10 Things You Need to Know Before You Hire an Agent
“It’s critical that you make the right decision about who will handle what is probably the single largest financial investment you will ever make.”
Not all real estate agents are the same. If you decide to seek the help of an agent when selling or buying your home, you need some good information before you make any moves.
An agent can cost or save you thousands of dollars
Picking a real estate agent to sell your house is one of those critical issues that can cost or save you thousands of dollars. There are some very specific questions you should be asking to ensure that you get the best representation for your needs. Some agents may prefer that you don’t ask these questions, since the knowledge you’ll gain from their honest answers will give you a very good idea about what outcome you can expect from using them as an agent. And let’s face it – in real estate, as in life – not all things are created equal. Hiring a real estate agent is just like any hiring process – with you on the boss’ side of the desk. It’s critical that you make the right decision about who will handle what since this is probably the single largest financial investment you will ever make.
1.What makes you different? Why should I list my home with you?
It’s a much tougher real estate market than it was a decade ago. It's quite different than it was even five years ago. What unique marketing plans and programs does this agent have in place to make sure that your home stands out favourably versus other competing homes? What things does this agent offer you that others don’t to help you sell your home in the least amount of time with the least amount of hassle and for the most amount of money?
2. What is your real estate brand's track record and reputation in the market place?
It may seem like everywhere you look, real estate agents are boasting about being #1 for this or that, or quoting you the number of homes they’ve sold. If you’re like many homeowners, you’ve probably become immune to much of this information. After all, you ask, “Why should I care about how many homes one agent sold over another. The only thing I care about is whether they can sell my home quickly for the most amount of money.”
Well, because you want your home sold fast and for top dollar, you should be asking the agents you interview how many homes they and their real estate have sold. I’m sure you will agree that success in real estate is selling homes. If one agent is selling a lot of homes where another is selling only a handful, ask yourself why this might be? What things are these two agents doing differently?
You may be surprised to know that most real estate agents sell fewer than five homes a year. This volume makes it difficult for them to do full-impact marketing on your home, because they can’t afford to advertising your home on anything other than the MLS System and they just can't afford the systems to create a high-profile advertising program your home deserves. Also, at this low level, they probably can’t afford to hire a team of assistants, which means that they’re running around trying to do all the components of the job themselves like photography and home measurements. Bottom line, their service to you and quality of their marketing may suffer.
3. What are your marketing plans for my home?
How much money does this agent spend in advertising the homes they list for sale versus the other agents you are interviewing? In what media (postcards, newspaper, magazine, television, the internet, etc.) does this agent advertise? What does the agent know about the effectiveness of one medium over the other? Be careful in looking at the results, many agents will throw in their personal advertising costs into their calculations wherein they are advertising their services versus advertising your home. Only items with your home's photo, address AND asking price included should be counted.
You also want to ensure that the real estate agent uses an easily recognized, national-brand real estate for sale sign and that they aren't planning on using a "one-off sign" that tries to create a "personal brand" for themselves.
4. What has your real estate brand sold in my area?
Agents should bring you a complete listing of both their own, and other comparable sales in your area.
5. Does your Broker and/or Real Estate Office control your advertising, or do you?
If your agent is not in control of their own advertising, then your home will be competing for advertising space not only with this agent’s other listings, but also with the listings of every other agent in the brokerage firm.
6. On average, when your listings sell, how close is the selling price to the asking price?
Most people don't know this, but this agent-specific information is NOT available from the local Real Estate Board. The average of all the agents is available, however. Is this agent’s performance higher or lower than the board average? Their performance on this measurement will help you predict how high a price you will get for the sale of your home. They should provide their list price to selling price ratio as well as the ORIGINAL list price to selling price ratio.
You should also keep in mind that it is the seller that ultimately decides the home's asking price and not the agent. (The seller and the buyer determine the selling price – and not the agent, although they will have some influence on getting you a better price.) Some agents now calculate a selling price to market value ratio to provide a clearer picture of the value they bring.
7. On average, how long does it take for your listings to sell?
This information is also NOT available from the local Real Estate Board. Again, the average of all the agents is available. Does this agent tend to sell faster or slower than the board average? Their performance on this measurement will help you predict how long your home will be on the market before it sells. Don't be deceived by this number. The board average is almost always the Days on the Market of only the most recent listing period and isn't the TOTAL number of days on the market.
8. How many Buyers are you currently working with?
Obviously, the more buyers your agent is working with, the better your chances are of selling your home quickly. It will also impact price because an agent that has the right systems in place can sometimes create an auction-like atmosphere where many buyers from other real estate agents bid on your home at the same time. Ask them to describe the system they have for attracting buyers.
9. Do you have a reference list of clients I could contact?
If they haven't posted a list on their website, ask to see a list. Then, proceed to spot check some of the comments.
10. What happens if I’m not happy with the job you are doing to get my home sold?
Can I cancel my listing contract? Be wary of agents that lock you into a lengthy listing contract. There are usually penalties and broker protection periods which safeguard the agent’s interests, but can you get out of the contract? How confident is your agent in the service s/he will provide you? Will the real estate agent allow you to cancel your contract without a significant penalty if you’re not satisfied with the service provided?
Evaluate each agent’s responses to these TEN questions carefully and objectively. Who will do the best job for you? These questions will help you decide.