Hiring an experienced and well-organized real estate agent can help you sell your property very easily. There are certain things which you can preferably do in order to pull back the curtain and accurately check a real estate agent’s performance and potential success in selling your house within a stipulated period. Some Discount Real Estate Brokers can even save you money on your real estate commission. So, if you are planning to sell your house, have a look at the following checklist to hire a good real estate agent who can sell your property quickly and at the best rate as per your demand.
Talking with the recent clients– It is wise to ask the shortlisted real estate agents to provide the list of the clients along with their contact information whom they have served in the past year. You can call up these past clients and check the performance of the concerned real estate agent. This kind of first hand reference check may fetch you the real picture.
Looking up the licensing– You should ideally inquire whether the concerned real estate agent is licensed to do the business. The state’s regulatory board can be checked in order to find out the same and also if there were any disciplinary actions or complaints against the concerned real estate agent.
Picking up the best– You may inquire if the concerned real estate agent has recently received any award or token of appreciation for his work in the recent past. Checking on this can be really helpful in picking up the best real estate agent.
Selecting the agent with the right credentials– You may wisely check on the actual credentials of the real estate agent. There are certain designations which the real estate agents may use such as CRS (Certified Residential Specialist) which means that the concerned individual has completed the additional training in handling the residential real estate. ABR (Accredited Buyer’s Representative) is one who has completed the additional education in representing the buyers in a particular transaction.
Researching on how long the agent is in the business– You can easily find out the detail regarding the time period that the real estate agent has been selling the real estate from the respective State licensing authority.
Benefits of hiring a real estate agent for selling your home
There are some great benefits of hiring an efficient real estate agent to sell your home. Some of the major benefits are as follows:
The real estate agent is a professional with several contacts and good network. So, there are maximum chances that a real estate agent may be able to fetch you a great selling price as per the prevailing market trends.
A real estate agent also will be able to sell your home more quickly than you yourself can.
There is minimum risk involved as the real estate agent will get paid only when he will successfully sell your home and get the payment for you from the buyer.
The real estate agents also acts as a legal buffer in multi millions dollar transactions.
When I began thinking about buying my first home, the thought of hiring a REALTOR made me cringe. I always disliked salespeople. All of them. Any time I’d walk into a furniture store and catch the salesperson out of the corner of my eye (it was important to avoid eye contact), I’d embark on a mission of trying to elude him (not to be sexist, but I’m going to refer to everyone as male in gender just for the sake of simplicity in this article) for as long as possible, ducking and dodging until, inevitably, he’d finally catch me somewhere and ask if I needed help. “Well, no, dummy. If I needed help, I wouldn’t have been running from you for the past twenty minutes.”… I’d think to myself. “No thank you, I’m just looking”, I’d say, hoping he’d vanish into thin air like the vampire he was. Needless to say, I despised anyone in sales.
My Strategy For Buying A Home
So when the time came to buy my first home, I decided, since I hated salesmen so much, I decided to become a REALTOR first and just buy my home myself. Seemed like a brilliant strategy. Now, knowing I didn’t know as much about real estate home buying as I needed to know, I thought it would be best to sell a few homes first, just so I knew what the heck I was doing. After all, I didn’t want to be responsible for making my own bad real estate deal first. So I began listing and selling homes. One thing led to another and I quickly became a top-producing agent in my real estate company. I probably sold a dozen or more homes before finally buying my own house. Was it a good strategy? Maybe, maybe not… but I learned some very valuable lessons by doing it myself. Most importantly, having an experienced REALTOR to help you buy or sell real estate is VERY important.
Did my opinion about salespeople change? No, not really. I still run from the guy in the furniture store. But admittedly I learned some valuable lessons about REALTORS that I think most first-time home buyers or sellers need to know:
There’s a lot of risk involved with buying and selling homes. There are countless legal requirements that must be navigated before a home can be bought or sold. If you don’t know what you’re doing, lawsuits can and do happen, and you really don’t want to be on the receiving end of one.
Knowledge of the local real estate market, trends, and customs is very important to getting the best deal possible. This includes networking with other real estate professionals.
A REALTOR really can negotiate a better deal for you than most home buyers or sellers can negotiate on their own. Being highly trained in the art of negotiations, a REALTOR’s skill frequently pays off.
Buying or selling a home requires a LOT of hard work, knowledge, and training. Much more than I ever thought.
An experienced REALTOR can help you AVOID preventable problems. For more insight into this one, refer back to #1.
In any real estate sales transaction, there is no such thing as an “As Is” sale. If you don’t understand this, ask a REALTOR.
If a home purchase transaction is going to break down, it’s going to happen waaaayyyy later than you think it will. This, again, is where an experienced REALTOR can help you avoid problems and/or save the day.
REALTORS work hard. It’s not an easy profession; it’s expensive and very demanding. Their commissions are well deserved, even if their paycheck is larger than what you spent on your last Disneyworld vacation. So don’t get upset if your REALTOR doesn’t discount his or her commission or give you a cut of it. They’re earning every penny of it.
