On today’s episode,
Bernadette talks about how to choose a real estate agent for selling your property. She has listed important points to note to make sure that you choose the person that’s going to get the best outcome for you.
Listen to Episode 49: How To Choose A Real Estate Agent For Selling Your Property
Bernadette covers,
- Update on her reno projects going to market
- The School of Renovating Bootcamp
- Practical ways on choosing the best agent to sell your property
- Engage someone local that knows the area of the market
- Engaging your agents at the beginning of your project
- Check the agents data
- Limiting the agency agreement
- Exclusivity with one agent
- The agent’s commission structure
- Find out the agents nuances on how they operate
- Working with someone you trust
Episode highlights
00:22 – Redfern, Bondi and Wynnum
02:05 – Decisions based on feelings
04:04 – Qualities of the agent
06:13 – Engage the agents
08:32 – A little story
10:11 – Limit the agency’s agreement
12:40 – How they operate
14:23 – Work with someone you can trust
15:51 – 10 point checklist
Transcription
When discussing how to choose a real estate agent for selling your property I probably don’t need to tell you that it needs to be someone that is good at their job. You commit a lot of money to paying an agent and you’re also entrusting them with a high-value property. You want to make sure that you choose the person that’s going to get the best outcome for you.
Now, one of the problems I see with this is that most people make that decision based on feelings. They choose people they like or that they feel familiar with and they’re not really good grounds for making such a momentous decision. You need someone that can actually deliver the goods. It’s important that the person you choose has a good manner but that’s not the whole story.
AVOID DEFERRING TO THE MANAGING AGENT TO SELL PROPERTY
If you are selling an investment property that you have had on the rental market for some time it can seem logical to defer to your managing agent to sell the property You wont get any arguments from the managing agent. Picking up a selling commission on a property of ten or twenty thousand is a huge windfall in comparison to the fifty or even a hundred dollars a week in managing commissions. But the problem is that there is a huge difference in skill sets required to being a selling agent.
They need to be good negotiators.
They need to understand the market.
And a managing agent is not doing that every single day.
To engage them to sell your property will rarely produce the best outcome.
RESEARCH THE AGENT, NOT THE AGENCY
When you choose a real estate agent for selling your property, you need to make the decision predominantly around the qualities of the person, the particular agent, and not necessarily the agency.
The agency’s policies and mode of operating do come in to play.
First and foremost, it’s about that person, how they operate and what runs they have on the board. When you are researching, research the agent rather than the agency.
MAKE SURE YOUR AGENT IS LOCAL
It is very rare that you will get the best outcome from someone outside the local area. The main reason being that a local agent will understand what’s going on in the local area in terms of development and the demographics.
They’ll understand your buyer and they will also have a database of people who have been looking for a property and that’s an incredible asset.
We follow agents that are not local when we’re buying property because we know that they’re usually not up to speed with the local values. They don’t understand the nuances of the area. And the second reason is the tyranny of distance. If they have to drive to the property for someone to inspect it, they will tire of that very quickly. I have had some beauties over the years that we’ve bought from. We could see they just could not get that property off their books quick enough because it was a reasonable distance for them to get to show it. So that creates a reason for them to want to offload it quickly. And it’s also a reason for them to not be overly cooperative in terms of openings outside their normal inspection hours.
RESEARCH THE AGENT AS A PROSPECTIVE BUYER AND CHOOSE BEFORE YOU HAVE SOMETHING TO SELL
Once you’ve got that property to sell, then it totally clouds conversation. Like hanging a carrot in front of the donkey because listings are their bread and butter. So if you’ve got a listing, they’re going to say whatever they need to say to get that listing. I always suggest to our students, particularly when they’re doing renos, that they engage the agent at the beginning of the project so that they can work in partnership. And during the reno and you don’t have this situation where you’ve got agents vying for your work. Do that research when you are posing as a buyer rather than someone selling and see how they behave with prospective buyers and whether they’re someone that you would consider for selling your property.
COMPARE THE LOCAL AGENTS SALES STATISTICS
Do some comparisons and there’s plenty of information on the internet to do this. Basically, you want to look at how many properties they’ve sold in the same price point as you will be selling and preferably the same type of properties.
If you’re selling a $700K house, you’re not going to use an agent that sells a lot of units or apartments at the $300-$400K mark. You want to get an agent that sells in the type of property you’re selling in the same price bracket. They will have seen the most of your market, will have a track record and will have the right buyer on their database already. You also want to have a look at other metrix like the average days on the market just to get an idea of basically how effective they are.
