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Questions Sellers Should Ask Before Choosing An Agent

Once a homeowner decides to sell their home and hire a professional agent to market it for them, most sellers will interview a few agents before signing on the dotted line. That’s a good idea. However, most sellers don’t have a clue on who is the RIGHT choice. Many sellers pick and agent based on a “connection” or similar personalities.

Unfortunately, just  a good personality match alone is rarely enough these days. You need an agent who is more effective in getting results than someone you “have a good feeling about”. You are not hiring a friend; you are hiring someone to do a job.

I  believe that the average agent’s listing presentation is very similar to every other agent’s presentation. And as a result, the seller really has little to judge by and they reduce their decision down to the two questions they want answered.

  1. Which agent will sell my house for the most money? (That leads to overpriced listing inventory that sits unsold because today’s buyer is looking for a “deal” and NOT overpaying.)
  2. Which agent will charge me the least to do it? (That results in getting an agent less likely to invest in improving their performance through education or technology or an agent with a limited budget to spend on the marketing of your home.)

Of course, I understand the logic to those questions (make more, spend less), but focusing on these questions alone is shortsighted and eventually costly. Here are four questions that most sellers don’t think of- questions that actually WILL give you a better indication of the relative strength of your agent.

1.) “What percentage of your listings EXPIRE?  How does your number compare to the average agent in our marketplace?”

Expired listings are listings that didn’t sell during the time agreed to between the seller and the agent. If one agent has 95% of their listings sell without expiring and another has 25%, wouldn’t you want to know that? ASK!

2.) “What is your Average Days On Market?”

If the average days for homes  listed “For Sale” in your market is 180 days, and one agent is selling their listings in 90 days, wouldn’t you want to know what they do differently to get their results? Conversely, wouldn’t you want to avoid the person who is at 270 days?

3.) “What is your Average List Price to Sales Price Ratio?”

There are many agents who take overpriced listings with the plan to bring the price down as seller frustration goes up. They know it won’t sell at the overpriced number, but they get to have months to get it priced correctly because you have signed a listing agreement. But, you want to sell your home, not drag out a process. Agents with big gaps between List Price and Sales Price are not doing any favors for their client. Uncover their game early and save yourself the heartache. Great agents price correctly Day 1 because they know that price is the best possible marketing strategy.

4.) “What percentage of your own listings do you sell?”

Occasionally, agents and I battle on this point, because they feel that the methods they use to market your home to other agents (to bring their buyers to your home) are more important. But I believe, an agent’s ability to sell their own listings is evidence of the effectiveness of their marketing plan to the consumer (which is really what you are hiring them to do, isn’t it?).

If I were selling my home today, in my quest to find the best agent, I would be asking different questions- questions that prove effectiveness. You may be surprised to learn that some of the most “successful agents” in terms of “units sold” have a large percentage of listings that expire or a high number of days on market or a significant gap between list price or sales price or that after they list your home they are off looking for another listing and NOT for a buyer of your home.  In a twist of the old adage, “Seller, Beware”.


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9 replies
  1. Bill Wallace
    Bill Wallace says:

    Good article. I should agree with it since I wrote a very similar article on my blog in September – http://www.dakotacountyproperties.com/how-to-compare-realtors-a-sellers-guide/

    I do disagree with #4. I personally don’t really like to represent both sides of a deal as I think it’s harder to represent the interests of both parties at the same time. In addition, as someone who focuses on listings, I feel my sellers are better served if I am an expert on the processes for selling homes and not really focused on maintaing a large buyer database. Finally, there are 15k other Realtors in my market. There’s always going to be a much higher likelihood that the buyer will come from one of them.

    Reply
  2. Cliff Freeman
    Cliff Freeman says:

    Dean – An unknowing seller could easuly be misled by an agent’s response to #3 above. Our MLS calculates SP/LP based on the list price at time of contract. Therefore, original list price and price reductions are not taken into account.

