Expert: Dennis Herman - 2/9/2009

Question
Hello,
     I have been talking with a Realtor here in Las Vegas, who has been giving us some very shady advice, regarding our home and how to liquidate it. This person is a member of the "Santa Clara Reality" in San Jose. Any options or suggestions would be greatly appreciated. Regards-Skyler

Answer
Great question.  I wanted to do a write up on how to choose a great Real Estate Agent.  I always say, "we could have the easiest job in the world if everyone would do their job."  That goes beyond Real Estate Agents.  To bring a transaction to a successful closing it takes a team effort.  There are normally two Real Estate Agents, one for the seller and one for the Buyer.  There is also a lender for the buyer.  The title companies, an appraiser, in most cases an inspector, and of course there are the seller and the buyer.  Each has at least one job to do.  You are asking about information on the Real Estate agent that will represent you, the seller, so I will concentrate on that area.

Think about this statement.  The Real Estate agent will represent you.  Which means they will be the first contact in every step of the transaction.  That should give you a clue as to what to look for in choosing a personality that will best reflect your goals. If you want to sell quick at any price you may want an aggressive Agent. If you want an agent that will negotiate for top dollar you may want an agent with a more persuasive  personality.  One that will be more low key, that always has a plan B and C in place ahead of time.  A personality that attracts people.

Choose a personality that you will get along with.

Choose an Agent that will present your property and interests in a professional manner.  

What are their marketing skills?  What imaginative marketing have they used for problem listings in the past?

Do not be hasty and sign with the Agent promising the highest list price.  You set the price, they sell the property.  Three major conditions will determine how quickly your house will sell.  They are location, condition and price.

Look for an Agent that is open and honest with you.  Unless your house is mutinously maintained, has all the major updates and is spotless inside and out, a good agent should provide ideas for improvements to prepare your property for showings.  Pay attention to how they handle this situation.  Chances are if they are rough and vague in their communication they will also extend this type of personality to other agents and buyers.  Listen and pay attention to how they explain the defects they find in your property.  Attention to detail is an important trait in a good Agent.

After taking the Agent through your home ask them how they would show your home.  Chances are they will not be viewing other homes for buyers before they take them on a showing.  For most agents the first time they see a home is when they walk through the door with the buyer.  Agents have to train themselves to think quick and point out the best aspects of the property.  After looking at your home they should have a mental picture of how to present your home to buyers.  Ask them to take you on a tour of your house and pretend you are a buyer.  This will show you how quickly they are able to think on their feet.

The best agents will ask you to go out and see other houses in the neighborhood.  This will give you a chance to size up the competition.  Think about it, this is the only way to set a logical market price on your property.  You can not judge the condition of the competition based on paperwork.  I have never sold a single property based on looking at the computer screen or a printed copy of the spec sheet.  Every property I have sold has been viewed by the buyer.  They have to walk through a property to determine the value.  Every buyer I have worked with has viewed a number of properties before they felt comfortable with a price.  Why would you set a price on your property without having personally viewed other properties on the area?  This is what every buyer is going to do before making an offer.  

Experience may not be a determining factor when choosing an Agent.  The Internet has been the preferred method for home shopping for years.  Make sure you choose an Agent that is familiar with the use of the Internet and has control of their own web site.  Ask where they will be advertising your listing.  Many of the younger agents may be better at using the Internet because that is all they have known.  They do not have old habits to break.  Look for an Agent that has a knowledge of this new technology.  You may want to ask them how this has changed their business plan and what changes they see for the future.

Take notes.  It is easy to confuse agents and issues after listening to them talk for some time.  This is part of what they do for a living.  

Question the commission.  A smaller company may be able to give you the same or better service at a lower price than a big company.  The size of the company may seem like security for some but Real Estate Agents do not pose a threat of losing your money as a company doing repairs on your home.  In Wisconsin Brokers will not generally ask for any money up front.  In all the cases I have seen the commission paid at closing.  The only exception I have seen is the for sale by owner Brokers that require an upfront fee paid for their services.