Qualifying a Listing Agent
(What Haven’t I Asked That I Should?)
I’ve seen too many people hire an agent based on little more than appearance and a gut hunch. This is too important of a financial transaction to only go with your gut. I suggest you put together a plan that considers three or more agents and uses pertinent questions to make the best decision. Whether you’ve sold one home or a half a dozen, it’s usually been several years between each one. One of your first questions should be to simply have the agent refresh your memory about the overall sales process. If you’ve sold before, you’ll probably recall the basic steps quickly so most of your time can be spent on any rule and regulation changes and what those changes mean to you?
Interview Listing Agents
Ask questions like how long the average listing stays on the market and what types of homes are selling for the highest/lowest prices? There should be a lot of information about to your local neighborhood. Are 2, 3, or 4 bedroom homes most in demand? Do buyers want split levels or ranch style or basements (finished or unfinished)? But you don’t need to know everything about every sale for the past year. Focus on the information that is useful to you.
One thing you should ask about the neighborhood is the general direction prices are going? You want specific information about prices for the past 3 to 6 months and things like if purchase agreements have been full offers or less than the asking price? If a significant number have been less than asking price, you want to know how much less (5% less, 10% less)? At that point, ask the agent how his/her recommended selling prices have done (average list price to sale price ratio)?
Also, ask about his or her marketing approach for your neighborhood. What’s been tried in the past? What worked well and what might not be a good approach? When is the last time a new approach was tried and especially for details about marketing your specific home?
Be Specific About Your Own Home
If you haven’t already, set up a face-to-face meeting with the agents on your short list. Plan to spend close to an hour with each. I’ve seen sellers simply hand over a written list of questions to be answered but you really should engage in a conversation to learn communication styles and to ask follow on questions when needed.
Although you don’t simply hand over a list of questions, you should have questions prepared as a guide.
- What is the marketing strategy? Besides the MLS, will an online video tour be used? Where will videos, photos, and other marketing materials be posted online besides through the agent’s website? What are the other elements of the marketing strategy? Ask to see marketing materials from other listings as examples.
- What makes them different from competitors? A good agent knows his or her strengths and weaknesses. It could be marketing, industry contacts, communication, negotiating, or something else. He or she should be able to quickly rattle off three or four. At a minimum, you want an agent who is honest, trustworthy, and assertive. They should also have a plan to bolster weaknesses.
- What marketing changes will be made if offers aren’t being written within 30 or so days? Most listings are for 90 days. If you don’t see any action within several weeks, you probably want a “plan B.” Plan B should be more than just reducing the asking price.
- Will the agent be able to help you understand the pros and cons of different purchase offers if more than one comes in? You probably want to dig a little deeper into the agent’s knowledge and resources regarding mortgage loans and lenders. Interest rate volatility can affect even a prequalified buyer’s ability to close the deal. A good listing agent can rescue a faltering deal when they’re financially wise and well-connected with quality lenders.
Ask about the agent’s statistics. Agents should know their numbers. At least ask about his or her list-to-price ratio. This is the final sale price divided by the most recent listing price. Another important statistic is the average number of days on the market.
Once the agent has seen your home, ask what small improvements will help achieve the highest sales price. Also, ask for staging advice.
Ask any other questions that are important to you.
Along with asking other important questions, before signing a listing agreement, you should ask the commission amount, terms, how long the agreement is for, and if there is a cancellation fee. Read the entire contract carefully.
The commission or compensation certainly shouldn’t be the only criteria for deciding on a listing agent but it should come up in the discussion before making the decision. Other things you want to consider include the agent’s specific plan for marketing your home, experience level, and recent success selling homes similar to yours.
I encourage you to continue reading our blogs for valuable information about the real estate market in the Atlanta area and for more specific information about listing your home.
If you need more information or have questions, please contact us. You can also reach us by calling at (678) 570-8123. We'll be glad to help you!