When you begin to think about selling your property you will no doubt find that all the real estate agents are keen for your business. Gone are the days of 'multi-list' which was a popular system 20 years ago in Australia that allowed any agent to sell your property regardless of which one you chose. These days instead, the most common type of selling arrangement between real estate agents and sellers is an Exclusive Agency Agreement. This means you will now need to decide which agent to put in charge of the entire process from completing documentation through to marketing, viewings, negotiations and ultimately the sale. Because your high value item is on the line, making the right choice of agent is crucial.
I have been selling properties as an estate agent for nearly 20 years and one of the questions I I like to ask people is why they chose their real estate agent. The responses I have heard over the years have varied wildly to say the least! Some people put a lot of effort into researching agents and other people just sign up with the first agent that comes along thinking that we are all the same. Let me tell you with complete confidence that we most certainly are not all the same and a little research into the individual agents service and results is a worthwhile use of your time given the amount of your money you stand to lose or gain. I frequently meet sellers that say they would never use the same agent again.
The agent you choose will have a complete bearing on the result you obtain for your property and the result will ultimately be a reflection of the agents expertise, experience, motivation, and attention to detail.
Thankfully decent real estate companies spend time and money training their agents with the aim of helping them reach their full potential. They want their agents to provide the pinnacle of service and obtain the best results for their clients thereby strengthening their company's reputation. Other companies sadly have no strategy around training and development of their staff and simply rely on the individual to perform. It is true however that despite the best companies efforts to train their staff to be productive, or the lack thereof, it is ultimately the individual person who is really going to make the difference in your sale. These true differences between agents are difficult to detect at first glance because all agents appear at the surface to present well with a glossy brand name, are attentive and likeable. (I hope at the least!) It's not until you begin to scratch away at the layers though that you begin to see who is just a 'veneer' and who is the 'real deal'.
So how do you pick the good from the bad when they all seem the same? It's not one thing alone but a combination of elements that causes an agent to lead your property to a great result.
Let's briefly discuss appraisal prices. We have all heard the story about the sellers who fell for the agent who priced their property too high just to get the owners to sign up and it has either not sold or they had to reduce the price to get people to look at it. Or the one where they went with the agent with the lowest costs but then they didn't get what they expected. I have come to understand that many home owners naturally have a high expectation of the value of their home. They bought it over and above all the other options out there at the time when they purchased, they outbid the other buyers and have invested in it financially and emotionally ever since. They also know the benefits of living there better than anyone else so it is expected that sellers see value that the potential buyers may not. Agents understand this dynamic and many are notorious for telling you what you want to hear instead of what you need to hear.
The best agents however will have the hard chat with you at the start of the process, and not at the other end when it is too late. You see, you only get one chance to impress the market, build competition and negotiate a fantastic sale. You can put all the rest of the right ingredients in but with the wrong price, the sale will fall apart.
Before we discover how to choose your agent, let's define what a great result will look like. I think it looks something like this;
A reasonable length of time on the market will mean your property will remain fresh in the eyes of buyers whilst the energy and enthusiasm surrounding the sale from buyers is at its highest point. This energy around the sale is not infinite and can be built into momentum and competition by a good agent who can draw the price up. Properties that sit around on the market without any actions being taken wastes your precious time and when taking into account ownership costs and reduced competition, can reduce your overall net price. You can assess the agents average time on the market by monitoring their auction success rate (or pass-in rate), their average number of days on the market and if any price adjustments were needed to get their listings sold.
The level of trust between the seller and their agent has the potential to unhinge the sale or to propel it to record-breaking levels. Agents need to earn the trust of their seller and can do this by being upfront, honest and by striving to look after the best interests of the seller, beyond their own need to earn a commission. Whilst most agents are just looking out for themselves, the best agents go to work every day with a candour knowing that all they need to do is be completely honest with the people they come in contact with and great results will follow. I would suggest this book which covers 'trust' in our daily lives which is particularly important in my industry. It is equally important that your agent can trust you as well as trust must be mutual to have its effect. This means being honest with your agent about your situation, your goals and your expectations.
Notice I said best 'net' price. This is the price you receive in your hand after your expenses are paid including improvements, advertising and commission etcetera. If one agent is charging you a commission of 1% and other is charging 3%, which is better? The one that gets you the best net result of course! If the agent charging you 3% gets you $30,000 more for your million dollar home than the 1% agent does, he is still the cheaper agent as he has obtained for you a better net result. Not that you will necessarily need to pay this rate to get a good agent working hard for you, but given the vast difference in the competency of agents, it should not be the defining point of which agent you choose.
The art of negotiation is sadly not a skill that is trained into agents who join the real estate industry which I think is peculiar because it is the main thing that defines one agents' ability over another to help you achieve the best net price. Quality agents understand the elements of negotiation which are time, information and power. When negotiating, most agents go directly to price before gathering the intel and information needed to understand the time pressure situation of the buyer that is motivating them to make an offer or participate in your auction. Negotiations based purely on price usually end up with a compromise with both parties feeling rather unsatisfied with either a win/lose, lose/win or lose/lose outcome. I recommend reading this book by Dr Stephen Covey which explores outcomes in more depth and how to achieve a win/win. The best agents will discover from buyers far more information than just the price they are offering. What other properties have they seen or attempted to buy? What price were they prepared to pay? What is their budget range? What is their motivation around time? Have they sold their current property yet? Are they hoping to enrol the kids in the local school for the next semester? Have they been looking for 2 days or 2 years? Are they the type to consider the purchase carefully or just jump straight on it? Smart agents understand that the power shifts back and forth during a negotiation and do not try to use power to dominate the buyer into submission. "The vendors are not going to sell it to you unless you pay $x!" This type of negotiation rarely works except in some exceptional circumstances. Power is what moves your property from 'on the shelf' to SOLD! This book by Herb Cohen explores time, information and power and if you read it, you will be head and shoulders above just about any real estate agent out there!
It is in your best interest to carefully gauge the agents capabilities in all these areas as there are large sums of money at stake. Remember that there are many veneer agents aiming for your listing that can and do sell properties every day. On one hand these agents may present you with some options as a buyer of property. Yet on the other, it's your choice of agent for your own property that will determine the result you obtain. It's how they create by design your experience on that journey that will determine your enjoyment of the process, your success and how much cash you have in your pocket for your next home.
For all real estate related information or advice, contact the author Simon Wendt, Licensed Estate Agent at Hockingstuart Mentone on 0407 040 706.
