What do you need to know when it comes time to sell your house? Maybe you’re ready to downsize after the kids have grown. Or perhaps you’re family is growing and you need more space. No matter the situation, here are 10 questions to ask before hiring a real estate professional to help you sell your home.
Why Work With a Real Estate Pro in the First Place?
The idea of putting up a “For Sale, By Owner” sign has obvious appeal because there’s no commission to pay. But most buyers themselves typically use agents and a buyer’s agent might hesitate or even refuse to show your property unless another professional is helping to make a deal happen.
“There are only two reasons why I show an FSBO: Either there is no other inventory available, or the price is ridiculously low,” said Bruce Ailion, a realtor with RE/MAX Greater Atlanta. “Many experienced brokers have been burned by an FSBO transaction where the seller did not pay the full, agreed commission, or any commission at all, to the agent who brought the buyer.”
It’s within a real estate professional’s self interest to spread such opinions, but it also reveals a big risk when going the FSBO route. Being guided by a professional, especially if you are selling for the first time, makes a lot of sense.
Is Your Real Estate Professional a Licensed Agent, a Broker or a Realtor?
There’s a difference—in qualifications required and services offered—among agents, brokers and realtors, even though the terms seem to be used interchangeably.
- Agents, also called associates, are a starting point for real-estate professionals who have passed all required real-estate classes, along with any state-mandated licensing exams.
- Brokers have additional qualification requirements, but can also work as agents on their own.
- Realtors are members of the National Association of Realtors, who abide by association standards and practices, and agree to uphold a code of ethics.
Why Is Real Estate Licensing Important?
There are other positives to using an agent. Most of the reasons have to do with saving money. Specifically, agents can help you:
- Keep your own emotions out of the bargaining process
- Save time; it’s often time consuming to sell and buy property
- Find a bigger pool of buyers
- Weed out unserious buyers who are “just looking”
- Analyze the positives and negatives of your property
- Protect clients from lawsuits if something goes awry
Licenses also a certain amount of protection for consumers via authorities such as the Better Business Bureau. License requirements for real-estate professionals vary from state to state. While academic degrees are not necessarily required, they still can be helpful:
Completing a degree gives agents a solid foundation in the basics of buying and selling of real estate, allowing you to make more informed decisions about properties, mortgages, interest rates, and stay on top of the latest trends in the industry.
In addition, holding a degree often makes potential agents more attractive to real-estate brokerage firms.
Here’s a recent list of real-estate agent requirementsfor each state.
How Long Has the Agent Been in Business?
Experience matters. It’s likely the more sales an agent has completed, the more they have learned about the business—what and how to do it, and what to avoid. Inexperienced agents might have more time to concentrate on selling your house because they haven’t stockpiled clientele. But they also haven’t been around the block (literally and figuratively) as much as you might like.
What Strategy Will the Agent Use to Sell Your Home?
With occasional exceptions, there’s more to moving property than sticking a “For Sale” sign in the front yard (although that could be part of it). What is the strategy? Where and how frequently will your agent advertise? Is it appropriate to use direct mail? What about online marketing? What steps do you need to take to prepare your home for sale? On that note: What about the house’s physical condition to improve to help its potential for sale?
How Good of a Negotiator Is Your Agent?
Real-estate markets fluctuate. There are “buyers markets” and “sellers markets” that depend on all sorts of economic factors—interest rates, notably—but there are many variables. An agent’s list-price to sales-price ratio can be a helpful statistic to know. A strong listing agent should have a track record for negotiating sales prices close to list prices—the closer to 100 percent, the better.
Can the Agent Help Find Other Professionals Who Are Necessary to the Sale of a House?
Mortgage brokers, home inspectors, title companies all are part of buying and selling a house. Agents should be able to supply you, in writing, with a list of vendorswith whom they work, along with reasons why they endorse these particular professionals. A word of caution: “Affiliated,” could mean the agent and their broker receive compensation for using a particular vendor, which means you could be paying a premium.
In addition, get an advance copy of any legal documents is helpful to being better informed.
Can the Agent Produce Referrals?
If the agent has many online reviews, this step might not be necessary, but no matter how you do it, it’s important to research an agent or agency’s references to inform your opinion. A questionnaire should give you a good start on how to go about doing this.
What Does a Real Estate Agent Cost?
It is said that sellers typically pay the freight when it comes to real estate commissions, which tend to be 5 to 6 percent of a home’s purchase price. While it’s really a technicality based on how real-estate transactions work legally, fees split between the agents of buyers and sellers typically do come from the seller’s end, which obviously impacts what the list price will be. Therefore, knowing what a listing agent charges becomes an important consideration.
What Topics Might I Have Forgotten?
Selling a home is a process. It’s possible that during your first meeting you might not have all of your questions resolved with answers. Or, you might come up with more questions as the process unfolds. Being comfortable with an agent who listens is vital. It’s especially true if you’re in the process of selling one home and buying a new one. Will your agent be able to answer all your questions to your satisfaction?