Choosing a real estate agent to sell your home can be daunting, especially if you are a first timer. Pick the wrong agent and the experience has nightmare potential.
A survey by hockingstuart of 500 potential vendors found 90 per cent would shortlist at least three agents rather than choose the first one they approach.
But how do you find the ideal agent who can get the best result? Industry experts suggest five key questions you can use to interrogate your top three.
Do you have recent comparable sales?
Before handing over your most valuable asset for them to sell, you want to make sure the agent is an expert in the area and has a good record of conclusive sales.
And since the property market is fast changing, Bayside auctioneer Nick Johnstone says it’s important to request the latest data.
”You need to ask the agent to show you some really recent comparable sales to establish what price you should set,” he says. ”Look for an agent who has had great success and a good network of buyers in that area.”
Agents who drive the flashiest cars or wear the sleekest suit don’t always translate to being the most successful.
How much is my property worth?
The temptation for many vendors may be to go with the agent who promises the highest price or charges the lowest commission. But it’s a common pitfall that could set unrealistic expectations.
Ray White chairman Brian White says the best agent will explain the process and factors that could influence the price expectation.
Poor communication could also lead to a missed opportunity. ”If the discussion between the agent and the seller has been not substantial, that really good offer may go unaccepted,” he says.
”The final offer that the vendors do take up can be in some cases quite significantly less than that opening offer.”
The agency estimates around 35 to 40 per cent of vendors accept an offer less than one they have previously turned down.
What is your marketing plan?
Now that you have established a price range, do you take your property to auction or sell through private treaty?
A good agent should be able to tailor a method and marketing campaign to suit the vendor’s situation.
As the best agents may charge a little more, WBP property advisory’s Sam Spernat says selecting an agent based on their fees can be dangerous.
”Higher prices may be associated with other advertising expenditure to give your property greater exposure,” he says. ”But not all advertising avenues are appropriate or necessary for every property so ensure you review the proposed marketing campaign carefully.”
Vendors should compare sales proposals, not only appraisals, from a number of agents to gauge the value of their service.
Who will be selling my property?
It’s also important to clarify how active your chosen agent will be in the process of selling the property.
Mr Spernat says vendors should ensure their agent will be the one hosting the open home inspections and following up with potential buyers – not their personal assistant.
As a part of the audition process, he also recommends being a secret shopper by attending a few of their auctions and opens.
And while knowledge and experience of the local area is essential, these traits alone are not enough to achieve the best result. Mr White says it’s also important to look for someone who has shown enthusiasm and has taken the time to understand the vendor and the property.
What is the fee structure?
Many agents now offer an incentive-based commission structure rather than a flat percentage fee.
On top of a standard rate for every dollar up to what the agent thinks the property is worth, the vendor may agree to pay a higher rate for every dollar that exceeds their expectations.
Despite the extra incentives for the agent to work harder, Mr Spernat is not a fan of the kicker-based structure.
”Some of them will try and talk a property down … so they make the larger commission,” he says.
But hockingstuart chief executive Nigel O’Neil says both fee structures could work with a good agent and that underquoting is unlikely when vendors are comparing several proposals.
Instead, Mr O’Neil says it’s important to look out for warning signs such as low commissions or a ”no sale, no charge” arrangement where the agents absorb the cost of the advertising.
”They’ll take shortcuts to try and make sure that the costs incurred by the agency are so low that if there’s no sale, then there’s no loss for the agency,” he says. ”The whole campaign will be of a low quality.”
If the agency has a low volume of sales, it could also mean it does not have a large database of potential buyers to achieve the highest price for your property.
February 2, 2014