Start with expectations. What should you expect from your real estate agent if you decide to sell your home? As a seller of many properties for over 30 years, both my own home and investment property, I have learned a few things. The first thing that I have learned is that your real estate agent needs a partner, that’s you. No matter the talent of the agent you select, they can not overcome resistance from their client. So how do you find the best agent to sell your home?
I will cover some concepts in this blog not only finding the best agent to sell your home but as mentioned, the concept of partnering with an agent. The better a home seller you are, the better the agent can be. It’s truly a partnership that is in a sense codified with the listing agreement.
The industry has changed dramatically over the past decade. Many people can see homes for sale on national websites before they engage an agent. In the past, the agents were the only people with access to what was offered for sale. Because of the internet, photos are a key element for buyers to see what you have to offer.
Partnering with your agent is key
This is where partnering with your agent is key. A great example of partnering is when your agent tells you that the house is not ready for listing. Why, because it needs to be cleaned. You may not think that it does, one of those “can’t see the forest for the trees” things. Your agent is not there to micromanage you, if they recommend something, consider that the recommendation comes from experience.
If you take the time to declutter your home, repair walls, and paint where needed, you will sell your home faster and get more for it. You need to make the selling agent’s job easy so they can attract buyers. Some sellers clean up their home and then let it get messy again.
If you have children, you will have to do your best to keep their areas neat. If you have pets, pick them up after them. Cat boxes can be a turn-off, clean them multiple times per day with a scoop, do not keep adding litter, that will not remove the odor. Remove pet hair from your home. Vacuum frequently. If you are busy, hire a company to come in a do a deep cleaning perhaps including carpets and windows.
After your home is listed, you can expect to see a buyer at any time. So do not just keep your house clean during the weekend, you must keep it clean and tidy all week. About the lawn and garden. Give it care, pull weeds. Walkout to the street and take a look, do you like what you see?
If your neighbors are not taking care of their gardens and you know them, you may mention that you could use a little help from them. Use your garage to park your car if possible, keep cars off the street in front of your home so people driving by can see your home. Buyers also need a place to park. If it’s hot or cold in your area, do not expect buyers to exert too much energy looking for a place to park.
Ask your Community Association to help with compliance
If you live in a community with an association and your neighbors are not cooperative and their failure to follow the rules will diminish the value of your home, file a complaint. I have done this in the past, your name will be kept confidential. If the community is not keeping up the common areas, contact them and file a complaint as well.
Back to your agent. When you list your home, you will be asked to sign a listing agreement. These agreements were drawn up by attorneys, your agent is not an attorney. Boiled down, they generally state that you agree to work with your agent and your agent’s broker to represent you in the sale of your property. If the property sells within the contract period, you owe the broker a commission.
As a seller, you are not asked to pay anything upfront. The agent on the other hand is an independent contractor, not an employee of the broker. The agent will begin spending his or her money immediately by placing your information in the MLS and on popular internet sites. Some agents pay photographers to take professional photos of your home. Advertising on social media sites comes with a cost that your agent covers.
Your agent spends their money upfront on your home
Spending on your home by the agent will have a direct bearing on the amount of the prospective commission. If your home is selling for $150,000 you can not expect your agent to spend $500 on professional photos. A home selling for $400,000 will generate a higher commission and thus permit the agent to spend a higher portion of their commission on your home.
In other words, your agent invests in you well in advance of the sale of your property and their reimbursement of a portion of the commission. You may choose to use a big national named real estate agency or a local broker, regardless, a local broker in business for themselves will manage the sale and the real estate agent working under the broker’s license will work with you. More on the commission later.
So what should you expect from your agent? To start, your agent represents you and not your neighbor, or anyone else. They have a duty to you to present the facts about the market and the estimated amount that you should sell your home for. This is based upon a study of homes like yours that have sold in the area for the past months and other factors.
Your agent is trying to build a reputation
Your agent will give you the high price and the low price and explain why they believe each was achieved. This requires time to research all of which the agent does at their expense, again before they are compensated. Forget the idea that agents want to dump your house at a low price to move to the next one or other urban legends.
Your agent is an independent business person who relies on repeat business. Your agent is trying to build a reputation in the area for negotiating the best deal for their client based upon your circumstances.
