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Real Estate agents make a lot of money so it’s best to make sure yours earns it. In fact old-fashioned commission collecting agents saw their slice of the pie grow 78% in the six years between 2011 and 2017. Yep that’s right, 78%, because that’s how much prices went up during the boom. Those agents are still selling the same way and if they are still charging the same commission something doesn’t add up. . Choosing the right Agent is vital. This is one of the most important relationships you will ever have. In a relatively short amount of time you, with the guidance and support of your agent, will have to make extremely important decisions.
I like to watch potential agents in action. I personally have never signed with an agent that I hadn’t seen in action. I visit homes they have listed. Posing as a buyer I ask questions that a buyer might ask, not because I care, but to gauge their skills. Are the neighbours renters or owners? Can you show me a recent property sales report to show what the house is worth? Are there any known defects in this property? I also want to see if the agent on the signboard, is the same person in the open house and not an assistant. Choosing the right agent can be the difference between getting a great result or no result at all. Don’t do it without research.
When you are shortlisting agents to provide an appraisal and sales strategy, try to meet with at least one that offers a genuine alternative such as Purplebricks or one of the other fixed-fee agents. Compare the different approaches and ask the right questions.
Make sure the licensed agent is the person who will actually meet potential buyers and negotiate. In some cases a junior sales assistant does the actual work including the negotiations. If a sales assistant is handling your home, look for another agent.
You should have the right to fire an agent that doesn’t perform. And this sort of clause in a contract protects you from what the industry calls “conditioning”. Conditioning a vendor is when an agent quickly changes his tune soon after you have listed. During the “courting” phase of the relationship the agent tells you how wonderful your home is and talks up the price it will achieve. Soon after listing the agent starts telling you everything that’s wrong with the property and says things like “the market is telling us the price is too high”. These are tactics used to pressure you into selling at any cost. The agent’s focus is on their commission and not your best interest.
Most will flatly refuse, and some will tell you it’s illegal. It isn’t. You will hear all sorts of excuses. But why shouldn’t you have the right to know who has been in your home and, if you want, to speak with them? You could even ask how the agent is performing.
So it sounds like an odd question but ask your potential agent to tell you something you don’t know about negotiating. You are after a great negotiator, see if they can demonstrate how good they are. Remember you want to know what your potential agent really knows about negotiating.
One big mistake I see many people make is, believing their own dreams. It’s easy to sit in your lounge room with your partner and talk up the value of your property to a unachievable level. Before long you’re imagining what you will do with that extra money and that can cost you big dollars. Valuations are only accurate when modelled with comparable sales. You need real market data and local knowledge. Setting the right pricing is one of the key reasons you are after an expert. Too low could cost you dearly, too high and you could wind up with no sale at all.
You need real evidence, not platitudes.
One of the oldest tricks in the real estate playbook is suggesting your home is worth more than it really is. For example, by claiming your home will sell for more than a $1million when the true value is closer to $900,000 the disreputable agent is “buying” your listing. This can lead to frustration and heartbreak.
A couple of inspections later and the agent tells you everything potential buyers don’t like about your home, saying the buyers are pricing your home somewhere in the high $800’s. The conditioning process is in full swing. When you are finally presented with an offer of say $920,000 you may actually feel relieved.
And who is really losing out? For the agent, a sale at $1million (at say 2.2% commission) is $22,000. A sale at $920,000 is $20,240. So the agent is just $1,760 worse off. However, you are licking your wounds, feeling like you’ve taken an $80,000 hit because you were lied to in the first place. Or worse, it may sell for even less. If the home sits on the market at an inflated price, potential buyers purchase elsewhere. Then, as the price reductions start, others feel there must be something wrong with it. If you have a mortgage, think about all the additional interest payments you will make if the home sits unsold.
Ask every agent how to best prepare and present your home. They should know the most likely type of buyer. Ask them who the home suits and why. They should give tips on how to declutter and which areas may need an update. When your budget is limited they should help you prioritize work to have the greatest impact. If they can’t provide help with any of the above, look for another agent.
You have to be comfortable with this process. In the right market (usually a rising market) and with the right property, auctions can be great. But your marketing must attract a number of very interested buyers. If there is only one buyer and no other hands go up it can turn sour very quickly. Also beware of an agent who tells you “an auction is the one sure way to reveal the true value for your home”. That’s nonsense. An auction will only reveal the value placed on your home by the people who the agent attracted on the day. Different day, different group of people, different result. Your agent should have a genuine view of the real value of your home.
You will also be asked to pay for things such as photography, copywriting, a signboard, floor plan and online advertising. Some will even suggest expensive newspaper advertising. Given a combined 7.7 million Australians visit Realestate.com or Domain every month, do you really need the expense of local press? In the majority of cases great photographs online and a well-priced property will do the trick. Make sure you don’t pay for expensive marketing that’s not helping you sell your home.
If it’s too many, how will you get the agent’s full attention, too few and what does it say about the agent’s effectiveness?
Compare these figures. If the agent you are dealing with has homes that are on the market for much longer than the other agents find out why. If the agent can’t answer that question to your satisfaction, find another agent.
It may be that you don’t ring them all, and just pick a couple randomly. But ask for at least five If they can’t hand over that many then how many happy customers does the agent actually have?
You need a commitment to a level of communication that suits you, not what suits the agent. Will you have to wait until the agent calls with details of any viewings or feedback? Will you receive notifications of all offers instantly, in real time? Will you have the chance to see all feedback as it comes in? This can allow you to action anything that is troubling a potential buyer or set the record straight. The fact is that no one knows your home like you.
People are busy. Often, they want to ask a question or even make an offer late in the evening after work and dinner is done. Will they call an agent at 9.30pm? Why shouldn’t they be able to ask a question or make an offer online anytime? If your agent doesn’t have an online platform that provides that type of responsiveness and transparency, are you really being easy to deal with for the buyer? You deserve a platform where you can see every question and choose to answer yourself or leave it to the agent. That puts you in the drivers seat; after all, the agent is working for you.