In this two-part series on finding a real estate agent to sell your home, Paul Valentino, president of Coldwell Banker Residential Brokerage in the Greater Washington area, offers tips on how to find the right real estate agent for you. In Part One, he discussed what sellers should ask agents about their online savvy. Here, he discusses negotiating fees and assessing the agent’s track record.
Determining what your real estate agent can do for you online is extremely important, but there are many other aspects of his or her expertise that you will need to assess before signing the contract.
Here are some questions to ask an agent to find out if he or she is the right one for you:
●What commission rate do you charge? Listen carefully to the answer. Marketing your home is more than just selecting an agent. You need to select the company behind the agent as well. The company is the foundation which provides all the tools you need. The real issue here is what agent/company can help you walk away with the most dollars.
Ask to see the agent’s and/or the company’s performance. You want to work with an agent/company who consistently outperforms the market. What does this mean? This means getting their clients the highest sales price compared to the original list price (SP:LP ratio) of their previously sold properties.
Be sure your prospective agent provides the original list price, as some agents will overprice a property just to get the listing knowing it’s too high and later asking the seller to lower the price. You don’t want the performance comparison to use this second list price. It’s a flawed representation of their performance. For example, the original list price is $100,000 and the house sells for $95,000. In this case the sales price to list price ratio is 95 percent. The higher this percentage is, the better the job this agent/company performs for their clients.
So, regarding the fee, let’s compare two agents: The first agent agrees to list your property for 2 percent less than another agent and gets 95 percent SP:LP, while the second agent charges 2 percent more and has proven he achieves a SP:LP of 98 percent. Which agent delivers more performance? In this case, the one who charges the higher commission rate. On average, you’ll walk away with an additional 1 percent in this example, after paying the higher commission rate. In most cases, the old adage rings true: You get what you pay for. Again, ask for written proof with stats taken from the multiple listing system.
●How long will it take to sell my home? Again, a top performer will be able to show you what you can expect from the market. Have her show you how she and her office/company perform compared to the market and the competition. In my opinion, the fewer days it takes to sell your home the better. Statistics prove a seller achieves a higher SP:LP when sold in the shortest amount of time. How do the agents/companies you’re interviewing fare in this comparison? Seek written proof of performance.
●Tell me about the market. Is it a seller’s or buyer’s market? A top performer will be able to provide printed material on market conditions in the area around your home.
This data should include not only sales information (comparable properties which have sold and settled in the past six months) but also items such as average days on the market for homes that sold in the past six months, SP:LP, length of time unsold properties have been on the market, how many properties sold this year compared to last year and the prices of those sold properties so you can compare market prices this year to market prices last year. This will provide you the information on which to determine whether the market is quicker or slower than prior periods and what a reasonable market price could be for your home.
● How will the agent communicate with you — phone, text, e-mail? And how often? Will he provide reports on market changes? If so, how frequently? A top performer should provide you reports on market changes and activity in your market at least on a weekly basis.
●What happens if I’m not satisfied with your service? Does the agent/company provide a written guaranty indicating under what terms you can cancel your agreement?
Selecting an agent isn’t as challenging a process as it may seem, if you ask some pertinent questions. How long an agent has been in the business or how many homes the agent has sold in the neighborhood don’t indicate whether the agent is a top performer.
Selling your home is one of the largest financial transactions in your life — make sure you trust it to the right agent. I also encourage you to interview several agents, even if you have a referral.
Previously: Ask real estate agents about their online savvy
Paul Valentino, president of Coldwell Banker Residential Brokerage in the Greater Washington area, is a 30-year real estate veteran. A certified residential broker, he holds the National Association of Realtors e-PRO professional real estate designation and is a member of the National Association of Realtors, the Virginia Association of Realtors and the Northern Virginia Association of Realtors.