I lost! A listing, that is….from a friend no less! How did I let that happen?? Because they say that I’m too close to them – and that’s OK with me. They are indeed friends and sometimes it’s best not to do business with a friend. It doesn’t happen often, but sometimes things don’t go exactly the way we’d like them to in a real estate transaction. No need to harm a friendship over it. What does bother me though, is who they chose to sell their home. They chose a part-time agent who offered a low commission rate to get the listing. They did that because I failed to educate them. Yep. So what’s wrong with a part-time agent and getting a low commission? Several things. For one, a part-time agent doesn’t have the time to properly market a home or to deal with showings and offers when they’re busy spending most of their time at another job. They often won’t spend the money to get professional photos (this one didn’t). They often don’t do enough transactions to keep up with the latest forms and law/rule changes. No doubt the part-time agents of the world will send me hate mail when they read this! OK, I’ll concede that there are a few good part-time agents. As for the low commission, other agents see the lower commission that’s being offered to them for bringing in a buyer and, people being people, they’ll often choose to show homes that offer a higher commission payout. Yes they do. So what’s the result: the home sits on the market longer, costing the sellers much more than what they’re saving with the lower commission. After all, the commission rate is meaningless if the home doesn’t sell. An agent can offer a 1% commission or a 30% commission, but if the home doesn’t sell the actual rate is ZERO in both cases. It’s better to go with a great agent, even at a higher commission, to get the job done.
So, if you’re in the market for an agent, here are the top five things you should ask any potential agent:
1. Are they a Realtor?
Not all real estate agents are Realtors. In order to be called a Realtor, they must be a member of the National Association of Realtors. Realtors are required to adhere to a very strict code of ethics. Agents who are not Realtors do not. Of course they must follow the laws of the state, but they aren’t bound by the strict code of ethics.
2. Are they full-time?
Real estate transactions are chock full of pitfalls. Purchase agreements can run somewhere around 40 or so pages, at least in Minnesota – and every bit of it is a legal contract. Full time agents are most likely to be able to help you avoid those pitfalls. Full time agents have the time to market and show your home. Since they don’t have another job, they’re depending on their income as a Realtor, therefore they’re far more likely to work harder to do a better job of selling your home.
3. Do they hire a professional real estate photographer?
A great agent will always, always, always pay for a professional real estate photographer – not just a pro photographer, but a pro real estate photographer. And yes, there’s a difference. Taking great photos of the inside of a house is quite different from most other types of photography. You need someone who knows how to do it. Great photos are one of the most important things to have for selling your home. The first place most buyers look for a home is on the internet. If your pictures aren’t good, they’ll often bypass your home altogether.
4. What will they do to market your home?
Some agents use the 3P process: Put a sign in the yard, Put it in MLS (multiple listing service), and Pray. A great agent will spend money to have pro photos/videos and marketing brochures made, will advertise it in local media, will hold public open houses, will hold broker open houses to get agents in from all companies, will network with other agents, will pay to send out ‘just listed’ cards to the neighbors, will utilize social media to spread the word about your house, etc, etc, etc. Always ask what they’re going to do to market your home.
5. How much market share does their company have?
Any company that you choose to list with has somewhat of a chance to sell your home. However, the company that dominates the market in your area has a better chance. Why? Because they typically have more agents, which means they’re working with more buyers that are looking in your area. More buyers mean a better chance of selling your home. Their agents also normally know more about the area and therefore have a better chance of convincing a buyer that they should buy your home.
Well lookee here, there seems to be a very important question missing from the top 5!!! There’s not a single mention of COMMISSION. How could that be? That’s often one of the first things a seller wants to know about. Well, we’ve already talked about that, in the opening paragraph. Low commissions often equate to lesser service, longer selling times, and lower selling prices. After all, the only thing you, as a seller, are really concerned about is the bottom line – how much $$$ you’re going to have in your pocket after closing. Does it matter if you pay a higher commission if you NET more money? Nope. Does it matter if you can tell your friends that you got a great deal by listing your home at a low rate if it never sells? Nope. It comes down to this: would you rather be able to brag about listing your home at a low commission or would you rather get it sold and end up with more money in your pocket? As with anything else, you usually get what you pay for!
That’s it for now. As always: I love what I do, I’m great at what I do, and I love to help. If you have any questions, I’m here just for you!