Over time I have encountered several sellers who are evaluating real estate agents to hire. Unfortunately, few know what to look for, and there’s tons of bad advice online. Here are the top mistakes when selecting a listing agent.
1. Going with the agent that promises the highest sale price
Unethical agents know that sellers want to make as much money as possible and deliberately throw out a high price to secure your business. Supply and demand are the primary mechanisms that determine the price you will get for your home. Yes, a bad agent costs you money. It’s because they drop the ball and let buyers walk away or can’t negotiate deals. An overly optimistic agent also costs you money. Realistic and pessimistic agents value price listings which incite bidding wars. The key to getting a great price for your home is making buyers fight with each other rather than with you, the seller.
2. Going with the agent with the low commission
Part of what makes a real estate agent so efficient at selling a home is they give away half of their commission to any cooperating agent that brings a buyer. Remember, buyers don’t pay commission. This way they crowdsource the networks of every agent in the area and attract the maximum number of buyers to your home. If a listing agent charges less commission, there’s less to go around for the buyer’s agent. This disincentive is multiplied by the size of the buyer agent network and can cost you the buyer who is willing to pay full price for your home.
One real estate company likes to boast that their agents are salaried and paid a bonus based on your satisfaction. They pay their employees a low fixed wage and pass the “savings” onto you. The bonus these agents earn for going above and beyond maxes out at $1,000. Who do you think is more motivated to delight you, someone who earns a mostly fixed paycheck, or someone who gets their business through word of mouth from clients who are truly impressed by the service they get?
3. Being dazzled by shiny presentations and websites or stats about closing huge numbers of deals
My advice to you is to look at how much time the agent is spending on selling themselves and compare it to how much time they spend on serving their clients. Yes, you should work with an agent that’s professional and knows what they’re doing. You also want an agent that pays attention to you. Agents that serve a huge number of clients will be passing you along to their assistant who does all the real work while the agent is busy promoting themselves. The agent that spends more time with their clients than finding new ones will outperform the agents who spend most of their time generating business for themselves.
Who should you hire?
The one thing in common all great agents have is that they work hard to serve you as a client. They research your property and neighborhood, present you facts to help you make informed decisions, and make time to work with you and answer questions. A good agent takes time to understand your needs and customizes what they do to best serve you. They take pride and find joy in what they do and are truly interested in achieving the best outcome for you.