    RE: #4, it really shouldn’t matter how many of their own listings an agent sells unless they’re offering flexible commission on an “in-house” deal (say 5% instead of 6%). The KPIs are #1 and #2.

    Reply
  3. Rob Jenson
    Rob Jenson says:

    You’re right on. The sellers original plan to make more and spend less definitely sounds good on the surface, but ultimately backfires. I’d say, for the most part, you get what you pay for when it comes to service & marketing and the pricing just comes down to how realistic sellers can be. Here are some of my concerns about points 1-3. In Las Vegas, and for most of the U.S., prices have done nothing but drop. This has added to extended time on the market and significant price reductions. Many sellers and their agents are very aware of what market is, but work together on a strategy to test the market and try to optimize the sales price, along with timely price adjustments to get the most out of the sale. Something I did recently was a spreadsheet for all the sales in a high end community in Las Vegas. I looked at how many days it took for the home to go into contract from the most recent price range. Out of the 18 sales going up to $7MM 14 out of the 18 homes sold in 3 months for at an avg discount of 12.2%. The homes that took longer were an avg. of 16.75% off the list price. However, some of the homes sold for up to 68% off the original list price. These numbers show the sellers that homes that are priced right sell quickly.

    My concern about Point #4 is that the odds are that another agent will bring the buyer and the seller should be more worried about how the listing agent will expose the home to the highest number of qualified buyers. How does their website rank compared to other agents on Compete.com. Do they do open houses? What do they do that’s actually unique or different?

    Ultimately sellers will get a faster sale, more money or both, by working with the right agent.

    Reply
  4. Jim Paulson
    Jim Paulson says:

    Great points, I went back to update my own responses to these four questions and found the following going back 10 years:
    86 Average Days on Market
    98.25% List to sales price ratio
    I sold 90% of my listings!
    I sold 24% of my own listings.

    One correction in the article however is that according to NAR’s Profile of Home Buyers and Sellers 2010, “66 percent of sellers contacted only one agent before choosing one to assist them with their home sale in 2010.” I wish more did interview more agents!

    Reply
  5. Jane Foster
    Jane Foster says:

    I think a really good listing presentation where detailed research is presented on the sales, selling time, how they were marketed, who bought them, where the buyer came from, down payment, lender, and a plan to market in a particular price range and area is a must so the seller can understand the market. There should be a written committment from the agent telling exactly what they will do, and a strong web marketing plan with the best photos and videos, floor plan, and an agent who stays in constant communication and uses her ideas and the sellers to get as many realtors/buyers as possible into the property is way to sell homes.

    Reply
  6. Kari McGee
    Kari McGee says:

    I am dismayed to see your perspective on item #4 of this article. I find the practice of selling one’s own listings to be seriously problematic and akin to working both sides of the same legal transaction as a lawyer. Of course I’ve seen it done over and over again, but too often the results are that neither of the principal parties are happy with the results of the transaction. Your job as a listing agent is to represent your seller’s best interest and I don’t believe that’s truly possible if you are also representing the buyer in the same transaction. I fully expect that this practice will be something our state and/or federal governments will target as negligent and faulty business practices in the near future and I look forward to such a review of this incredibly flawed approach to selling real estate. Kari McGee, Broker, The Hasson Company

    Reply
  7. Dean Hartman
    Dean Hartman says:

    If as a listing agent, your job isn’t to find a buyer….why do you advertise the home to anyone other than other agents? The high horse position of not wanting to split loyalty between buyer and seller seems impractical in how real estate is conducted at the present time. If the rules are changed, maybe #4 becomes irrelevant, but until now I maintain that hiring an agent who the day after taking my listing is spending their time looking for the next listing and NOT looking for my buyer is an agent I don’t want. Just my opinion….

    Reply
  8. Kari McGee
    Kari McGee says:

    In response to Dean Hartman’s post: marketing ones listing properties in order to attract ready, willing & able buyers, and actually representing those same buyers in a transaction where you also represent the seller, are two very different things. Of course I never suggested that it was not a listing agent’s job to attract buyers to the listing.

    Reply

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