Back to the clean house. If you list your home for example at $300,000 and the best offer after 90 days on the market is $275,000 perhaps it is because every time someone views it, it is messy, there is food in dishes in the sink and weeds in the garden. Remember this is a cooperative venture. Give your agent tools to negotiate the highest price possible.
Another thing, your agent is not a wizard. If you are asking $300,000 for your home when the highest comp in the area for a substantially similar home is $285,000, expect to push back. Unless of course, the market is on the upswing, prices are rising and inventory is tight.
Think of advantages that will help your agent get more for your home
Think of advantages that will help your agent get more for your home. A great example is that you read an article that the city was planning to build a park at the end of the street the following year. The agent may not know this. Pass along the article, this could be a selling point that increases the value of your home.
On the dark side, never forget to tell your agent of any negative things that would be discovered in an inspection. That pipe that was leaking in the ceiling for a year before you found and repaired it caused mold to form. That will be found in an inspection and could sour the deal since the potential buyer will be well into the process by the time the inspection is held.
Anything that should be repaired or replaced should be discussed at the outset with your agent. This is where a good agent shines. They know people who can fix anything and with your permission can contact the contractors to have the work done. This “full” service aspect is one of my favorites.
My agent stepped up and had his landscape person take care of the home
I listed a home one time and moved to a new home before it was sold. The problem, who was going to take care of the landscaping? My agent stepped up and said he would have his landscaping person take care of it and he would personally visit periodically to check. He followed through and the home looked good when a buyer decided to purchase the house.
An excellent agent I hired to sell an investment property found a handyperson who came in, painted, repaired several things, and followed up with new appliance installation. My agent replaced the door lock and supervised the handyperson. All while I was out of state.
These are examples of to what extent a good agent will go to make a sale. So when you are wondering after the second week why your property is not selling and you begin to blame your agent, think about what the agent has already done.
The rules are these: If your property is correctly priced, clean, presentable, and in the desired area, it will sell in a fairly short time or at least within the lower range of the days on market study. As corporations like to say, there may be “headwinds” that your agency will discuss with you during the initial interview.
Headwinds that prevent a quick and more profitable sale
“Headwinds” can include and will affect the selling price and the time to sell and are examples only:
- The street in front of your home being torn up for a new sewer pipe.
- The street your home is located on was just re-zoned commercial.
- Your neighbors are loud (when potential buyers are there), their cars are parked on the grass and their property is unkempt.
- Your home is listed just after school starts and you are in an area that attracts families with school age children.
- An abnormally large number of homes are listed on your street and in the immediate area. This may signal to a buyer that something is wrong at the least there will be more competition.
- Natural disaster in the area.
- Abnormal insurance rates.
- The area is prone to flooding.
- Property tax rates are higher than other areas. In California there is a “Mello-Roos” tax that increases property taxes as much as double that of other homes.
Well enough for “headwinds”. Any of the items above can be overcome by a talented agent. It’s just that your expectations for the selling price or how long you are willing to wait must be weighed against the obstacles that have to be overcome.
Headwinds can be overcome with experience
Overcoming obstacles comes with experience. Be sure that you interview prospective agents for their ability to overcome your particular “headwind”. Have they encountered this issue before?
One of your agent’s responsibilities to your is to discuss in detail how they arrived at the recommended price range for your home. That talented person will not just tell you what they think you want to hear but what you need to hear. Remember that your agent is going to make an immediate investment in your and they expect a return.
I have been in discussions with friends who had their homes for sale. After three weeks there were no showings. So the conversation came around to “let’s fire the agent”. This is a common discussion. To avoid being involved with your spouse, partner, or friend about your agent, head this off at the start.
Do not walk away from your initial meeting without discussing your expectations
Do not walk away from your initial meeting what your agent without discussing your expectations. Your real expectations. Perhaps you felt intimidated by the agent during your meeting and failed to speak up. The biggest mistake in my opinion is the failure on the part of this new team of sellers and agents to clearly express their expectations about your property. Get it out in the open.
If I were an agent, and for example, your home was a mess. I would tell you, “you need to clean your home”. Why dance around the elephant in the room. Be clear with your agent. If you believe your house should sell in one month, tell your agent. This may mean an adjustment in the proposed selling price but at least you would know. Or the agent will tell you that in November the days on market are running at 45 and your one month is unrealistic even with a lower than market price.
