When it’s time to sell your property, how do you go about choosing a real estate agent? I’m sure there won’t be any problem in locating the nearest real estate agent!
Heck, that’s the easy part!
After all, you see real estate agent signage’s in every town, every neighborhood, and pretty much on every street corner! However, deciding on choosing which real estate agent is something completely different!
Will he do a successful job of selling your property for the highest price, in the shortest period of time, and the least amount of inconvenience to you?
Most of us don’t normally get exposed to real estate agents too often, other than a few times in our lifetime. Therefore, choosing a real estate agent might not be the most straightforward decision to make, wouldn’t you agree? Yet, a vital part of the marketing process of your home is actually the selection of the right real estate agent!
In other words, choosing the wrong real estate agent will undoubtedly lead to financial & emotional headaches ahead! When choosing a real estate agent, there are a number of major home seller mistakes to avoid, and I have lined them up for you:
Mistake 1: Choosing a Real Estate Agent Who Offers The Lowest Commission (Of course I can work for 2% Commission)
Now that you’ve decided to sell your home, your next step will be to interview a number of real estate agents. There are many agents out there who will undercut the competition by seriously lowering their commission, in an attempt to win the listing mandate!
“As a home seller, I’m saving money already, so why is that a bad thing?” you say.
Well, there are a few ways of looking at it:
Reduced commission means reduced marketing resources available to assist in getting your home sold. The potential marketing tools that agent suggested he’ll be using, will be substantially less than what a full commission agent could offer as part of his marketing strategy of your property.
Before signing up with the real estate agent who’s offering the lowest commission, please read the above again.
Mistake 2: Choosing a Real Estate Agent Who Gives You The Highest Listing Price
Now that you’ve decided to go on the market with your (overpriced) property, odds are quite high that you will eventually sell your home at a price below the going market price.
One can truly not emphasize enough the importance of starting one’s marketing process with the correct asking price! The first 3-to-4 weeks of marketing are crucial and if the asking price is too high, unfortunately, potential home buyers will simply not even consider your listing. Never mind taking the time to go view it!
And, to be honest, why would they? The property is out of their price range anyway!
Or worse, a lot of real estate agents might even use your overpriced property to bounce their educated home buyers off to more correctly priced properties – “Now that we’ve seen what R 900,000 gets you here, wait until I show you the next home which is marketed at exactly the same price. You’ll be blown away by the high finishes and many extra features!”
Is that how you want agents and buyers to do when they’re viewing your home? I didn’t think so either!
Regardless how you look at it, the end result will be that the overpriced property will sit on the market for a much longer time. And it will eventually sell at a much lower price than would have been achieved if only it was priced correctly from the start!
Now, let’s assume there’s actually this one buyer who decides to put in an offer!
Another unfortunate risk you’ll run with selling an overpriced property is that the banks will have trouble finding value during their appraisal (Property Evaluation), thereby limiting the finance amount for the buyer. And, unless there is a bigger deposit to make up the difference, the deal is likely to fall through.
All this effort, time, stress and living in hope, just to see it all go to waste! Being a home seller, you only have one chance to make a first impression!
And, sure, while one might be tempted to be choosing the real estate agent who suggested marketing your property at a higher price, please make sure to ask for proof of how that price was determined by means of a Comparable Market Analysis. Check with the agent what is currently on the market with similar features as your property. Having a look at the recent sales of similar homes in your area will give you, as the homeowner, a more realistic expectation regarding the likely sale price of your property. Plus, it will immediately set the agent straight regarding the listing price he put forward.
Mistake 3: Choosing a Real Estate Agent Who Sold The Most Properties
I admit that this one might be somewhat counterintuitive! One might be tempted to use the total number of properties sold as the sole measuring stick in choosing a real estate agent. While the agent who only manages to sell a couple of properties last year, might not be your direct choice, the agent selling 50 properties in a given year should not immediately be the first choice either.
“Why?” you ask.
Bear with me: per Mistake 2 above, we now realize that the real estate agent who gives the highest listing price is probably going to get a lot of the listings. Yet, it will become very evident that those overpriced properties aren’t selling (no kidding!) and will likely remain on the agent’s books for longer periods of time. In other words, the number of properties that agent eventually sells versus the properties that he still has on the books will be quite low.
In real estate terms, they refer to it as the sales-to-listing ratio.
Who do you think to be the better agent: the real estate agent who sells 13 out of 15 listings or the agent who sells 20 out of 50 listings?!
Do yourself a favor and don’t go looking for the real estate agent who sold the most properties!
Rather have a look at how well the agent priced the property, how he suggested going about the marketing strategy, how his reactions were when you attempted to reduce his commission (ie test his negotiation skills) and of course, how his overall presentation and communication report was. These skills will be very important when it comes to buyer negotiations! Is the real estate agent’s overall service equivalent to the high sales figures?
Mistake 4: Choosing a Real Estate Agent Because He’s Family
Selling your house is very serious business.
Most real estate agents will agree that there’s no one sales contract the same! Every client has his/her specific requirements, needs, wants & wishes and all of this needs to be properly documented by both buyer and seller agents. Therefore, it is very important that not only during negotiation but also at the time of closing, that legally, everything is correctly worded.
You might be uncle Jack or cousin Marie’s favorite, but when it’s time to dive into some intense negotiation sessions, and subsequent legal paperwork, if things were not to work out with the buyer(s), it might be tough to split the personal from the business angle of the property sale!
Will you or your relative be able to look past whatever may have gone wrong during the home selling process if the experience wasn’t the greatest?
Mistake 5: Choosing a Real Estate Agent Who’s Working Part-Time
Why do you think there’s such a high turnover of real estate agents? Any 3rd party might look at their local real estate agent and believe he’s got a cushy life, driving around town all day with these buyers, doing a couple of seller presentations and signing the big sales contracts.
Selling real estate really can’t be that difficult, now can it?
Well, the question needs to be asked whether the real estate agent is doing this part-time or is full-time involved in the real estate business. Let’s be serious: how could a part-time real estate agent possibly be flexible enough doing all these buyer viewings? And if he’s doing it part-time, how long will it take before clients get a response back to their inquiries? Or worse, how quickly will the agent be able to show those clients the property? What will be the timing of the marketing of the property? After hours? Weekends? Finally, where do you as the home seller fit into this schedule?
Overall, the work that is involved in managing the listing, marketing it, giving it the much-needed exposure, writing offers, and finally, selling it & bringing it to a successful close, demands the attention of a full-time real estate agent!
You did perhaps not realize how many mistakes a home seller can make when choosing a real estate agent, and how easily it can sometimes be to be making them! If there’s one thing I would like you to take away from this article, it definitely should be to avoid THE biggest home seller mistake of overpricing your property.
As you may slip through the cracks with the other home seller mistakes when choosing a real estate agent and not necessarily experience a professional home selling service, in the end, at the right price, at least your property will be sold!
Please apply the above information to avoid home seller mistakes when choosing a real estate agent! Who knows, it might result in, not only in saving you thousands of Rands, but also avoid unnecessary emotional drama!
Thinking of buying or selling a home? I have a passion for Real Estate and love to share my expertise!
Little Falls, Wilgeheuwel & Surrounding Area Agent
Work Phone: 011 795 1032
Mobile: 079 047 5172
“I can guarantee my services and marketing plan. If the right buyer is in the market, my marketing efforts will find him.”