10 questions to ask a real-estate agent
If you're trying to sell a house, the right help is crucial. Here are the questions you should ask to hire the right professional.
Imagine spending $9,000 for a service, then finding out you could have had the same thing for $350? That's exactly the kind of money you could waste if you hire the wrong real estate agent to sell your house.
The way many people find a real estate agent is through a personal relationship. That's no way to hire a pro.
Watch the following video, then meet me on the other side for more.
When I sold a home in Cincinnati years ago, I listed it with an agent whose primary qualification was that she was a personal friend. She initially told us the house should be listed for $300,000. But after finding no interested buyers, several weeks later she suggested we drop the price to $275,000. While we did get some showings, still no bites.
Here's how our house sold: A person happened to be driving by, saw the sign in the front yard, knocked on our door, walked around the house and immediately fell in love with it. She made an offer the next day.
Despite the fact that our buyer didn't find the house through either her agent or ours, we still had to pay 6% of the sales price -- in our case, $16,500 -- to the real estate agents. That's a lot to spend when the sale of our home came from a $20 sign in the front yard.
I've been a vocal critic of real estate agents for many years. It's not because their services aren't useful; they often are. The problem is that their services too often aren't worth the high price.
List it yourself
In days past, only a full-service, full-price real estate agency could put your home in the Multiple Listing Service. These days, you can find any number of real estate companies that will put your home in the MLS for a one-time up-front fee of as little as $350. (Here's one of many examples.)
So, rather than paying the full 6%, you could simply pay $350 to $500 to list your house in the MLS, thus exposing it to buyers and their agents. When a buyer shows up through an agent, you'll still have to pay the buyer's agent 3%. But paying 3% rather than 6% to sell a $300,000 home means saving $9,000. That's a nice chunk of change.
Most people, however, don't want to handle the marketing of their house themselves. They feel that it's important to have an experienced professional on their team to help with the paperwork and show and market the house.
Finding and interviewing agents
Here's a quick tutorial to make sure that, if you pay big bucks to sell your house, you have a good shot at getting your money's worth.
Once you've got three to five names, schedule interviews at your house. When they show up, they'll (hopefully) come armed with a basic market value for your home that they've put together in advance with recent neighborhood sales statistics. More than likely, they'll walk around your place and sharpen that number by considering your home's unique features and/or problems.
Note: Be suspicious if one agent suggests a listing price much higher than the others. This is a common technique to secure a listing -- telling you your $300,000 house is actually worth $340,000 -- but listing your house for more than it's worth won't sell it.
Questions to ask
When interviewing agents, ask the same questions in the same order and take detailed notes of the responses. That makes apples-to-apples comparisons much easier.
What is your average list price-to-sales price ratio? You want to avoid an agent who attempts to secure a listing by deliberately overstating the value of your house. The way to uncover that tactic, as well as gauge the overall effectiveness of the agent, is to ask for his or her average days-on-market and list-to-sales price ratio. To verify those numbers, get a list of houses they've sold in the last year.
Be aware, however, that the easiest way to sell a house immediately and for 100% of the listing price is to sell it for less than it's worth. That's why it's crucial for you to visit as many houses as possible currently for sale in your neighborhood. If an agent thinks your house is worth way less than you do, ask why.
Example: When I sold my father's house, the buyer and I were $500 apart and at an impasse. So I asked both the buyer's and listing agent to contribute $250 each from their commission so we could get a deal done. They both readily agreed.
Will you let me out early if I'm not happy? A good agent will let you out of the agreement if you're unhappy with the agent's work.
Approach these meetings as if they're a job interview, because that's exactly what they are. You're about to pay someone a great deal of money entirely for their marketing expertise, so stay focused on that. Keep in mind that these are salespeople with experience in controlling the conversation. Don't allow it. You're the employer, they're the hopeful applicant.
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