TOP QUESTIONS YOU NEED TO ASK BEFORE CHOOSING YOUR REALTOR
How long have you been in residential real estate sales? Is it your full-time job?
Most of real estate is learned on the job. Producing targeted marketing plans, procuring multiple offers, knowing how to handle them effectively, negotiating components within the transaction (there are many more things than just sales price), putting deals together, keeping deals together, putting out fires during the escrow process, knowing the process start to finish and communicating with the seller through out, etc. takes a lot of know how. The more deals completed over many years will produce a Realtors success experience. This experience is a sign of longevity or better yet, a professional. Real estate is a full time job. We joke that real estate agents work half days - only 12 hours a day! Never hire a part time or newer agent. Your home is too valuable of an asset to have someone representing you that is lacking in laser focus and professional experience.
What designations or certifications do you hold?
Real estate professionals have to take additional specialized training in order to obtain these distinctions. Designations and certifications help define the special skills that an agent can apply to your particular real estate needs. One designation sellers might look for is the GRI - Graduate, Realtor Institute. Less than 9% of real estate agents in the nation attain this designation as it requires 12 full day training sessions completed over a 12 month period. Sellers might also look for whether the agent is producing sales volume at the Masters Club level or higher (REALTORS® must produce at least $4.5 Million in real estate sales with a minimum of eight transactions or at least 20 transactions). Currently less than 12% of agents within the Board of Realtors attain that level of sales volume annually. Lastly, a seller should ask the Realtor if they have completed their required continuing education requirements. Realtors are required every four years to complete 45 hours of additional training in these areas: three hours each in Ethics, Trust Fund Handling, Agency, Fair Housing, Risk Management, and 30 hours in Consumer Protection.
How many days does it take you to sell a home?
How does that compare to others?
The REALTOR® you interview should have information about their performance on hand and be able to present market statistics from their local MLS to provide a comparison. The longer your home sits on the market the less money you will make. The highest level of interest from buyers is within the first three weeks of your property going "on the market." Homes that are not sold during the first three weeks generally take longer to sell and for less money. Typically buyers do their homework and look at a number of homes before they make their buying decision which gives them a good feel as to the pricing and value of homes on the market. When newer listings (your competition) come onto the market, they attract the buyers eye. A new listing takes advantage of the initial three week marketing window and more often than not, if priced right, can obtain multiple offers. Another point to consider - the longer you own your home during the marketing/sales process the more payments you continue to make which is less cash in your pocket. Homes that are priced right and have an aggressive marketing plan with an experienced, professional Realtor sell faster and for more money.
What's the average variation/percentage between your initial listing and final sales price?
This alone can save you lots of money if you understand it. One of the biggest mistakes sellers make is focusing their energy on the Realtors commission rather than looking at the entire package the Realtor offers. If a "discount service" Realtor (say commission of 5% vs the standard 6%) sells their listings at 96% of original list price, those sellers are leaving money on the table in two forms.
1) Generally this Realtor suggests a higher list price than what the market will bear, so they get the listing agreement signed. What seller doesn't think their home is better than the others and is worth more money? In the real estate profession we call this "buying the listing." The Realtor knows that once the property is under a listing contract they have eliminated their competition and can now control the process. They will get the list price that is needed for the property to sell later down the road when the seller is not getting offers and is more willing to adjust price accordingly. Sadly, this strategy benefits the Realtor, not the seller, and the seller has lost the most coveted time of the first three weeks on the market at a competitive price. They end up taking longer to sell and selling for less money due to price reductions in order to re-attract potential buyers.
2) The second reason helps to have the math written out to fully see what you are losing by emotionally focusing on the "commission."
Scenario #1 - Discount Broker at 5% commission. Realtor sells your home for 96% of list price. You saved 1% by going with a discount broker of 5% vs the standard of 6%. Your list price is $520,835. Your home sells for $500,000. Your total commission expense is $25,000.
Net to you is $475,000**.
Scenario #2 - Professional Broker at standard 6% commission. Realtor sells your home for 99% of list price. Your list price is $520,835. Your home sells for $515,626. Your total commission expense is $31,250.
Net to you is $484,376**
** In these two scenarios, the seller would have made an additional $9,376 dollars by listing with the professional, non discounting Realtor.
