Myths About Selecting Agents
Most of us have heard horror stories or even had an acquaintance or two with the real estate agent who takes a listing, puts a sign out front, submits the listing to the Multiple Listing Service, hosts an open house or two, and casually waits for an offer that’s just around the corner. Or worse yet, the real estate agent who, after signing the Listing Agreement, is never to be seen or heard from again.
Just as there are a few bad attorneys and a few bad doctors, the real estate industry is no different. You will discover that finding a good real estate agent to represent you and having the confidence of knowing your agent is good at selling homes is truly half the Battle. Remember, not all real estate agents are alike.
The first step toward having the confidence that you’ve hired the best Agent to sell your home is to interview a list of prospective real estate agents. Have a set of pre-determined criteria rather than selecting an agent by happenstance. For instance, selecting the services of the Realtor who has a lot of real estate signs in your neighborhood; or choosing a friend . . . or a friend of a friend with a real estate license; or hiring the agent who helped you buy your home is not necessarily the best way to vet their credentials.
Let’s dispel some myths of choosing the best real estate agent for the job of getting your home sold:
Myth #1 — A Real Estate Agent who is a Friend (or family member) will be the best person to help me sell my home.
A real estate agent who is a friend (or family member) may care about you but may lack the skills to get you the best price for your home. Friendship alone isn’t enough to establish a professional’s credentials. You must have a tough set of standards when selecting an agent, just as you would when hiring an attorney, a doctor, or an accountant. Remember, that selling your home is a business transaction not a charitable event. You want to hire the best person for the job of getting your home sold in the shortest period of time for the highest dollar.
Let’s be honest here, you wouldn’t think of hiring the CEO of your company without interviewing several candidates and gathering information on their educational background, professional experience and business acumen. There is certainly no reason to do anything less for someone who is going to assist you in the sale of one of your largest financial assets — your home. You should keep in mind that there is more to getting your home sold than just putting a “For Sale” sign in the front yard. You should look for a real estate agent who can:
- Effectively expose your home to the largest pool of buyers
- Negotiate the best price and terms for you and your specific real estate needs
- Remove the stress from the home selling process
A true friend will understand and appreciate that this is a business decision and will offer their credentials and expect to compete for the listing. Most importantly, if a problem develops while selling your home, do you want to risk damaging a friendship or family relationship?
Myth #2 — The Real Estate Agent who agrees to list my home for the highest price will get me the most for my home.
The Real Estate Agent who agrees to list at the highest selling price without verifying it with current market conditions does not have your best interest in mind. Let me be frank, some agents tell you what you want to hear. Some shortsighted Real Estate Agents are more interested in getting a listing than they are in whether it will sell at that price. In the real estate profession, this is known as “buying a listing”. The idea behind the sales tactic is to get your home listed and slowly overtime get you to reduce the price once . . . twice or as many times as needed until your home is sold. For sure this strategy may ultimately work in getting your home sold, however, it is an extremely poor strategy in selling a home at the highest possible price.
Think of it this way, if you were to walk into a bakery, would you ever consider paying the same price for a two-day old loaf of bread as you would for a fresh loaf of bread right out of the oven? Most buyers would not! They would expect a discount. In real estate, as in the bakery business, your house gets the most attention and the best possible price when it is a “new” listing fresh on the market. However, if your home is overpriced, it will sit on the market until you finally drop the price to reflect its real value. The problem is that, by then, it will have become like the two-day old loaf of bread and buyers will expect a generous discount on the sales price. The result can be that you have to sell your home for a price that is below what you could have received had the house been priced properly to begin with.
Myth #3 – The Real Estate Agent who offers the lowest commission will save me money in the sale of my home.
The Real Estate Agent who offers the lowest commission more often results in netting you less money. “How can that be?” you exclaim. “Surely, if I’m not paying out as much, I should take home more!” Well, I’m sure you’ve heard that old saying, “You get what you pay for.” This is particularly true when dealing with Real Estate Agents. Here is where the real value of a Realtor can come to light (or as they say, “the rubber meets the road”).
Let’s be practical for a moment. If you had a complicated and life threatening medical condition, would you ever consider choosing the doctor who was the cheapest rather than seeking out the best qualified medical doctor in that field despite the cost? Or, if you were being sued for thousands or millions of dollars, would you consider hiring an attorney who offers you one low rate instead of hiring a top notch litigating attorney with a proven track record? I’m going to assume the answer would be “No!”. So it begs the question – why would you sell yourself short by picking the cheapest Real Estate Agent and believe that you’ll get the best outcome?
I believe that many homeowners overlook the simple fact that the art of negotiations is a skillset that requires training and expertise. And let’s be real for a moment, training and expertise are not cheap – they come at a cost. Yet, someone with the requisite training and expertise are worth their weight in gold. Here is an important tip to remember: if the agent who represents your interest is willing to “flip flop” on their compensation, they are going to “flip flop” when it comes to negotiating on your behalf. You want to choose a real estate agent who is able to communicate their value and hold firm on their compensation fee. It goes to reason that a Realtor who is able to effectively communicate their value to you is going to be effective in negotiating the best price and terms for you, too.
Myth #4 – The Real Estate Agent who lists the most homes in my neighborhood is the best Agent for getting my home sold.
The number of listings taken in a specific neighborhood by a real estate agent should be one of several criteria you evaluate. What is more valuable? An agent who listed 32 homes and sold 25? Or an agent who listed twelve homes and sold all twelve? So you need to ask some questions.
- How many of their listings did not sell?
- How many were reduced over and over before they sold?
- How long were the houses on the market?
- How smoothly was the process handled?
- How accessible was the agent when there were questions or problems?
Quantity is important, but only if all of the quality questions have been answered satisfactorily. The best agent is the one who:
- Does the most effective job of marketing the property
- Negotiates the most favorable terms and conditions
- Communicates effectively with the seller to make the process as smooth as possible
We have just dispelled some of the most common myths. Use this article to determine a list of criteria you should apply when choosing the right Realtor for the job of getting your home sold for the maximum pay-off.