Finding the right real estate agent to list a home can be a lot like finding a life partner - pick the right one and the experience can be positive. Choose the wrong agent and the experience can lead to months of frustration and an unsold house.
Ted Baker recently sold his mother's house and shares the trials and tribulations from his experience. Tony Joe, a real estate agent with Re/Max Camosun Oak Bay, was the listing agent and shares his insight on today's changing market.
For some people it's not difficult to choose a real estate agent - they pick one based on personal recommendation from friends and family. According to a report by the National Association of Realtors, more than half of home buyers found their agent this way.
"People typically go with people they know," says Joe, who has been selling for 20 years. "For the consumer's standpoint its all about networking. Unlike other areas of sales, real estate agents have access to the same inventory pool. What sets them apart is their level of experience, professionalism, knowledge and . marketing or negotiation style."
He says that more than 90 per cent of his business is from referrals, compared with the industry average of 50 per cent.
"Personality has a lot to do with it," says Baker, who used to do renovation work on homes. "One needs to be able to rely on the capability of the agent to get the job done."
To help you select an agent with the right skills, testimonials, experience, competence and reliability, here are a few pointers.
Information is power. Baker suggest people get an independent appraisal - which costs about $125 - to get an independent third-party evaluation of the property.
A pre-sale home inspection is also useful to identify and correct potential problems in a house. A buyer will likely uncover the same issue when they get the house inspected as a condition of the sale.
BEWARE OF AN AGENT TRYING TO BUY A LISTING
In order to secure a listing, some agents will purposely overvalue a home. They tell potential clients they can get more for a house than other agents.
Because the inflated house is more expensive than comparable homes, it will linger on the market until the price is lowered.
"Ask the real estate agent to justify the price," says Baker. "Ask to see listings of homes for sale in the last three to four months for comparison."
INTERVIEW PROSPECTIVE REALTORS
Increasingly people interview a number of agents to determine if the "chemistry" works.
"Ask about productivity," says Joe. "Real estate is a complicated process. Find out about the agent's knowledge and experience."
ASK ABOUT EXPECTATIONS
"When I interviewed different agents, I asked them 'What are you going to do for me?' " says Baker. Some agents have a detailed written plan about how they will advertise and market a property.
ASK FOR RECOMMENDATIONS
Any agent who has been selling for a while should have a list of happy customers. Many people would trust a recommendation by a friend or family member. As a last resort, a person can review a real estate agent's qualifications by viewing their website.
ASK ABOUT COMMISSIONS
Real estate agents can be flexible as to the commission structure. Most charge six or seven per cent on the first $100,000 and three per cent on the balance. Some have a flat percentage of the total price. On a $500,000 house, with the above 7/3 calculation, a seller would pay the agent $19,000. Finding an agent who will sell for less will obviously affect the bottom line.
"The only question I regretted not asking was if the agent would reduce his commission if the house sold within 30 days," says Baker. "Because there would be less work involved - fewer open houses, fewer showings - shouldn't the cost of selling also go down?"
Also, when an offer is tendered and the parties are slightly apart, it is appropriate to ask if the agent is willing to forgo a portion of their commission in order to secure the sale.
FIND OUT IF THE AGENT IS GENEROUS TO OTHER AGENTS
One of the reasons a person lists a home with a real estate agent and the professional listing service is because he wants other real estate agents showing the home to their clients.
A listing agent who is generous in sharing the potential commission with others typically gets more house viewings.
"Not all agents work well with others," says Joe.
FIND OUT HOW MANY OTHER LISTINGS AN AGENT HAS
"An agent with 50 listings is spread out too thin," says Baker. "There's no way an agent with that many listings can put time into a sale."
He is more comfortable listing with an agent who has, at most, 10 listings to service.
FIND THE MARKET THE AGENT IS TARGETING
It is important that the agent chosen has experience both in the property type and price range. If he primarily sells luxury houses, he is not likely going to have many buyers looking for an entry-level condominium, for example.
FIND AN AGENT WHO KNOWS THE REGIONAL MARKET
Baker says he recommends finding an agent who works within 15 kilometres of the listed home. "He will know the area and he will know the market better."
Here are a number of interview questions that people have posed to Tony Joe in his career:
How long have you been selling real estate full time?
How many transactions have you been involved with in your entire career?
How many transactions did you handle in the last calendar year?
How many transactions have you handled year-to-date?
Have you ever been subject of a disciplinary action?
Are you a listing agent or a buyer's agent?
If both, what is your percentage of listing sales to buyer sales?
Do you have a list of references to call and a list of testimonials? Can you have another professional real estate agent vouch for your business practices and integrity?
What price range do you generally work in?
Do you dual represent or "double end"?
Do you have a network of other productive agents from other firms which you work with?
Do you attend training and technical update seminars above and beyond the local minimum standards?
What would you say are your strongest attributes as an agent?
For people looking to buy a home
Are you experienced in multiple offer scenarios?
Do you have contacts in the mortgage business?
Is your negotiation style collaborative or confrontational?
Can you recommend building inspectors who will be critical and prepared to fail a house on inspection?
What is your after-sale support program?
For people looking to sell
What is your success rate (listings taken to sold)?
What is your list price to sell price ratio?
What is your average days on market?
What is your advertising strategy? Do you have a marketing plan?
Do you provide feedback from agents?
Tell me about a recent complicated transaction for which you found the solution.
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