One of the biggest mistakes home sellers make when choosing a listing agent is selecting an agent solely based on two factors—the lowest commission and the highest listing price for your home.
It is true that sellers want the highest possible price for their property and pay the lowest commission. While those two criteria are somewhat significant, they often have very little to do with hiring a skilled agent, and in many instances, they prove to be completely irrelevant. Below, you will find why.
Should You Consider the Highest List Price?
While agents can give you a rough idea of how much your home will sell for, they won’t be able to tell you the exact price. To say that they can is probably a fallacy.
A real estate agent can show you pending sales, active sales, and comparable sales in an area, but you as the seller will choose the sales price, and your buyer will tell you if the price is right.
Additionally, an agent will also be able to suggest the list price that will attract buyers. Nonetheless, where it goes from there will typically depend on the buyer.
Though choosing a listing price feels quite intimidating initially, statistics prove otherwise. In 2019, home sellers received 99 percent of their asking price, and their properties sold within three weeks. This proves that with a little bit of research and the right real estate agent, choosing a proper listing price will be a walk in the garden.
Here are a few things you should keep in mind when real estate agent hunting.
- As agents can’t guarantee the price your home will sell for, the real estate agent who suggests the highest price could be untruthful. To be on the safer side, ask your agent to show you numbers that support the suggested asking price. If the agent has no stats or data of the home sales located in the neighborhood, it could mean a red flag.
- Instead of a specific price, look for real estate agents who will give you’re a range of prices. Depending on various factors like the temperature of the market, the location, and improvements in the home, a competent realtor will be able to give you a price range.
Pricing is part art and part science. If your home isn’t priced right, you are most likely to get fewer offers. In case it’s priced too high, you might not get any showings at all. Eventually, you will end up having to reduce the price, keeping buyers guessing what’s wrong with your house.
Should You Choose an Agent Only Based on Commission?
All real estate agents are unique in their own ways. Each agent has his/her own advertising budget and marketing techniques they will use to get you a lot of offers.
A real estate agent with a large advertising budget can help you gain greater exposure to a large number of prospective buyers. This is often ideal as you reach a significant number of potential buyers, meaning greater chances of getting a good offer. However, such agents will charge a higher commission.
On the other hand, a few agents would willingly work for charges less than their competitors, and there’s always a reason for this.
Sometimes, it might be the agent’s only way to succeed in the highly competitive business—their business may not be able to stand apart from the competition in terms of knowledge, service, or negotiation skills.
If the only benefit a real estate agent can bring to the table is cheap fees, it’s time you ask yourself why. Is the agent unskilled or desperate for business?
Nevertheless, full-service agents do negotiate a lower commission under special circumstances, as listed below.
- You don’t have sufficient equity to pay a full commission.
- You promise to refer more business to the real estate agent.
- You are selling multiple homes at once.
- You are buying and selling a home at the same time—giving both transactions to a single agent.
- You are doing all of the legwork, marketing, advertising, and paying for all expenses related to the sale.
When interviewing multiple agents who offer similar services, look at the track record of each agent’s original asking price and final sale numbers.
The chances are that the agent charging the lowest fee will depict more price reductions and more days on market (DOM).
What Are the Qualities and Characteristics of a Good Real Estate Agent?
When you hire a real estate agent, know that you will be in a relationship with them for a couple of months or longer.
So, it is crucial you choose an agent you feel comfortable with and can relate to. Here are a few characteristics of a competent real estate agent.
- Experience – You should hire an agent who has sold many homes in the past and has learned from his/her mistakes.
- Education – When it comes to skills, ask about the agent’s degrees and certifications.
- Honesty – Trust your intuitions with this characteristic. Make sure you are working with a sincere agent.
- Networking – This is what dedicated real estate agents do. Most of the homes sell fast because agents have contacted other agents in their connections in search of potential buyers.
- Negotiation Skills – Your agent should be an aggressive negotiator and not someone who would make a quick sale at your expense.
- Effective Communication – According to sellers, communication and availability are the essential characteristics of the right agent. After all, you would want your agent to be available to solve your queries and concerns always.
Always ask potential agents for hard facts like sales prices, time on the market, etc. This will help you get an idea of how confident and well-performing an agent is.
Lastly, ask the real estate agents for a personal guarantee. If your agent won’t guarantee performance and release your property from the listing upon request, know that you are setting yourself up for trouble. Don’t hire the agent and continue your search for the right real estate agent.
Have Questions? Ask Kami!
Give Kami Gerald a call to learn more about local areas, discuss selling a house, or tour available homes for sale.