Common Mistakes In Choosing A Real Estate Agent
You have come to that time when you will pack your bags and look for your next housing gig. Part of this process will be picking a great Real Estate agent to work with.
Unfortunately, choosing the right Realtor is an area where many home sellers make big mistakes that lead to disappointment.
Your Realtor is an essential part of your team when selling your home. They will link your home and the housing market, particularly buyers and their agents.
Because your Realtor can mean the difference between a quick and lucrative sale and a sale that is anything but, you should exercise the utmost discretion in your choice of Realtor.
Like choosing a real estate lawyer, you should seek the best possible candidate.
There is no shortage of options when it comes to real estate agents. Separating the wheat from the chaff can be challenging, even if it is worthwhile.
Avoid the following mistakes to ensure you get the agent you need to sell your home, as choosing the wrong agent is one of the top reasons homes fail to sell.
Keep reading for the most significant mistakes sellers make when choosing a Realtor!
Understand There is a Difference Between Realtors and Real Estate Agents
One of the more confusing things about real estate is all the names assigned to an agent. You will likely hear real estate agents, Realtors, and brokers.
Believe it or not, they all have different meanings. A real estate agent is not a realtor; you should consider that when choosing an agent to sell your house.
The definition of a Realtor is a member of the National Association of Realtors. When you become a Realtor, you pledge to follow a strict code of ethics. Realtors are held to much higher standards than real estate agents.
A real estate broker often owns a company, but they don’t have to be. They run the brokerage and the agents they employ. To become a broker, you must have been an agent for a specific number of years based on the state.
Brokers must also get a license by taking educational courses and passing a test.
Quite often, the best real estate agents are also Realtors. They decide to invest back into their craft and desire to be among the most ethical in the industry.
Most Common Mistakes Choosing a Realtor
Let’s review everything you want to avoid when selecting your next Realtor.
Recruiting Family
The saying that friends and business do not mix is common for a reason, and a real estate transaction is business. You are trying to sell a property for as much as you can in as short a time as you can, and this will require skill and efficiency – things your friend or family member may or may not possess.
It is not that someone close to you will not do a good job. It is just that you need to screen them like any other applicant. Make sure this person has what it takes to sell your home.
Also, remember that if things go badly, it could damage the relationship. The tightest bonds can be strained when large amounts of money are involved, and a real estate transaction typically consists of a lot of money.
Someone in your family could be an exceptional Realtor, but you might want to have second thoughts if that isn’t their reputation.
Choosing a “Yes” Man/Woman
Pricing a house is one of the most significant parts of having a timely and successful sale. Unfortunately, you may not be looking objectively at what your home will go for in the current market.
If you are aiming too high, only a particular type of agent will agree with the price you are setting.
Realtors refer to this practice as buying a listing, where an unscrupulous Realtor will agree to an unrealistic price to land the listing.
Once your home sits on the market for months, the Realtor will recommend you lower the price to something more reasonable. You will usually get less than you could have; the only person who benefits is the Realtor.
If you are thinking to yourself, why would a Real Estate agent knowingly take on a listing that is priced too high and not going to sell? The answer is simple.
The agent doesn’t care if your home sells because they will use it to get buyer calls for other properties that they will sell. Doing so is called bait and switch, which is common practice with some agents who don’t care.
Going for the Lowest Commission
This is another pricing issue, but this time, the problem is with the Realtor’s commission. It is natural to want to make as much money as possible from selling your home.
You probably have your eyes on another house and want to get something back for all your hard work. However, you have to spend money to make money. Paying the price for a good agent is an investment in the sale of your home and is worth every penny.
There is also the fact that you usually get what you pay for. A well-paid agent will work tirelessly to move your home, while a low-paid one will probably do little more than throw your listing into the Multiple Listing Services and put a sign up in your yard.
Don’t be shortsighted, thinking that getting an agent to agree to a 1/2 percent lower commission puts money in your pocket.
The exact opposite is bound to occur as many Real Estate agents will do everything they can to convince their buyer clients to purchase elsewhere.
Penalizing a Buyer’s Agent is a Big Mistake When Selling a Home
A lower-commission Realtor who penalizes a buyer’s agent is exactly what to avoid.
They will never mention to their customers that it is commission related. No, sir – these agents will point out every weakness in your home to the buyer to convince them there are better properties. All the while doing so because they don’t want to make less money by selling your home.
Ensure you understand the local market, and if 95 percent of the home sellers are paying X commission, the last thing you want to do is undercut that.
Should a buyer agent steer buyers away from your home because you offer a lower fee schedule? No – in the ideal world, this should not happen, as the buyer’s agent shouldn’t be worrying about their pocketbook. However, this is not what always happens in the Real Estate industry.
A great agent’s only concern will be their client’s best interest. The next question you should consider is how many of those “great agents” are out there.
Remember, time is money as well. A fantastic Real Estate agent who knows how to market your home is well worth the money you think you are saving. An agent who sells well can quickly make up the difference in any commission savings you believe you will realize.
Only Interviewing One Real Estate Agent
Only interviewing one Realtor is a prevalent Real Estate mistake. It is human nature to do this, especially if you like the person you have decided to meet with and everything they have told you sounds good.
You may hear the price you were hoping for, and the agent has also explained how they will sell the home. It all sounds good to you.
The problem is you have nothing to compare it against. One of the things so many sellers do is assume Realtors do the same things to sell a home.
