Choosing a listing agent is probably the most important decision you’ll make when you are selling your house. Below is a guide to some questions that will help you make an educated choice.
What’s your experience in this area/price range over what time period?
You want to feel comfortable that the agent has experience in your neighborhood with homes in a similar price point and most sellers look for agents who have “been around the block” and are not brand new in the business. That said, just being “new” doesn’t mean an agent won’t do a great job. Some people argue that those agents are less jaded, have fewer clients to compete for their attention and are hungry to prove themselves in order to grow their businesses. On the other hand, there’s simply no substitute for experience, as far as learning goes. So ask this question with an ear tuned to what matters most to you.
Statistics of your track record–what is your average days on market and sale/listing price ratio?
Some agents have these numbers at their fingertips, though many don’t. For some sellers, working with an agent who keeps track of statistics is important and the prospective agent’s ability to answer the question might, alone, be telling. The majority of sellers, though, don’t necessarily fall into that category. They do, though, in general, want to have an idea of how long an agent’s listings normally take to sell and how accurate a reflection of market value their pricing is. So it’s a good question to ask. It can reflect an agent’s inability to read the market well and evaluate a property’s value. A low ratio can also indicate an agent’s habit of “buying the listing” which I’ll explain more about later. In a nutshell, it’s an unethical practice in which an agent purposely misleads a seller into thinking that an agent suggesting a higher listing price will deliver a higher sales price.
How well do you know the neighborhood–what community features would you highlight and how?
Real estate, as we all know is “location, location, location”. So what, beyond the house and property itself, will the agent be selling? Great school district? Accessibility to walking trails or public transportation? Neighborhood events like Halloween gatherings? How will the agent draw buyers’ attention to these features? Make sure the agent can sell the neighborhood as well as the property.
What are current market conditions and how might they affect my list price, timing (to list and to sell), what repairs or other work I might want to consider?
Are prices going up or down where you live? Is it more of a seller’s or buyer’s market? What about the time of the year? Does that matter? Are people more likely (often tied to mortgage rates) to be looking for remodeled properties vs. ones that need updating? What are current trends that might affect your house?
Once you’ve done some research, will you please share the comps with me and take me to see some of the active ones so I can see my competition?
Any pricing strategy should rely most heavily on comparing your property to comparables in the area. Ask the agent to share them with you so you can understand which aspects of your house are “better” or “worse” and ask for help interpreting how that features affect value. If there are comparable properties currently for sale, it can be very educational to go see them in person. Again, you’ll probably need some help from the agent evaluating the prices. For example, it’s much more likely a house that has been on the market for three months is overpriced (as it hasn’t sold) as a property that has been on three days.
What is your marketing plan and may I see examples?
It’s important to see what kinds of marketing materials and idea the agent produces. Before you list, does he suggest staging or repairs that would result in high return on investment? Does he do paid Facebook advertising or send out email blasts about his new listings? Does he send out just sold cards or other mailings? What print materials does he leave in the house for buyers to take? How does he promote his open houses? Does he invite the neighbors specifically? Does he contact agents who have previously sold in your neighborhood? Does he list the property as “coming soon”? What do the agent’s MLS listings look like? How are the pictures and the quality of the description? Keep in mind that something like 97% of people look at properties on line before going to see them. If your on line listing doesn’t showcase your property in the best light possible, you are losing prospective showings.
What will my net proceeds be?
That’s the question you should ask. A lot of sellers ask, instead, “What are your fees?” The problem with that question is that the answer doesn’t actually provide the information you’re looking for. First of all, price is not the same as value. For example, good service and reduced stress are certainly valuable, but it’s difficult to put a dollar amount on them. More to the point, though, is that NET PROCEEDS is really what you, as a seller, are interested in. If an agent says his brokerage charges 5% commission, but his listings tend to sell for 1% less than other agent’s in the same price range, what does that mean? Well, let’s say your property is listed for $500,000. If the agent charging 5%’s average list to sale price ratio is 94% and the agent charging 6% has a ratio of 95%, you might do better with the more “expensive” agent. Here’s the math: with the 5% agent, that $500,000 house would (statistically) sell for 94% of asking price, which is $470,000. With his 5% fee taken out, you’d net $446,500. If you went with the 6% agent, who would, arguably, sell it for 95.75% of the list price ($487,500). You’d net $458,250. Again, it’s about value and net proceeds, not only commission, list or even sales price.
What is your pricing strategy and what if it doesn’t sell?
