The Smart First-Time Home Seller's Guide (2015)

Chapter 2: Considering Assistance As A First Time Home Seller

 

 

    Homeowners make the mistake of assuming that by eliminating the agent, they will benefit by walking away with a greater percentage of the profit from the sale. This is not always how things turn out. When you list a property on your own, without the help of a real estate agent, it is referred to as “For Sale By Owner”. The primary intention is to eliminate the middleman, the agent, and to avoid paying any real estate commission.

   Unfortunately, FSBO listings have a fatal downfall right from the start. They immediately give off a certain vibe to home buyers. If you see a FSBO listing rather than the more common agent listing, you may automatically think “bargain” or “distressed sale”. You may also think the seller is not serious and is just trying to see what they can get.

 

   Aside from that, the seller who posts a FSBO listing may discover that many interested buyers are just bargain hunters passing through. Many are looking for a great deal because along the way they began associating the term “For Sale By Owner” with “bargain”. This makes sense because it is a more seldom seen listing. FSBOs also have a failure rate of 85% to 95%. Buyers will take you more seriously when listing under an agent and your home will sell for significantly more. Statistics prove that selling your home with professional assistance will generate enough profit to pay for the commission, any agency fees, and still have extra money to put away.

 

   The Internet makes it instantaneous for buyers to access every kind of property on the market, such as short sales and foreclosures. This creates massive competition. Realtors use certain gateways and connections via the Internet to put your property before the eyes of millions. A Top Realtor will have the tools to do this and much more.

 

   Do not make the common mistake of thinking that all real estate agents are the same. In most places across the United States, there are several hundred or several thousand agents to choose from. Each real estate agent has different personal traits, different selling strategies, different ways to market houses, and different levels of skill. In most communities there are only a handful of top producing agents, a decent amount of average agents, and a lot of bad agents. In most regions, a few Top Realtors will end up taking 80% of the business while the other lesser agents are left with 20%. This only proves just how experienced they are at selling homes. Remember, your Top Agent also benefits when your home is sold for top dollar.

 

   So how will you know how to choose a Top Producer amongst so many lesser prospects? It is extremely important to choose the “right” real estate agent. Unfortunately, it is very easy to obtain a real estate license. You have to know the right questions to ask. Interviewing is going to be your golden ticket to selecting a top producing agent. Swallow your shyness and try to think of yourself as a businessperson rather than a home owner. You are looking for the best candidate to conduct your business.

 

   How long have you been selling real estate?

 

This is a very important interview question because, generally, more experience means more sales, along with the probability they have encountered a lot of different situations. However, there are new Realtors that can sell your home better than an agent with more than thirty years of experience.

 

   Are you a full-time or a part-time Realtor?

 

Do not forget to ask this question because a true top producing Realtor will be full-time. Being a successful agent involves long hours  and extreme dedication. Hiring a part-time real estate agent is not recommended because it is very likely that they will not have the time or availability to handle all of the aspects involved in the sale of your home.

 

   What proven results do you possess? How many properties did you sell last year while representing a seller?

 

You want to ask these questions because many Realtors work primarily with buyers just to trick you. Helping a buyer find a home and representing a seller with the sale of their home are two very different things. By asking how many homes they sold last year while representing sellers, you can figure out whether they primarily deal with buyers or sellers. Top Producers should possess a minimum ratio of 60/40. This means that sixty percent or more of their sales are representing sellers, while forty percent or less of their sales are representing buyers.

 

   What was the average time from the listing date to the contract date concerning the sales?

 

When selling your home, especially for the first time, one of the worst fears is the possibility of your home staying on the market for a long period of time. During the interview, ask them how long it generally takes for their listings to reach an acceptable contract.

 

   What was the average listing price to sale price ratio?

 

To no one's surprise, most sellers want top dollar for their homes. Asking a prospective Realtor about their average listing price to sale price ratio is very important. Do not make the common mistake of hiring a Realtor who “buys a listing”. A Realtor who “buys a listing” will suggest listing a home for much higher than normal market value in order to secure a contract, then later continuously “beat up” a seller to lower the price. By asking this question in the interview, you significantly reduce the chance of this happening. A Top Producer should have an average listing price to sale price ratio of 95% or higher.

 

   How many pending transactions do you currently possess?

 

This question will give you a great indication of a Realtor's level of success. If they only have one pending transaction, it is safe to assume that they are not a top agent. Top Producers should always have ten or more pending transactions.

 

   What marketing and advertising “vehicles” do you use? Do you utilize the Internet for marketing your properties for sale?

 

There is no doubt that the Internet has had a huge impact on the real estate industry. Realtors who say the Internet is not a relevant part of real estate sales are either ignorant or unable to adapt and are therefore not being truthful. Do not forget to ask how they market their homes for sale online.

 

   Do you have your own website that will come up in search results?

 

Seeing as there are far too many agents who do not have their own website, it is very important that the right agent has a their own high ranking website. Their website should rank on the first page, or at the very least the first couple pages.

 

   Do you have your own real estate blog?

 

Blogs today are quite popular in many industries and the real estate industry is no exception. Realtors use blogs to write about questions frequently asked by buyers and sellers, current real estate topics, and homes they are selling.

 

   Do you use social media?

 

Facebook, Twitter, Pinterest, and Instagram are all social media sites. During the interview, asking the Realtor what social media sites they utilize tells you whether or not they understand the importance of exposure when selling their client's home. The aim is to provide as much exposure as possible and this gives them an edge over other agents who are not active on social media.

 

   What camera do you use when taking pictures of the homes you sell?

