Selling a home appears easier now than ever before, but its still clear that hiring the right agent can make a HUGE DIFFERENCE in how the process goes, and what a seller ultimately gets for their home. Finding an experienced Realtor with a track record of success often times means a professional will go above and beyond the bare minimum level of service.
The level of confusion of a homeowner is inversely proportional to the length of time it takes that person to consult with a competent professional. Part of the problem is that home seller’s don’t always seek out a competent professional. The general public sometimes operates on the general assumption that anyone with a real estate license has the same skills.
The Game of Real Estate
The biggest problem for home seller’s is finding a competent professional. When it comes to real estate agents, we sound the same. We talk the same, have the same goals, want to help you the same way. Unfortunately, it’s mostly all talk.
When we had a stint with a big box brokerage, we saw firsthand how their major focus was teaching inexperienced agents how to sound experienced by using pre-written scripts, and encouraging dishonesty.
Classes on how to get listings didn’t even address the subject of how to successfully sell the listing. Subjects like staging, marketing, and negotiating were skipped in lieu of role playing / memorizing a script on how to win the listing through manipulation, wording and psychology. They taught individual agents to say they were a team or group (by saying that their building inspector, lender appraiser and insurance agent were all part of “the team”). In reality, they were just an individual.
All the tricks used made rookie agents seem like veterans and the big loser was the client that hired them. The traditional brokerage model where the brokerage is supported by successful closings was bypassed by making money by teaching classes, selling coaching, and recruiting more people into the business. Those that can’t hack it by themselves are scooped up into a team as buyer’s agents, to mislead the public again, by hiring a ‘top team’ to serve them, when in reality they’re just getting a beginner and/or part-timer in real estate.
Another part of the real estate game is what’s known as the limited service agency. These brokerages advertise themselves as ‘discount’, to make them seem generous. What they don’t advertise is how they pay out less money to buyer’s agents, and how they spend less money and do less work to generate successful sales. In some cases, they start collecting money upfront instead of getting paid when a sale successfully closes, so the need to sell the home becomes even less of a priority. Even when homes do sell, when an agent cuts corners to stay in line with commissions and expenses, home prices suffer!
How to Find an Expert
Finding someone skilled at home selling isn’t always easy. It involves math, and figuring out the variables. Successful agents typically sell at least $5,000,000 in home sale volume per year. A typical agent representing one ‘side’ would make half of the 6% commission, plus a small transaction fee. So 3% of $5,000,000 would be roughly $150,000 in revenue. Expenses and brokerage fees usually account for 20-50% of that amount, so the net pay may look more like $100,000, before tax and around $75,000 after taxes. On average, that looks like around 1.5 home sales per month. Unfortunately, most agents, regardless of how successful they appear, don’t do this much volume. That translates to mean that the majority of agents in the real estate field don’t have enough experience properly assist home seller’s prepare, list, negotiate and close on the sale of their home.
Finding an agent based on online reviews can be helpful, but in many cases, if they assist less than 15-20 transactions per year, they’re really not even full time Realtors. Sometimes people with minimal experience have glowing reviews, but if they only work with friends and family, they’re not reliable or honest reviews.
Finding an Expert Involves Questions
Talk to agents and ask questions. How many homes did they sell last year? Do they list homes, or just work with buyers? What makes them the ‘right choice’ to hire? Getting a feel for volume, location, specialties are details that help determine if an agent is worthwhile for your needs. Finding out what the agent does to promote your listing is crucial too. Do they hire professional photographers? What do they do to promote and sell? Do they help recommend simple improvements or value added features to attract more buyer’s or a higher price? Getting a good feel for the agents strategy, experience and background goes a long way to building a productive relationship and successful home sale.
Most professions require substantial education and training, and most professionals work full time in their trade. Getting a real estate license is largely teaching only the legal aspects of assisting clients and agency operations. The actual craft of selling homes, strategy, advertising and negotiations are not included in agent licensing classes. So basically, someone can be a licensed Realtor and know NOTHING about how to do the job. They can establish a relationship with a broker, and never attend a class or any form of training. Since “big box” brokerages are getting to be more and more a part of the industry, the old-fashioned brokerages that went to great lengths to train their agents are being abandoned for brokerages that charge lower fees and do little to nothing as required training. Supervision and training is almost non-existent in some cases, so it’s a dangerous proposition to hire an agent without proper evaluation.