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This really pisses me off. I saw a commercial for HomeLight. This is a company that says that they can match you with the “best” real estate agent in your area to get you the most money. Their logic is wrong on so many levels. This is not how you should pick the right real estate agent for you when selling your home.
They pick the agent for you based on the agent’s sales and in the commercial they focus on how much they are getting over list price. If an agent lists a home low to get multiple offers it will sell well over the list price. Add to that, that more expensive homes priced under value will see a larger dollar amount over the list price.
For example, a house price at $140,000 that is really valued at $150,000 should at least sell for $150,000. Right there you have $10,000 over list price. If inventory is low you could potentially sell for $155,000. But, that could have happened if it was listed at it’s real value and the amount over would have only been $5,000.
Another example would be a house priced at $2,000,000. If the real value is $2,100,000 and it sold for at least its true value then you sold for $100,000 over the list price. It doesn’t have anything to do with the ability of the agent.
The Truth About What Your Home Will Sell For
There are things that agent’s do that don’t necessarily mean that they are the best agent or the best agent for you. If you are going to sell your home and you want the best price there for it, there is really little that the agent can do about the price your home sells at. Sad fact.
For example, your home was built in 1970 the kitchen was last updated in 2000, the agent could say modern kitchen and with the right angle of the picture could make it look great.
On the outset, this seems like they could help you get more money. But then the buyers walk through your home and if you get any feedback at all it is “It looked better in the pictures”. This means no offers and then the agent comes back to you saying “well there have been no offers and we need to lower the price”.
You need to understand how your home is valued. Most of your value is dependent on you, the condition of your home, and the sale prices of comparable homes. Not the knowledge of any certain agent. What is updated and how long ago? What needs to be fixed or fully replaced? Are there any smells? Is it cluttered? Is it too personalized? What about the location & proximity to schools, shopping, city services, x-way, too close to railroad tracks, main road, backs to woods, water or has a great view?
All of these things about your house are out of the control of any agent. If you have an outdated bathroom, the agent won’t update it for you, but a buyer will want the price lower. If you back to railroad tracks your value will be lower than similar properties in the same neighborhood a few streets over and not near the tracks. It’s just how it goes.
Types Of Listing Agents
There are 3 types of listing agents. There is the one that will list your home high, hoping for an offer, but expecting to ask you to lower your price. They want to get your hopes up that you would get more for your home.
Then there is the agent that will list it low and hope for multiple offers so they can pit the buyers against each other to push the price up. This can work but is risky as well. You might end up not getting anywhere close to what you could have if it was priced right.
Last there are the rare agents. These are the ones that will list your home at a reasonable price which is in line with similar sales in the area with it being just above so you have some room to negotiate.
With all of 3 types of agents there are things to take into account, like is it a buyer’s or seller’s market. If it is a seller’s market you will want to list higher since you are more likely to get it. In a buyer’s market there will be more competition and you will need to price more aggressively.
What it comes down to is, you need to know what the most recent sales of the most similar properties compared to your home was. You also want to know what a fully and newly renovated property sold for. Knowing this you can see where the difference in values really is.
Process Of Picking A Real Estate Agent
If you are going to list your home with an agent you need to see multiple people. Don’t let a slick presentation win you over. If someone is promising you the moon it likely won’t pan out the way they say.
Be sure that you feel comfortable with them. Getting multiple people to come out means you will get multiple comparative market analysis or CMA’s. This will give you a better idea of the true value. Real estate agents are supposed to act as a fiduciary. This means that they are working for your best interests. Unfortunately, this is not always the case and a house that sells quickly means they that get paid faster. An even better idea is to pay for an appraisal. This will be a completely independent value.
how do you choose which agent to actually use? Well, there are a few things that you can do to pick the best agent for you. You will need to interview at least 3 agents to pick the right agent to sell your house.
The T.V. Agent
First, pick someone who advertises. This will make it easy to get the first one. Here are the pros and cons of hiring a T.V real estate agent.
