Hiring a Real Estate Agent
(A continuation of How
to Sell a House)
By Steve Gillman - 2006
We finish our look at hiring a real estate agent with some
more clues for choosing the best and avoiding the worst. You'll
also find some more "secrets" of the business that
are not widely known.
Prices Should Be In Advertisements
Have you seen the ads in the paper for homes for sale that
don't have prices? What do you do? Sometimes I may call, but
there are so many homes to look at that I often just skip over
these ones. Maybe you have done the same. So how did leaving
the price out help the seller? It didn't.
If the price was there, callers would already be somewhat
prequalified to buy your home, since they often know what they
can afford. Of course those who are looking for less expensive
homes wouldn't call, which is what you would want if you were
selling it on your own. Why waste your time, right? And why risk
losing a sale to people like me who skip over unpriced homes?
Again, this is a prospecting tool. For the agent, it is good
to have people call out of curiosity. When they find that the
home isn't right for them, the agent can steer them to another
listing that he can make money on. When that buyer looking for
a $100,000 home calls on your $300,000 home, the agent isn't
going to somehow make him able to afford your home.
Agents have enough ways to get buyers for their other properties.
When hiring a real estate agent and coming to an understanding
about the service he or she will provide, insist that ads for
your home have the price listed. The agent may think you are
being picky, and some really believe this is a good way to market
your home. Insist on the price being there anyhow.
There Are Few "Normal" Procedures
Agents often let you assume things. They want to get the sale
closed, and will let you believe what you have to in order to
do that. They might tell you that the seller usually pays the
closing fee, for example, or just let you assume that. They may
lead you to believe that you have to pay for title insurance
for the buyer.
Very little is set in stone in real estate. I have seen the
buyer or the seller pay for the title policy, or the entire closing
fee. It may be a good idea to pay for these things, to keep the
buyer's cash needs low and get a higher price for your home.
On the other hand, if you want to counter a buyers offer with
your own, and include the clause, "Buyer to pay the closing
fee," that is your right.
The Commission Can Be Changed
They'll tell you that they can't change the commission after
it has been set. This isn't true. I have seen real estate brokers
knock $4,000 off the commission to get a sale closed at a lower
price. They don't like the idea of negotiating the commission
after the fact, but it happens.
What is true, is that if your agent brings you a full-price
cash offer for your home, you owe the commission as set in the
listing contract. What if, on the other hand, your agent brings
you an offer for much less than what he said he could sell your
home for? You can always say no, or you can say it works for
you if the commission is cut by $2,000. The agent can always
say no to that.
I am not suggesting cheating the agent out of his commission
after all his hard work. In the case above where $4,000 was taken
off the commission, though, I was one of the four parties involved
(2 agents, 2 brokers) who took $1,000 less, and I was happy to
do so. Sometimes you want to get paid something for all that
effort, even if it is a bit less than expected. No sale means
no commission, so if a discount would make the sale work for
you, at least suggest it.
Real Estate Agents Are Not All Experts
The first time I made an offer on a house, the agent didn't
understand what I meant when I told him that I wanted to get
a 90% first mortgage and have the seller carry a second for 5%,
so I could get in with only 5% down. Years into his career, he
still had only dealt with deals that had regular bank mortgages.
Often agents will be very knowledgeable about a certain type
of real estate, or a certain neighborhood, but know little else.
Like other professionals, they specialize. If you really need
help finding a particular type of property, look through listings
online until you find an agent that already has several of that
type listed. Then ask all the questions listed above.
Ask the questions and look for the clues indicated, but trust
your intuition as well when hiring a real estate agent. If you
don't feel comfortable with an agent, it's possible potential
buyers won't either.
Now, whether or not you are using an agent you need to get
the home ready, so read on...
The book continues here: Preparing
a Home for Sale - What you need for good first impressions.