Selling Home
Choosing a Broker
Wisely
You
can save a ton of money if you opt to sell you home without a broker. But
are you able to go it alone? Sometimes it makes more sense to hire an
agent. Do you need to sell your home fast? Do you not have the time to
devote to selling you house yourself? If
you're look to sell fast and
hassle-free, a real estate broker is your only option. But don't just pick
the first one who walks in your door and tells you your house will sell in
no time. Here's how to find a good real estate agent:
First of all, look for someone who
has a strong track record with similar homes in your neighborhood. Some
brokers specialize in trade-up homes while others sell starter homes or
focus on luxury communities. Ask friends and neighbors for referrals and
start making a list. You probably have a sense of which firm has the most
market share, especially if you've lived in an area for a while. It might
be a good idea to attend a few open houses one weekend and see some
brokers in action. Don't be tempted to give your listing to a friend. It
can lead to conflicts and can easily backfire since disputes with brokers
are common.
It's a good idea to conduct phone
interviews with brokers. A top broker will have lots on information about
your particular market, as well as community information on the schools,
taxes and local transportation. Look for a broker with at least four to
five years of experience, but don't rule out a newer broker because he or
she may devote more energy to your sale and be more negotiable on the
commission. Whomever you choose should have access to and feel comfortable
using your area's Multiple Listing Service (a database of all available
properties that brokers use to find homes to show to buyers). It is ideal
to find a broker that is willing to split the commission earned with
another broker who brings a buyer to the table.
It may be beneficial to become familiar with
the different titles that real estate professionals may have. There are three different
distinctions:
1) All real estate "agent"
must be licensed by the state but requirements vary.
2) A real estate "broker" has passed
an additional test that qualifies them to run their own office.
3) A "realtor" is an agent or broker
who has promised, as a member of the National Association of Realtors, to
adhere to a code of ethics.
It's always a perk if you can find
someone who will give you a break on the commission. If yours is a
seller's market, you have some room to negotiate. Tell brokers that if
they want your listing, they'll have to lower their rate by a point or
two. This may not sound like much, but one percentage point amounts to a
33% cut in pay for the broker, assuming they will split a 6% fee with
another agent. If it is a buyer's market, you may have less room to
negotiate the rate. You will need to be more creative to get a break. Try
offering the agent and "exclusive" -- that is, let them show the home for
a couple of weeks without putting it on the MLS. That way if the agent
sells the home he or she won't have to split the commission with another
agent. Agents are also willing to bargain if you own a high-priced home,
or if you are moving up to purchase another home through this same agent.
You might also consider a discount broker. With a
discount broker you can expect a lower level of service, but these agents
will take a flat fee or reduced commission. More and more
people are opting to use a discount brokerage. Some will provide some
services like a listing on the MLS and dealing with negotiations with the
buyer, while leaving showing the home up to you. The main issue is that
other agents don't work well with discounters so you can expect less
traffic through your home. Never-the-less, if you go with a cut-rate
broker, be sure to check their track record.
After you've narrowed down your
list, it's time to ask the top three candidates to walk through your home.
At the first visit they should present their qualifications and explain
their typical approach. The also need to interview you about your goals
and expectations for the sale. To give you an idea what terms you will
agree to, ask for a copy of their typical listing agreement. Don't be
tempted to sign right away. Ask for referrals from the last three sellers
they've worked for and interview previous clients about their experiences.
It's nice to know if they would work with that broker again.
At this stage, your top brokers
should be prepared to make a formal presentation, giving you a detailed
marketing strategy that describes their plans for promotion, open houses
and reaching other brokers. You should also get a recommended list price
for your home and an estimate for the amount of time your house will stay
on the market. Your suggested price should be based on comparable sales in
the neighborhood. Don't automatically chose the broker who gives you the
highest price - it may not be the right price. Some brokers will set an
unrealistic price just to get a listing, and then ask you to lower it
later.
Until you actually sign the listing
agreement, you can't be sure you've found the right sales agent. Sometimes
you may need to alter the agreement a little. For example, you want to
maintain the right to take the property off the market for any reason, to
switch brokers or cancel the agreement without consequence if you are
unhappy with the broker's efforts. The duration of the agreement should be
90 days. It's also best to only have a six-month period where you would
owe this broker a commission if someone they showed the home returns to
buy it later. The listing agreement should also include the agreed upon
commission, description of the marketing plan and discuss receiving
offers.
Until closing, your agent should
agree to continue to show the property to any interested buyers as a
"pending sale property."
All this effort and work will be
worth it when you put your house on the market. When you choose your
broker wisely, the selling process will be fairly hassle-free. Your agent
should earn his fee and a good broker will make you feel like it was
deserved.