Your agent will communicate with you frequently
Your agent will communicate with you frequently. At least a good agent will. If you get anxious, call your agent. It’s a two-way street as mentioned at the beginning. If another agent brings a buyer over, call your agent and relate the information.
On the subject of a prospective buyer viewing your home. Make your home available. If you have worked out an arrangement for a call in advance from your agent, be available. Be sure the buyers can get into your home. Remember, the selling agent may be showing several homes, if yours is not available they may find another.
Vacate your home if a buyer wants to see it
There are no rules on this but I recommend that you vacate your home if someone comes over to see it. If you are at home, walk into the yard or take a walk down the street. Allow the prospective buyer to see your home and permit them to talk honestly without your presence. If possible speak alone with their agent and offer any important items that the agent may not be aware of e.g. the new park or you just installed a new air conditioning unit last week.
This article could go another thousand words from what I have experienced alone. It’s time to cover the top of commission, perhaps the most sensitive discussion just behind the fact that your dead pets buried in the yard may be a turn-off to someone. There is no truth to the rumor that an 8% commission is standard everywhere. This is of course a bit of humor.
No truth to the rumor that 8% is the standard commission
State laws forbid real estate brokers and agents from various agencies from setting a “market” price. The fact that nearly everyone wants to start at 6-7% is due to the information widely available on the internet. Brokers want to know what others are getting and that’s natural. It’s also natural to get as much as you can for your time and expenses.
Why would anyone undersell their value for no good reason? Just as you can choose any agent you want to represent you, you are also free to negotiate the commission. It’s helpful to know a bit about how this commission process works.
Start with a 6% commission as an example (an even number). When a buyer decides to purchase your home, they will come to your agent with enough money to pay you what you ask plus their portion of the closing costs. From the amount you received for your home, the Escrow company will deduct the agreed-upon commission, in this case, 6%.
The selling broker and listing broker split the commission, the split must be negotiated between the brokers. This split is usually 50/50. So your real estate agent’s broker receives 3% of the selling price.
Brokers must supervised and provide services to agents
Brokers must provide services to agents which vary from broker to broker. Some provide a desk at an office, others buy coffee. Regardless, there are costs to supporting agents even when the agent is not an employee per se. Liability and business insurance are big costs along with advertising including signs. Brokers must spend money and time every year taking continuing education. So we have established that the broker must be compensated for making the agent available to you.
Consider the investment your agent is making in you
About your agent. as a result of their efforts to sell your home they have incurred costs including the cost of their vehicle, phone, internet, office, advertising for you, signs, time to show you around and meet with other agents, and much more. Therefore, your agent deserves enough to cover all costs and earn a profit.
Not all agents are equally experienced, but!
The above are just sample scenarios for you to consider when you are negotiating with an agent for the commission. Some agents will charge you a lower commission than others. Just as experience is not the same with all agents, their rates are not either. Every agent started as a new agent. The fact that they have never listed a home before yours does not make them incapable of rendering excellent service. I would argue that some new agents may try harder as with any new job.
Many of the “how-to” websites out there including Dave Ramsey tout the best in the business. Real estate agents work hard and invest their time and money (time is money as well) and can obtain the same result as an agent working for many years. It’s all about the person. I know agents that have been around for decades that are excellent communicators and I know agents that are terrible and who should know better. Make your choice based upon “ability” as a very important factor.
Negotiate in good faith
Negotiate in good faith. Remember that initial discussion where you talk about your expectations. This discussion is where you determine if you will hire the prospective agent or not. The good ones will work for every cent of their commission.
Your agent is in effect your partner. Remember, they will be investing in you and want what is best for you. In effect, they are your employee as well. Communicate often and cooperate with showings. In the end, your home will sell. Visit Logan-Anderson, Gulf Coastal Realtors website for more information.
When I originally wrote this, I was a real estate investor for many years. I have since become a real estate broker on the Mississippi Gulf Coast have moved from California. Now do I not only provide information as this blog does but I help people from around the country find their ideal retirement area or location for a vacation home.
Please read similar articles on this website and at Logan-Anderson, Gulf Coastal Realtors.
If you are considering a move to a more exciting and beautiful beach area, you should read a couple of our most popular articles. “Why you need to retire on the Mississippi Gulf Coast” and “Why I decided to retire on the Mississippi Gulf Coast”
As always your comments are most welcome. Thank you for stopping by.
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