So you’re thinking about selling your home and wondering, “Do I just list it with Aunt Lisa’s nephew Joe or do I interview other job applicants?” Because that is what you are essentially doing—hiring someone that you can trust to do everything in their power to sell your home—and the costs associated with that can easily amount to tens of thousands of dollars. According to the National Association of Realtors (NAR), one in every 163 people in Arizona is a licensed real estate agent. So if it is not Joe, you are bound to have a dozen or so Facebook friends who will try to persuade you that they are God’s gift to anyone seeking a listing agent. Below I have outlined some of my (somewhat opinionated) thoughts as to what to keep in mind when going through the process.
For full disclosure purposes, I am a real estate broker in Arizona, but am not going to reveal my company in this article, as it would be self-serving at best. I will, however, plug My Local News, which I believe is a great resource through which to market your eventual listing. More to follow.
- Due diligence: OK, so you really like Joe, and there is nothing wrong with that. My suggestion is that you reach out to him, let him know that you are considering putting your house on the market, and ask for a Comparative Market Analysis (CMA). This is essentially a report that suggests a range as to what a Realtor® believes your home should be listed for utilizing MLS data through nearby sales comps. It is also important when talking to Joe that you let him know right up front that if you decide to put your house on the market, you are going to interview several agents. Yes, Aunt Lisa may give you an earful, but she is not the one paying the bill, is she?
- Getting started: Never suggest a price or tell an agent what you “need to get out of the sale.” Instead, simply ask three or more agents for a CMA. If they’re all good agents, then they should all come back with around the same suggested listing price. Why, might you ask? Simply because many Realtors® are going to tell you exactly what you want to hear and even embellish on an eventual suggested listing price. Unfortunately, it is human nature to sign a listing agreement with the salesperson that promises you more greenbacks. Yes, they will argue that “we can always lower the price later,” but keep in mind that all of the buyer’s agents out there will see the pricing history and I would suggest that if they can smell blood in the water, the sharks will start circling, i.e., lowball offers. This is why I suggest asking a few other agents besides Joe to provide you with a CMA. If they’re all good agents, then they should all come back with around the same suggested listing price.
- Narrowing your list of job applicants: OK, so now you have three or more CMAs in hand and you have a pretty good idea as to what your house should list for. The next stage is to set up listing appointments with your top choices. Yes, you’re going to have to meet with other applicants besides Joe if you are really serious about finding the best person for the job. This is the interview where the Realtor is going to walk through your home, make a lot of faltering comments about how nice it is, and tell you why they are the best thing since sliced bread.
- The listing appointment: This is where the tires meet the road. Your goal is to have a mutually beneficially relationship with whoever you hire, and unlike a shotgun wedding, you should not feel pressure in any way to make a rushed decision. Here are some questions that I would suggest asking—and take down notes of their answers. 1) How many years have you been licensed? Verify this information and that your agent is in good standing with the Arizona Department of Real Estate. 2) Is this a full- or part-time job for you? 3) How many listings do you currently have? 4) How many sales did you have in the last year? Verify this information with the agent’s broker, which is the XYZ real estate company they work for. 5) What do you think the positive aspects of our home are? 6) What are the negative? 7) How are you going to market my listing besides putting your sign out front and inputting the info into MLS? 8) Will you be hiring a professional photographer or taking the pictures yourself? 9) Matterport 3D tour? There’s more on this below, but the wrong answers are deal killers in my opinion.
- Commission: You are going to hear an earful as to why it should be at 6 percent. You will also be told that buyer’s agents will not show your home if they are receiving any less than 3 percent. There is probably some truth to this, but it is hard to prove at best. I think that every listing is unique and if it was me paying the fee, it should certainly be a discussion point. Make your agent really convince you as to why they deserve the full 6 percent. This is especially true in high-priced listings. Also, if you decide on Joe and he really only sells one house a year (if that), does he really deserve x on your potential sales price of y?
- Marketing your listing: In today’s social media-savvy world, it is critical to get as many eyeballs as possible to see and interact with your listing. First, the listing itself has to be professionally done. When I come across a listing with bad photos, a poor description or it is in all CAPS, I cringe in pain at the disservice the seller is receiving from his or her agent. There is absolutely no excuse for this when there are companies such as Lister Assister that will do it all for the agent. The bottom line is that unfortunately, many agents are just plain cheap, and this is why you need to hold their feet to the fire. This is also why I self-promote My Local News Preferred Listing Ads. We publish 21+ Arizona weekly community newsletters and target our interactive ads to each community that the listing is within. Each ad is also posted to its associated community Facebook (FB) page, as well as a variety of other social media outlets. See Tempe News as an example. For each $50 Facebook post boost, your listing is likely to have hundreds of people engage (click through to see the full interactive listing) with the ad. At the end of the seven-day boost, your agent will receive a report like the one below and hopefully will engage with FB users who leave comments on the post.
- When your Realtor wants both side of the deal: Let’s say that your agent has an open house and in walks the nice family that is not represented by a Realtor. Yes, now your agent is seeing some really big dollar signs. Before you know it, your agent is going to be handing you a dual agency agreement, which although legal, is kind of like asking a lawyer to represent both the plaintiff and the defense. Before I call the kettle black, I have done it in the past, but I more often than not suggest that the buyer use another agent. Either way, you should discuss this potential scenario at the outset and before the listing agreement is signed.
- When the relationship goes sour: Unfortunately, it does happen, for a whole variety of reasons. When this happens, do not be intimidated about cancelling the listing. You may not have Aunt Lisa and Joe over to dinner anytime soon, but that is what happens sometimes when family does business together. Also, if there ever becomes a time or an issue where you think your agent is not representing you to the best of his or her ability, call their broker and talk them through your concerns. The broker is the person ultimately responsible for all of his/her agents, and trust me in that they would rather hear from you before an issue turns into a potential suit and claim against their errors and omissions insurance policy.
- Stale listing: Just like stale bread, these don’t taste very good. Remember how I mentioned earlier that the buyers can see the price fluctuation on MLS, and you probably already know they can also easily tell how longs it’s been on the market… Unless you are really desperate to sell (which I hope is not the case), then consider taking the property off the market for 90 days. This is the minimum amount of time the property has to be de-listed to be treated as a new listing. Still, keep in mind, however, that all previous listings and sales that were on MLS can be seen by all future buyer’s agents.
- The first offer:Your house has been on the market for only a few days to weeks and you are getting lots of traffic. If you receive an offer, you might have the tendency to want to hold out for something better. After all, just look at everyone that wants to buy your home. Don’t do it! When someone makes an offer, you certainly should listen to your Realtor’s advice on how to counter. However, go in with the attitude of trying to make this deal work. The old saying is true: A bird in the hand is worth more than two in the bush.
I wish the best of luck to you and to the Realtor® you ultimately choose. Happy selling!