As previously noted, pricing should be based primarily on comparables–those that have sold as well as those that are for sale. Sometimes, a property has certain unique or unusual features that make it difficult to compare to others, and those are the hardest to price accurately. For example, if your house has an elevator or an indoor basketball court, how much does that affect value? Hard to say if no other similar properties have sold recently with elevators or indoor basketball courts. Your agent will discuss with you how to compare more common features like lot size and square footage, updatedness of kitchen and baths, street values (busy streets tend to have lower value), etc.
Please keep in mind the previous comments about “buying the listing.” Again, that expression refers to agents who suggest a listing price that is appreciably above what the comparables suggest. Their hope is that, when you consider lower numbers that other agents have recommended, you’ll choose them instead, believing that they will get you a higher sales price. Just because an agent agrees to list a house at a certain number is no guarantee it will sell for that. Therefore, it’s important that you take the time to go over the comparables with the agent to get as accurate a sense of value as possible and to avoid being duped by an unethical agent who tells you your house is worth more than it is.
So, what if it doesn’t sell? Well, obviously, the easy answer is “Lower the price” and, to be fair, in most cases, that is what happens. It’s a good idea to reevaluate comparables, especially if there are some new ones since you last looked. The market may indicate a lower value. However, sometimes, the house needs to be painted, or cleaned out or staged. Maybe the rugs need to be removed and the hardwood refinished. Do these projects cost money? Sure, but if they end up selling the house, they may be worthwhile. Remember, every day the house doesn’t sell, you’re not only paying the mortgage, but taxes, utilities and home owner’s insurance and, sometimes, lawn care, snow removal, cleaning, etc. Those carrying costs can build up.
What is your negotiation style?
Try to get a feel for the agent’s style. There are at least two distinct negotiations in a single real estate transaction: the initial agreement and then the one that follows the inspections which usually result in buyer’s asking for repairs or credits. Does the agent seem like she can negotiate confidently on your behalf without sounding aggressive and possibly “killing” the deal? Does she seem meek and like she’ll appear too worried about losing the deal to fight hard for you? Make sure you think her approach matches the one you would take if you were personally negotiating on your own behalf (which, to be clear, you are NOT, if you are listing your property with an agent. He will act as you conduit so it’s very important you communicate well with your agent as to the stance you want taken).
What recommendations do you have for me before I list?
While no one wants a long list of changes or repairs to make to their properties prior to listing them, there are usually some that are truly worthwhile in terms of selling faster and for higher net proceeds. One of these is a pre-listing inspection, which can save you from ugly surprises after you’re under contract. If your agent doesn’t explain this option, you should ask about it. If the agent doesn’t have any suggestions (like washing the windows, having the house deep-cleaned, maybe doing some landscaping, painting the baseboards and trim, etc.), that may not be a good sign. In almost every case, a few improvements can make a big difference, especially in pictures and remember, if you don’t capture buyers with your on line listing, you’ve lost them.
How will you overcome the most obvious objections and how will you market its strengths?
Every house has an achilles heel or two. The trick is figuring out how, when marketing it, to minimize those objections. Ask the agent how he plans to overcome some of the negatives. Does your house back to a busy street, need paint or have a small family room? Find out what he might do to reduce the impact of those characteristics. Similarly, find out how he plans to market its best attributes, like the incredibly private yard, huge closets and active neighborhood association.
May I have a list of references?
While, of course, the agent will not give you references from people who were not satisfied with his service, it’s still worthwhile to talk with a few. You can always ask things like “What do you think was his weakest point?” or “What do you wish she had done differently?” or “How often did he answer the phone when you called?” You might be surprised how much you can find out by just having a conversation.
How accessible are you? Do you have a lot of listings? If so, how responsive will you be? Do you have associates whom I’d be working with?
Many agents who have a lot of listings come to your home to do a listing presentation, but then pass you off to their assistants. Some sellers have no issue with this team approach, but others like to have more concierge service and direct access to the listing agent they’ve taken such care in choosing. Find out how easy it will be to reach that person and how long you may have to wait for a call back. If you will be working with associates, you might ask to meet them, if it’s important to you.
What do you and or your broker offer me that is special or better?
You want to know what tools or programs the agent’s company have that others don’t? You also, want to know what the agent, personally, may be different from what another agent might? In short, why should you choose that agent?
Finally, and perhaps most important of all, is not really a question, but more something you’ll have to do your best to determine through your conversations with prospective listing agents. That “something” is whether the agent’s personality and style match yours. Do you feel like you can communicate clearly and honestly and have a smooth working relationship? Do you trust her? Selling a house is often stressful, regardless of the specifics of the transaction. Choosing an agent carefully with the concerns above in mind may go far in reducing your anxiety, so be sure to ask questions and make an informed decision.