Pros – These agents run teams which means there are multiple people to help with the sale of your house. They are more likely to have professional pictures taken. Since they advertise they will have a list of potential buyers. If the market is slow with a lack of buyer’s this will help that they already have people that are looking.
Cons – Those agents do a lot of advertising and have the money to do that since they sell enough houses. This doesn’t mean that they are going to be your agent though. In order to sell that many houses they will have other agents working for them that will be your listing agent, even though the listing is technically under the main agent. You may never even see the agent that is in the ad.
Some of these agents will charge a premium commission with additional fees. You are getting some additional benefits, but unless there is currently a lack of home buyers this won’t benefit you. If the market is stable or there is a lack of home listings and houses are selling fast, then just go with another agent.
Friend And Family Referral
Ask around to friends and family to see if there are any recommendations for someone that they had a good experience with. I will say that the main reason people have a bad experience with an agent is that the agent doesn’t communicate enough. Especially when something goes wrong.
Pros – You have someone you know and trust telling you that the agent did a good job. This will give you information about how they work. You can ask how well they communicated with them. Did they show them enough information about the value of their house? Did they seem to know the process and handle hiccups well?
Cons – They may not have a list of potential buyers. If they haven’t been in the business a long time they wouldn’t have enough past clients to build that number. If there is a shortage of buyers this would mean that they can’t really do much for you. But if that’s not the market, then they could work for you.
Google Search
Do a search for real estate offices in your area. Look for a few offices that are close to your house. This way you know that they are familiar with the area and the values there. Look at the list of agents at each office and read any information about them.
If someone stands out to you look at their personal site and see what they say about themselves. Look at their listings and see how the pictures and descriptions look. This will be about picking someone who just feels right. Honestly this is about the basic gut instinct. We all have it, you know the feeling you get when you just like or trust someone right away. So go with it here.
Pros – You have done a little research on them. You know how they present their listings and you will be able to see if they are doing anything different from anyone else. You have gone with how you feel and this shouldn’t be underestimated. People worry about things too much and don’t just trust how they feel.
Cons – You don’t know if they do much advertising or have a list of potential buyers. You don’t have any knowledge about how they really work. They might be a single person trying to do everything or have a team of 10.
Making The Appointments
Don’t feel like you need to just meet with one referral or just one person from your online search. Go with everyone you feel could work for you. When you have at least 3 people picked
I suggest that you meet with the T.V agent first. This way you see, what should be, the most honed presentation and have their value (CMA) to know what they think your home is worth. Just don’t fall for the prepared responses when you say that you don’t want to sign a listing agreement that day. They will be persistent. They practice what to say to handle any objection that you have.
Then go with the google search agent(s). These agents should be next since they are not known to you. You will have them to compare with the T.V agent and be able to see how they present what they will do for you and the value they think you can get.
Finally, schedule the appointment for the referral(s) that you got. Now that you have information from the agents that you know nothing about you will be able to compare them to this agent(s) that you already learned about.
Making The Decision
Do not sign a listing contract at any appointment. This is a big deal and you need to think about each one. I will say that in most situations, the last person someone has contact with will be what they choose. I don’t want you to feel that you must choose the referral agent. Take time and think about what they said and what information they left you.
If any of them promised you the world run away. They are not worth the headache
Go with the person who says this is what I can do for you, this is why I can do this and this is why I feel your value is what it is. Make them show you their work. You want to see a lot of comparables for your house, you want to see their sample listings and get a checklist or handout that explains how the process will go.
Finally, you must feel comfortable with them. If they do everything I just said, but they are too pushy, maybe they are the type to invade your space or even smells don’t pick them. If you wouldn’t want to deal with them throughout this don’t.
Let’s Get This Right
I know that is a lot to take in. Let’s simplify this a little. Ask friends and family for a referral. Do a search for agents close to your home. Then make an appointment with those agents plus add a T.V agent. Collect the information from each appointment and do not sign a contract until after you have met with all of them and thought about what you learned.
I know that this is work. But hiring the right agent will make this so much easier for you and