MICHELLE’S PROJECT
STORY
I was selling a property for my mum and it’s in a two-horse town in central Victoria. The town has 2,300 people. There are only two agents. I basically went eeny, meeny, miny, mo and picked one of them. Seriously, this agent was absolutely hopeless. I actually took it off the market. I still have it now.
But then I had another property when she went into care. This time I sat down and did the research. And even in a little town like that, the stand out salesperson was from the opposing agent. It wasn’t a typical like Ray White or Raine & Horne. It was actually a stock and station agent that also sold a property and it was one of their salespeople. I think they only had two salespeople and she was one of them. She had sold by far the most properties in the price bracket that I was looking to sell. I rang her up and I said, “Oh, by the way, did you know you’re the top salesperson in this town for this type of property?” And she had no idea.
I engaged her and she listed it on a Friday. And on Monday she had it sold because she had a database of people interested in that type of property and she had it sold for our asking price.
I think that’s a pretty good story to really reflect the value of doing a little bit of research.
LIMIT THE AGENCY AGREEMENT
Most agents you up for 3 months as a standard. Now how long you sign up for depends on the area and the average days on the market. But I certainly wouldn’t be giving the agent 3 months as a matter of course, I tend to reduce that and that gives you the freedom to change if you need to. It keeps your options open.
GIVE THEM EXCLUSIVITY
The best way to demotivate someone is to not give them the full job. My view is that you should go with one agent exclusively and let them do their best work.
UNDERSTAND THE AGENCY’S COMMISSION STRUCTURE
This is one of the points that harks back to the actual agency and not the individual.In some agencies, the listing agent gets the lion’s share of the commission.
Some other agencies have a situation where there’s no commission. Everyone just works for a salary. I personally do not like that. I think the best agents are quite hungry. If you want to have a good agent, a good selling person, you need to incentivize them.
I think that structure encourages mediocrity.
And then there’s the other scenario that I’ve come across where the listing agent gets some of the commission and the selling agent gets a portion of the commission, too.
I have my reservations about this because I’m always a bit concerned that the listing agent has control of it. And may steer you towards someone that they want you to buy from because of the commissions set up and they may not necessarily pay the best price. I’m always a bit wary of that. But of course agents do have a code of conduct. And Many agents operate with integrity. But you do also need to be aware of human weakness.
UNDERSTAND THE SALES PROCESS
When you choose a real estate agent for selling your property you want to find out how they operate and make sure their sales process will give you the best chance of the best price.
I’ll give you an example. I was interviewing agents for the Wynnum property. I had done the comparison and selected the top three in the area.
When I asked him this question, he said that they don’t have open inspections because they have such a strong database. People just ring up and make an appointment to go and look at the property.
I believe that that’s putting up a barrier for people getting to see the property. We know that the more people that will come in and see the property, the broader your pool of buyers.
As far as I’m concerned, that’s not a good structure.
And as a result, I didn’t go with them.
MATCH THE AGENT’S DEMEANOR TO THE MARKET
You want to really find out if there are any nuances about the way they operate. Of course, you want a good negotiator, but until you’ve used them, it’s pretty hard to figure out what their negotiating skills are. But one thing I would say is you want to match the agent’s demeanor to the market. If you’ve got, say, quite an urbane or sophisticated market, you don’t want to bring someone in that has the characteristics of a car salesman. You want someone that really matches the demeanor of your market is quite sophisticated and can communicate with them at the same level, whereas there are other markets where you might want an agent that’s more salesy.
That’s where their personal skills come into account.
CHECK THE MARKETING COSTS
When you are discussing the agreement with your agency. You want to get clear on what sort of marketing they do and what cost to factor in, because that comes into your budget.
HELP THEM DO THEIR JOB
By that, I mean make sure that the property is styled, immaculately clean and presented really, really well. Make sure that the property is complete and there aren’t any grotty little details that the agent has to explain away.
Also make it available for whenever they need people to come through.
You can’t sell a secret. You’ve got to be willing to have the public trooping through the house at various intervals during the sales campaign. It’s an inconvenience, but it’s a fact of life.
Help your agent by developing the story around the property. Give them something to talk to their buyers about. Story sells so give them something to work with.
BONUS
I almost forgot, in larger companies don’t engage the principal of the company. They already have a big job running the business. Usually you will find that they will do the deal and then appoint juniors to sell the property. You want someone who is young and hungry and takes ownership of the sale.
WRAP UP
All that being said I do believe that you should work on building a relationship of trust and respect with your agent. He/she can be the best sales person in the world but if their values and practices don’t align with yours, it will be a hard road.
If you or your family or friends is planning to sell a property soon, please download our checklist and share with our compliments.
BERNADETTE’S VELVET EUROPEAN PILLOWS IN THE ABSENCE OF A BEDHEAD
