The blindingly hot seller’s market of 2006 is over. That market has burned itself out and been shoveled off to the ash heap of history. If you’re thinking of selling your home in the current market, you need to look forward not back. Real estate is cyclical. Seller’s markets come, and the fall by the wayside in favor of buyer’s markets. We’ve just run into the next part of the cycle. Enter the buyer’s market.
Don’t despair though. Buyer’s markets may be painful for the seller, but most people who sell their homes will also need to buy a new one. While you may not get as much for your home when you sell, you’ll most likely be able to get a lot more for your money when you buy.
Still, there are some things you can do to ensure that you are as successful as possible when selling your home. This article is about helping the seller in you when it comes time to find a realtor. We’re getting ready to put our house on the market and we will be buying a new home as well, so there will be future articles for the buyer in you too.
The seller in us wanted to make sure we were doing things the right way, so we went on a learning binge. We took classes, read books and internet sites. We gathered as much info as we could before lining up several interviews with local realtors. What follows is the result of all that research, distilled for you into a list of the 10 biggest points to consider when interviewing your prospective realtor.
1.) How long have YOU been selling real estate?
You’re really looking to get a sense of how much experience the realtor has. Be sure to find out if he has been consistently selling, or only on an on-and-off or part-time basis. You don’t want a dabbler in Real estate. You want someone with several years of experience, preferably in your area. This is especially important in a buyer’s market. Also, don’t let him tell you how long his agency has been in real estate – you want to know HIS history, not his company.
2.) What is YOUR average sales price?
You want a real estate agent that has experience selling homes like yours. An agent that specializes in homes around $500,000 isn’t going to have the clientele or experience selling a house that’s valued at $200,000. The converse is also true; someone practiced in selling a $200,000 home isn’t as effective selling a $500,000 home.
3.) What is the average time for YOUR listings to sell?
You want an agent that who sells his listings faster than average for your area. This indicates a professional who is serious about selling, with a solid marketing plan, knowledge about pricing and wide experience in your area. Be sure the agent tells you his average time and doesn’t just quote the average for his company.
4.) What percentage of YOUR listings actually sell?
Again, you’re interested in your prospective agent’s average and not just his company. No one is 100% perfect, but a good agent should be above average for your location. A high percentage is a good indicator of the agent’s knowledge of the local market and pricing.
5.) What is your list price to sale price ratio?
This is a percentage of how much of the original list price the agent usually sells his listings for. For Example, if he tells you his ratio is 95%, then he usually sells a $100,000 listing for $95,000. This should give you an idea of how knowledgeable he is in determining accurate list prices.
6.) What is your marketing plan for my home?
A good agent should have a step-by-step plan to find qualified buyers for your home. Every agent submits listings to the MLS (Multiple Listing Service) and puts a “For Sale” sign up in the front yard. You’re looking for an agent that uses innovative and aggressive marketing to gain a competitive advantage. A good agent should make effective use of the web as well as local mailers or free real estate guides at local supermarkets to promote your listing. They may use public access cable channels, or techniques to bring other realtors into your home to create a “realtor buzz.”
7.) How much is your commission?
This is an important point for many sellers. Everybody loves a bargain, but beware an agent that offers a big discount. Often times you get what you pay for, and he may just be looking for a listing with little intent of spending much time on it. Of course, you can also find a realtor who charges much more and delivers much less. It’s best to bear in mind that the national average is about 6%, so if a realtor varies greatly then make sure it’s worth it.
8.) How long is the listing contract?
The listing contract should have a specific begin and end date. As with many things, there is no absolute rule for the length of a contract. A general formula is about the average time to sell a home in your area plus 1 or 2 months. You typically don’t want anything less unless you absolutely need to move and have drastically reduced your list price.
9.) Do you have an assistant and other support staff working for you?
You typically want an agent that at least has an assistant. If they don’t have an assistant, it probably means they are either not that busy or they will be overwhelmed with the daily “grunt work” of being a realtor. If they aren’t busy enough to need an assistant, then they most likely lack experience or are not a full-time realtor in the sense that they stay on top of the market.
A good realtor needs an assistant to perform the menial tasks of submitting listings to the MLS and web sites. That being said, you want to make sure that your realtor won’t be an absentee agent either. You’ll want to know that you’ll communicate directly with them when you need to.
10.) What if I’m not satisfied?
Most agents who have been in the business a while and are true professionals, either offer a guarantee or an option to cancel the agreement if you are unhappy. It shouldn’t come to this, but you want to make sure you have an out if something goes wrong or you’ve completely misjudged the realtor.
Remember: These are just guidelines, or points to consider. You may find them useful to begin the interview process, and just see where the discussion leads. No realtor is going to fit every one of these points 100%, so be sure to meet with at least 2 or 3 realtors, and ask plenty of questions.
You should be able to get data for local averages for things like price to sales ratios, average time on market and more by contacting your local realty board.
Happy realtor hunting!
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