When you are looking at putting a property on the market, the decision that will likely have the biggest impact on your net financial outcome, and peace of mind, is your choice of agent. It’s important to know what’s important when making this choice.
Agents will most likely talk about several topics when “applying for the job” of handling the sale on your behalf, including some of these:
- Marketing and advertising.
- Their opinion of the price of your property.
- Their professional fees for services.
- Extra expenses, payable whether or not your property sells.
- Evidence of many past happy clients (sellers who’ve sold)
- Their negotiation skills and qualifications.
- YOU, your situation/preferences/needs – and how the agent’s suggested strategy will benefit you (as opposed to them)
Typically, and almost unbelievably, many agents will proportionately spend the bulk of their time talking about the items in the top half of this list.
The bottom 2 items are the most important.
The sale of a property is a big-ticket transaction for anyone. Your sale should be all about you. YOU are the most important person in your property sale. Ask yourself, is what this agent presents to me putting me first?
For example, if you have marketing expenses that are payable even if you don’t sell, yet the agency benefits from the exposure of their brand, is this primarily benefiting you, or the agent? Are photos of the salesperson, on the signboard that you pay for, serving the purpose of promoting your home, or the agent? Are set, restricted time open inspections where the agent can group all buyers together and show the home at one time but not be able to actually dedicate any time to these purchasers, really benefiting you as a seller, or simply easier for the agent – as opposed to flexible inspections any day/time of the week to suit you and the buyers whereby the agent has time to ask questions and really sell the benefits of your property to the prospective buyers?
Sure, marketing is important, as is presenting your property to the marketplace in a favourable light. But marketing is so much more than just advertising. A major rule in marketing is to make it easy for the customer to buy, so important elements in marketing are things like having an agency that is available when the buyers are available – ie 7 days a week, and after 5pm on weekdays. Other important marketing requirements are prominent signage, the office being able to prove they have detailed buyer records, and a reliable system for attracting and handling enquiries. You’d be amazed how many enquiries are not responded to, despite the amount of sellers’ money spent in attracting the enquiries in the first place! These days pretty much everybody has access to the internet, so as long as the agency has an active, mobile-friendly site, and the properties are on the major online portals – together with the above points, buyers will be attracted – provided the property is priced correctly to attract enquiry.
But once a buyer is attracted, the BIGGEST AND MOST IMPORTANT thing you want in your agent is that they can prove they are a SKILLED NEGOTIATOR. Have they studied negotiation? Have they read books on negotiation? Attended courses on negotiation? Trained on negotiation within their office? Do they have records PROVING that they are a good negotiator? How do you find out? ASK THEM!
Then see if you are impressed with the answers. While you’re at it, ask them how they will answer the questions that buyers WILL ask them, such as “what’s the lowest they’ll take?” Or “why are they selling”, or how they will get a buyer up from where they first offer, to their HIGHEST PRICE. Hint: they should have more negotiation tools in their kit than the offer / counter-offer method.
A good negotiator can be worth as much as 10 percent extra on your sale price, and it is well worth investing in one. They might not necessarily have the lowest fee, but choosing the cheapest agent is often false economy, and the saying “Good things are never cheap, cheap things are never good” very often rings true in real estate.
A local home owner recently told me about when they bought their property. It was on the market at $375,000 and when they walked in they fell in love with it and would have happily paid the asking price. They asked the agent why the sellers were selling, to which the agent replied with words to the effect of: “They are separating. I reckon you’ll be able to get it cheap”. Their subsequent offer of $332,000 was accepted, which was a great win for them, not so much for the poor sellers whose agent (clearly not a skilled negotiator, nor working in the sellers’ interests, or both) cost them $43,000 plus whatever their commission was!
I have found that most sellers want 3 things when choosing an agent:
- The highest price
- The best service
- The cheapest fee
The reality is, however, that you can’t have all 3. You can generally pick 2 from the list. However, as long as the agent provides a guaranteed risk-free service whereby there is no way you can be out of pocket, it is worth investing in a fair fee as long as you receive excellent service and the highest price – which will mean more money net in your pocket at the conclusion of the transaction.
With regards to the agent’s “QUOTED” price for your property, it is not a “quote” in the sense of how a tradesman gives you a quote. It is an opinion, and it has no bearing on the actual sale price of your property. In fact, there is often an incentive for the agent to over-quote (ie knowingly mislead you) in order to win the business ahead of other (honest) agents. They then still get paid their full commission even if their “quote” is wrong.
Choose skill, not opinions.
Article by Lucas Wilson