: Choosing The Real Estate Agent Who Sold The Most Properties
Whereas one might be tempted to use the total number of properties sold as the sole measuring stick in choosing the real estate agent. While the agent who only manages to sell a couple of properties last year, might not be your direct choice, the agent selling 50 properties in a given year should not immediately be the first choice either.
Per Mistake 2 earlier, the real estate agent who gives the highest listing price, probably gets a lot of the listings, but it will become evident that the overpriced properties aren’t selling and remain on the agent’s books for long periods of time. In other words, the number of properties the agent eventually sells versus renting the properties that he still has on the books, will be quite low. In real estate terms, they refer to it as the sales-to-listing ratio.
A real estate agent who sells 13 out of 15 listings vs another agent who sells 20 out of 50 listings must be doing something better, no?!
Do yourself a favor and don’t go looking for the real estate agent who sold the most properties but have a look at how well the agent priced the property, how he suggested to tackle the marketing strategy, how his reactions were when you attempted to reduce his commission (ie test the negotiation skills) or how his overall presentation and communication report was. These skills will be very important when it comes to buyer negotiations!
Is the real estate agent’s overall service equivalent to the high sales figures?
Mistake 4: Choosing To Go With The Real Estate Agent Because He’s Family home seller mistakes choosing family!
Selling your house is very serious business. Most real estate agents will concur that every sales contract is different. Every client has his/her specific requirements, needs, wants & wishes, and all of this needs to be properly documents by both buyer and seller agents. Therefore, it is very important that, not only during negotiation but also at the time of closing, everything is legally correctly worded.
You might be uncle Jack or cousin Marie’s favorite, when it’s time to dive into some intense negotiation periods, and subsequent legal paperwork, if things were not to work out with the buyer(s), it might be tough to split the personal from the business angle of the property sale!
Will you or your relative be able to look past whatever may have developed from a home selling process if the experience isn’t the greatest?
Maybe one’s decision to choose the relative should perhaps not be automatically assumed, as whoever will be marketing your home, will going through a fair interview process together with multiple agents, all vying for the listing agent job!
Let the best (wo)man win!
Mistake 5: Choosing To Interview Only One Real Estate Agent
It might be highly recommended to interview different agents from different agencies, as each agency will have its own strengths in marketing and servicing. The respective agents will have their own tools and skills to bring to the table when proposing their marketing plan of your property.
If you only interview one agent, you would be not exposed to any of that.
As in a lot of other businesses, the 80/20 rule applies in real estate. If anything, it’s skewed even more dramatic (numbers of near 90/10 in certain real estate markets are more common). In other words, the remaining 80-90% of agents will do whatever it takes to gain those relatively few remaining listings; even if it means exaggerating a bit when it comes to the listing price.
To explain it slightly differently: say you’re only interviewing one real estate agent to list your property, you should then know that there’s an 80-90% chance you’ll get one of the latter ones. In order to get your listing mandate, these agents will tell you whatever you want to hear in order to get your business.
Is that the type of risk you want to run by interviewing just one real estate agent?
Mistake 6: Choosing To Ignore The Real Estate Agent’s Professional Expertise Not Just Experience
It has always amazed me how little research home sellers do prior to choosing their real estate agent. A lot of times, it seems that people spend more time reading the latest reviews before buying that newest UHD TV, than looking into the real estate agent’s history, before hiring him. Even though, the financial impact is easily 100 times bigger and will impact you for the next 20 years!
When choosing a real estate agent, besides looking at his listings, have you ever Googled his details, and tried finding him on Twitter, Instagram, Tumblr, Google+, YouTube, Vimeo, Facebook, LinkedIn, or ? And did the social activity on those platforms coincide with the professionalism and service you expected? Do they have an outstanding web site or just some cookie cutter page that is probably boring and out of date, let alone dozens of platforms and a professionally developed and fully branded real estate company. Gone are the days when a realtor can tell a prospective seller or buyer they are the "area expert" and get away with the bare minimum. Run the other way from those realtors which sadly now makes up 90% of your local agents. Every real estate agent should be able to provide you, as the home seller or buyer a list of client testimonials on their web site.
Why not ask the real estate agent details of the current listings he’s working on and ask him whether you can call or email a few of those clients? You will very quickly find out how these recent clients rate the real estate agent’s professionalism and services throughout the property selling process.
Another great way to find out how an agent behaves when he’s not around sellers, is to go ‘mystery shopping’. Call him at his office, follow him or her online or stop by one of their open houses or even have someone call for you, and enquire about a certain property where sensitive questions get asked (eg “What’s the lowest offer the owners will take for this home?“). Will the agent divulge crucial information he should not have revealed?
Mistake 7: Choosing To Work With A Part-Time Real Estate Agent - An Old Agent - A New Agent
Why do you think there’s such a high turnover of real estate agents. Any 3rd party might look at their local real estate agent and believe he’s got a cushy life, driving around town all day with these buyers, doing a couple of seller presentations and signing the big sales contracts.
Selling real estate really can’t be that difficult, now can it?
The question needs to be asked whether the real estate agent is doing this part-time or full-time involved in the real estate business.
How could a part-time real estate agent possibly be flexible enough doing all these buyer viewings? How long before clients get a response back to their enquiries, and when will they go for viewings of the property? What’ll be the timing of the marketing of the property? After hours? Weekends? Finally, where do you as the home seller fit into this schedule?
Overall, the work that is involved in managing the listing, marketing it, giving it the much needed exposure, writing offers, and finally, selling it & bringing it to a successful close, demands the attention of a full-time real estate agent!
If there’s one item in this entire article you should pay attention to, it’s avoiding THE biggest home seller mistake of overpricing your property.
As you may slip through the cracks with the other home seller mistakes when choosing a real estate agent and not necessarily experience a professional home selling service, in the end, at the right price, at least your property will be sold!
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