What specific marketing systems and approaches will you use to sell my home?
Your agent should have an aggressive, innovative plan and understand how to market your property online. Gone are the days of selling real estate in a box. Realtors need to have all the traditional marketing campaigns (sign, MLS service, flyers, just listed cards, open house**, newsletters, etc.) AND they need to have embraced technology (professional photos, property videos, internet marketing / advertising, websites, social media marketing - Youtube, Twitter, Facebook, LinkedIn, Instagram, Pinterest, and blogging). In addition to these, the professionals who have years of experience and hundreds of homes SOLD, maintain databases and lists of interested buyers. They are able to market to and work these databases to get additional buyers for your property. This is called target marketing and is very effective if used properly.
** A note on open houses. Generally these benefit the Realtor in that they can use your home as leverage to attract other clients they can sell another home to. Open Houses can be inconvenient to the seller as you have to leave your property (typically on the weekend) for hours at a time while people are going through your home. A modification from the traditional open house that top producing agents are utilizing is the MEGA OPEN house, done once during the first weekend of marketing the listing on the MLS. It is an open house on steroids. As you talk with your potential Realtor ask them their marketing plan and see if they are heavy on traditional open houses. If they are, you will know you have an inexperienced Realtor, or one who is not very busy and needs to increase his buyer prospects.
Will you represent me exclusively, or might you also represent the buyer?
It's legal to represent both parties in a transaction, and your REALTOR® should be able to explain his or her philosophy on client obligations and agency relationships. There can be a real advantage of working with a Realtor who has the experience of many closed sales. One of those is the ability to handle both sides (seller and buyer) of the sales process. The transaction can actually be smoother when only one person is the intermediary between the two parties. Also, many times the listing agent who also brings the buyer will work with the seller on a discounted commission rate or a credit back upon the sale of the Sellers next purchase. If you as the seller have an issue with your Realtor representing both parties, generally the Realtor's Broker can step in and represent one of the parties involved.
Can you recommend service providers who can help me obtain a mortgage, make home repairs, and so on?
Practitioners should be able to recommend more than one provider and let you know if they have any special relationship with any of the providers. A professional Realtor treats their business with a long term focus and understands the value of having a database of contacts which includes a wide variety of practitioners. A professional Realtor will bring a lot of value throughout the home sales process and should have a list of practitioners to forward on to you.
How will you keep me informed about the progress of my transaction?
The best answer here is a question back to you on how you prefer to be communicated with. A real estate agent who pays attention to the way you prefer to communicate and responds accordingly will make for the smoothest transaction. They should have a plan of frequency and how they will update you regarding the status of your listing and it's marketing campaign, including the results. With a plan of communication you as the seller can look forward to a specific timeline of updates and are not left wondering what is going on.
What is your listing to buying representation percentage?
This is another one of those tell all statistics. If the Realtor you are interviewing has a much higher percentage of buyers represented versus sellers, you have an idea that they are less experienced of the ins and outs of the listing process. A typical top producing agent will have a 70/30 ratio of sellers to buyers. You do not want a Realtor who only works listings because they will have lost out on building a database of very motivated and qualified buyers. Also, a listing agent who does not personally work with buyers will struggle on being able to tap into the mindset of a buyer. This can hinder your negotiations effectiveness as they will not be able to hit key points when dealing with the buyers of your property.
Do you have a strategy or process in handling multiple offers?
A skilled real estate professional who specializes in listing homes will most certainly have a strategy to not only attract multiple offers but also a plan on how to maximize them for you. Again, this is a skill that is learned by doing transactions rather than discussing theory in a class room. To maximize multiple offers one must have experience and also a mindset of both the seller and the buyer. One must know when to stretch the buyers, pitting them against each other but not too far where they end up walking away. This is truly a skill, and also requires a gut instinct that is honed from repetition. Generally an agent who has a high list price to sale price ratio is one who has dealt with multiple offers on many occasions. In markets such as Granite Bay or Roseville, where demand is high and inventory can be low, the likelihood of obtaining multiple offers on your property is very high - ONLY IF you have followed the advice above and chosen a professional Realtor who can confidently answer the questions above.
Matthew Stewart Real Estate Team
@ Realty World - American River Properties
"17+ years and hundreds of homes SOLD success experience!"