This is one of the biggest fallacies in Real Estate and why so many people end up with a second or third Real Estate agent after having no success selling their home.
One of the most brilliant things you can do is interview at least a few agents and ask specific real estate-related interview questions. Often these questions will separate the professionals from the amateurs!
Not Seeking References From The Agents
It would be best if you talked to references before hiring your Realtor. While it may be initially uncomfortable to call people you do not know to ask questions about another person you do not know, it is a necessary part of the hiring process.
Like any other employer, you need to know whether the person you are considering hiring will perform as they represent. Without outside proof, you are going purely on the word of the Realtor.
Make sure the references are recent, too. The Realtor may have been in their prime ten years ago, but be letting things slip now. Get current references and contact them before making your decision.
One thing to remember is that the Realtor is more than likely giving you the names of cherry-picked clients they know will say nice things.
A better way to approach this is to ask the Realtor for the name and address of the last ten homes they sold. This will give you a better shot of contacting someone who is not necessarily going to speak to the agent as if they can walk on water.
Picking an Agent From an Open House
You may have met the agent at an open house in your area, or you may just be taken in by their stories about holding open houses and all the produced traffic.
Either way, you should know that an open house is one of the least effective forms of selling a home and arguably unnecessary. You may be surprised to learn that nationally less than 2 percent of all homes are sold via an open house.
The open house mainly serves to connect the Realtor to other prospective clients. The majority of people that come to open houses do not buy.
Instead, the agent connects with other people interested in different properties and gets to look busy to their clients.
Open houses are rarely worth it. The genuine buyers who attend would have scheduled a showing if there was no open house.
It is far better for your agent to spend time behind the scenes doing what moves homes than holding an open house every week. Generating real estate showings is far better than the traffic from an open house.
You also won’t have to worry about frequent open house theft.
Selecting a Realtor because you met them at an open house and found you had a good rapport is one of the worst ways to choose a Real Estate agent.
The Real Estate Agent Lives in The Neighborhood
Another home seller mistake when choosing a Realtor is picking them because they live in your neighborhood. Is it possible that the best possible agent for the job lives in your area?
Of course, but there is a much greater chance they do not. Don’t think that just because an agent lives in the area, they are better equipped to sell your home than someone who does not.
While the agent living in your neighborhood hopefully knows it well, that doesn’t necessarily preclude someone else from knowing it just as well or doing a better job.
Many lousy Real Estate agents live somewhere – should those nearby homeowners hire them? Not! Remember selling a home is not location dependent. It is about having specific business skills.
The Agent Sold X Number of Homes
You want an agent that is selling homes. However, it is more important that the agent sells a large percentage of their listings than the overall home sale numbers.
For instance, an agent that sells 18 out of 20 listings is probably doing something better than the agent who sold 20 out of 40.
In other words, a 90 percent success ratio is much better than 50 percent! You want a Realtor focused just as much on the quality of their work as on the number of homes they sell.
In this case, an agent sells most of the homes they list for nearly the price they list them at. In Real Estate jargon, this is called the list price to sale price ratio and should be a significant consideration for who you hire.
An excellent agent will sell close to the home’s initial asking price. Going back to what I mentioned earlier, you don’t want an agent that will tell you what you want to hear to get your business.
This agent will be clubbing you over the head for price reductions. Someone worth their salt will probably be able to snap off what their prior year’s list-to-sale ratio was, especially if it was top-notch.
Remember that picking an excellent agent should be centered around a few critical things, including do they price appropriately, market well, and communicate effectively. If you find an agent doing all three of these things, you will most likely sit at a closing table with a smile.
The number of homes an agent sells is essential, but expect the service to match the volume.
The average Real Estate agent sells seven or eight homes a year. Don’t hire an agent thinking that you will get better service if they don’t do as much business as the heavy hitter. Pick an agent with an average amount of business, and you will get average results!
Avoid making any one of these mistakes when selecting a real estate agent.
The Agent Practices Dual Agency
I’m going to be blunt. If the real estate agent you’re interviewing practices dual agency, you should avoid them. There are ZERO benefits for the real estate agent you hire to represent anyone but YOU!
Isn’t that one of the reasons most people hire a real estate agent? You want their expertise and guidance. When you allow the person you hired to become a dual agent, by law, they can no longer provide that service. With dual agency, the agent becomes a neutral party.
The only party that benefits from dual agency is the real estate agent. If you find an agent who tells you otherwise, you’re looking at someone that cares more about their wallet than doing what’s best for the person who hired them.
Dual agency has been made illegal in several states because it harms consumers.
Final Thoughts on Choosing a Realtor
One of the most crucial decisions when selling a house is picking the best Realtor for you. Doing your due diligence will increase the odds of making a sound choice.
If you live in the Metrowest, Massachusetts area, I will welcome the opportunity to be interviewed.
About the author: Bill Gassett, a nationally recognized leader in his field, provided the above Real Estate information on top home seller mistakes when choosing a Realtor. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-625-0191. Bill has helped people move in and out of Metrowest towns for the last 37+ Years.
Are you thinking of selling your home? I am passionate about Real Estate and love sharing my marketing expertise!
I service Real Estate sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northborough, Northbridge, Shrewsbury, Southboro, Sutton, Wayland, Westboro, Whitinsville, Worcester, Upton, and Uxbridge MA.
