As we head into Spring, there will be an inevitable surge in Real Estate listings. As the boom fades and more challenging market conditions emerge, the vendor’s real estate agent is either an asset or liability in negotiations. These must-ask questions have been extracted from the book, Inside Real Estate to ensure you employ the best agent.
What evidence did you rely on when valuing our property?
We are all susceptible to believing what we want to hear. If an agent quotes a high price for your property, it’s natural to want to believe them. However, an agent who cannot justify their price to you as the owner will have an even harder time convincing a buyer!
If the property sells below your quoted price, do we still have to pay full commission?
When you sign an agency agreement to sell, the agent must provide a written assessment of value. You, as the seller, enter into the agreement, in part, based on the written assessment of the agent. If the agent fails to achieve their promised assessment of value, you should have an ability to penalise the agent for getting it wrong. By being firm on this point when interviewing agents, you will flush out what the agent really thinks your home is worth.
How do you have an auction with one buyer?
It is staggering how many homeowners list for auction without knowing the answer to this question. Clearly, auctions rely on competition – that is, multiple bidders.
Unique homes often require unique buyers. In soft markets, you can be fortunate to have even one buyer. What happens if only one buyer attends the auction? What if two buyers attend the auction, where one absolutely loves the home and the other is a bargain hunter? The bargain hunter sets the price at which the emotional buyer becomes the highest bidder.
Resist signing with an agent until they offer a plausible explanation on how they handle a situation where they have only one buyer at the auction.
What strategy will you employ to get the highest price for our property?
Agents love to talk about ‘clearance rates’ when selling and marketing their firm. As a home seller, you want a high price, not to be part of an agent’s clearance results. Focus on the agent with the best strategy for achieving the highest price, not for clearing housing stock quickly.
The time to ask tough questions about the agent’s strategy is before you employ them. The agent is less able to wave you away if you grill them prior to listing. After all, you will be paying a lot of money for the agent’s service, so it’s best everyone is on the same page before you begin.
If you already have buyers, why do we need to pay advertising upfront to reach those same buyers?
It’s the greatest paradox in the market. The agent claims to have readily available buyers, and then asks for advertising money to find buyers. Why?
Who is the agent that will attend the inspections with buyers?
Many lead agents will list the property and then palm off the selling of the property onto a junior or assistant. Get it in writing that the agent you list with will be the agent handling inspections and negotiations. You don’t want the sale of your home to be treated as a training exercise. In fairness, it’s not that junior salespeople won’t be involved in the process, but you need to be completely clear about the experience of the agent who will be leading negotiations in the campaign.
Can we have the names and numbers of 10 previous clients?
Real estate agents sell houses to buyers and services to sellers. The house is tangible, yet the service is intangible. Judging the value of any service in advance of actually receiving the service is difficult. Speak to the agent’s recent clients to ascertain whether the promises match the delivery.
Source: “Inside Real Estate” by Peter O’Malley