 

Properties that have terrible photos have a poor chance of selling. You want a Realtor who has the ability to take quality photos or has a professional photographer on stand by. They should have a high quality camera with high quality lenses, not a digital one.

 

   What methods do you use to calculate the listing price of the homes you sell?

 

Realtors use different methods to price homes. Any prospective Realtor should be able to provide an example of a comparative market analysis (CMA) for you to view. Pay attention to the amount of detail used in their analysis to determine how much time and effort they spend on pricing their homes. 

 

   Do you have testimonials from past sellers whose homes you sold?

 

This is not an unreasonable request. Most Top Producers will have testimonials on hand or on their website. If possible, ask if you can contact any past clients to speak with them directly about their experience.

 

   Which methods do you use to communicate with your sellers and how often?

 

Lack of communication is a big issue for both sellers and buyers. Find out how frequently they touch base with their sellers so you know what to expect in the future.

 

   How much do you charge for your services?

 

Because commission is negotiable, it is important to ask prospects what percentage they require. Just because one agent may offer less than another does not mean you are getting a deal. You could be costing yourself a lot of money. Top Producers should be able to justify their commission fees. 

 

   Are there penalties for canceling a contract?

 

Most of time, there are penalties for the early cancellation of a contract. Ask if the Realtor will enforce the penalty. A Top Realtor will have the confidence necessary to get your home sold, so a penalty for an early termination should not be an issue.

 

   Make sure you understand what type of contract you are signing and its length. There are three main types of listing agreement contracts: Open Listing, Exclusive Agency Listing, and Exclusive Right-to-Sell Listing. The best choice for you depends on your willingness to handle certain home selling duties and the real estate market climate.

 

   An “Open Listing” contract involves the use of multiple agents in order to sell the property and get it off the market. The agent that sells the home collects the commission. An “Exclusive Agency Listing” contract means that a specified agent earns the commission if the home sells within a specified number of months, no matter how a buyer is found. An “Exclusive Right-to-Sell Listing” agreement states that the seller must pay the brokerage a commission if, by the expiration date specified, the property is sold, regardless of whether the buyer is found through the agency or not. Even if the seller obtains the buyer themselves, the brokerage still receives a commission.

 

   Asking these interview questions will give you the best chances at fetching top price for your home. You will be able to judge quickly whether or not you are dealing with a Top Agent or an incompetent bungler. If you feel you want to prepare yourself further, research more interview questions you can ask. There is no such thing as a stupid question. A true agent will be happy to answer any questions you have, from start to finish.

 

   What should you expect from your real estate agent during the sale process? A successful real estate agent should possess certain qualities. These traits separate the top agents from the amateur agents, and having high expectations is key to prevent yourself from being swindled. Show them that you will not be taken for a fool.

 

   Honesty is the first and most important trait. Even though Realtors have their own code of ethics to abide by, not all agents tell the truth. If an agent is unable to provide any testimonials or previous clients' contact information upon your request, they are not being honest with you and they do not have experience.

 

   Professionalism is a trait most sellers assume all agents have, but this is not the case. What actions prove that a real estate agent possesses professionalism? The most obvious sign is a polished image. Realtors should appear well dressed and properly groomed. Buyers will not take agents who wear jeans and sneakers seriously. Being a professional also means respecting other's time and being punctual.

 

   Negotiating skills are very important. The job of a Realtor representing a seller is to get the most money for their client's home in the least amount of time. The right candidate should know what to say to a buyer's representative. They should also know not to send a counter offer from their client to the buyer's agent without any discussion. This is unacceptable, as they are supposed to be the voice of the seller. 

 

   Creativity is a great quality for a real estate agent to have, indicating their level of adaptability and wit. No two homes are exactly the same, so agents need to know which selling strategies to apply. Property descriptions, photo angles, and writing advertisements are all things they must be creative with. This is where a lot of agents fall short. This trait ties in directly with experience and proven results. The more business an agent conducts, the better they are at handling specific situations. These qualities should earn any dedicated Top Producer a great reputation through their company, which is another attribute to assess. Always do your research every step of the way, as word of mouth will not be enough to ensure you have chosen the best candidate for the job.

 

   The next step is the assessment of quality techniques. True professionals align themselves with other great professionals. It is crucial to find out what business connections and services they offer. Upon request, a Top Producer should be able to suggest other real estate attorneys and mortgage consultants for potential purchasers. They should be more than willing to tell you what relocation network they belong to, what movers they can suggest upon the sale of your home, and what preferred partners or vendors they can recommend.

 

   The use of “cutting-edge” technology is extremely important. Ask about what technological tools they use when selling a property. Utilizing advanced technology allows real estate agents to be more efficient, providing them with more time to spend selling homes. Popular advances that help agents include tools such as digital signature software, iCloud, Dropbox, Evernote, and Buffer.

A comprehensive marketing plan is a paramount technique to consider.

 

Overpricing is a common mistake sellers make, and it is important to note that an overpriced home will not sell, even with the best marketing strategy. What does a comprehensive marketing plan entail? A real estate agent should use a mixture of both “older” and “newer” tactics in their marketing plan. “Older” tactics you should expect include television advertisements, newspaper articles, and direct mailings. “Newer” marketing tactics to expect include the use of their own personal website, personal blog, and social media profiles. A strong online presence is crucial, seeing as the majority of buyers start their search online.

 

   You can take comfort in the fact that, upon hiring a Top Agent from an established agency, you are protected by a complaints process. This gives the agents incentive to please every client, seeing as doing an unsatisfactory job will hinder their reputation with the agency. Now that you know the right questions to ask and what to expect, you can confidently weed out the right agent to accomplish your goals as a first time home seller.