Going alone doesn’t always save you money. When a home owner sells “For Sale By Owner” (FSBO), the buyer knows the owner is trying to get a deal and the buyer wants to get in on that deal too. For Sale By Owner properties often result in a lower sales price than if a REALTOR negotiates the deal.
Most importantly, in Real Estate, and unlike the salesman at the furniture store, all REALTORS have a FIDUCIARY DUTY to you, which means they have to put your financial interests FIRST. This differentiates REALTORS from most sales related professions, as they are legally required to maintain their relationship of trust with you. It’s not something they can choose not to do.
So in the long run, I went on a long and personal journey to learn some valuable lessons. Having an experienced REALTOR to help you buy or sell your next home really is important. If REALTORS weren’t needed, well, they just wouldn’t exist. REALTORS really aren’t slimy salesmen just looking to line their pockets with your hard-earned money. They have a Code of Ethics they have to abide by. They have ongoing education requirements. They dedicate countless hours to their clients, many times working late nights, most weekends, and many holidays. They sacrifice time away from their family to help you build yours. They give from themselves to help insure your experience in buying or selling a home is a good one. They are distinctly different from the guy at the furniture store or the slick-talking used-car salesman. They must put your interests first. That is why you should always use a licensed REALTOR to help you buy or sell your next home. Trust me, I’m a REALTOR, and I learned these lessons the hard way.
Today, anyone looking to purchase a new home utilizes the internet to search for homes for sale. The most trafficked real estate website in the world is Zillow. We will explain to you why you should NOT use Zillow when interested in real estate.
Bigger Doesn’t Mean Better
When searching online for real estate, you want to get the best information possible. Many people are under the impression that because Zillow has become so popular, they are the best place to find homes online. Truth is, Zillow has a ton of outdated real estate listings. Many of the homes for sale that Zillow shows as Active, have either been sold, expired or possibly even listed with a different real estate agent. In addition to the tons of incorrect listings, Zillow has big holes in their listing database. The fact that they don’t have all of the listings, means that their infamous “Zestimate” is usually woefully inaccurate. Many home sellers rely on the information provided by Zillow to price their home as well as get some insight on the level of competition that they will be up against. Its not uncommon for a home seller to throw a Zestimate up to a potential listing agent when discussing the true value of their home. In reality, according to Zillow themselves, their Zestimate is only accurate within 20% of the final sales price 83.1% of the time! Wow…on a $250,000 home, that is over $40,000 off! And that is for the properties that ARE within 20%. Think of how inaccurate it is for the 16.9% of homes nation-wide that fall OUTSIDE of the 83.1%. You can read how accurate Zillow claims they are in your area by clicking here.
How Can Zillow Be So Inaccurate?
Its important to keep in mind that Zillow is NOT a real estate broker. Zillow is a marketing company that has chosen real estate as their vehicle. Zillow sells advertising to real estate agents and brokers based off of the traffic they receive (which is a lot). Since they have a huge portion of buyers searching for homes for sale, they can sell the leads that they generate to local agents and brokers. Although I am confident that Zillow would LOVE to have a more accurate listing database, truth is only local real estate brokers and agents have direct access to the MLS. The MLS (Multiple Listing Service) is the local database of ALL homes for sale by all real estate brokers. In some instances, national sites do get direct access to the MLS, but that is not consistent across the country and in many instances, local brokers opt out of syndicating their listings to Zillow. Lastly, most property management real estate brokers don’t take the time to upload their rental listings to Zillow, so their database of rentals units for sale is abysmal.
Real Estate is Local
Although having one huge website that you can search all of the available properties for sale in the US is a nice idea, Zillow falls short. Real Estate is still local. What I mean by that is when you are ready to buy or sell real estate, you will still end up with a local REALTOR working for a local real estate broker. Searching real estate online should be local too. Whether you are searching for homes for sale in Granbury Tx or searching for homes in Lakeview New Orleans, you expect to see all of the listings. Only a local real estate broker can provide that since they have direct access to the full listing database of all listings. Even if you do search for local listings on Zillow, when you request additional information, they are simply selling your contact information back to a local agent. Why not just start with the local agent?
How Do Local Agents & Brokers Get Listings?
As previously mentioned, local agents and broker have direct access to the MLS. Most of the time a local agent or broker has a website, they get an IDX data feed directly from the MLS. IDX stands for Internet Data Exchange and is an agreement between all of the local real estate brokers that allow them to display each others listings on their websites. So when searching for properties, if you use a local real estate site, you will see every listing available.
How Does Zillow Get Listings?
Zillow gets listings on their site a variety of different ways. Most of the time, they are relying on the individual agent or broker to send them to them. In many instances, that may mean that an agent must manually input each filed of data for every listing. If the property gets a price reduction or gets sold, the agent must then log back into Zillow and update the property information. You can see why many of the homes on Zillow are no longer active or are priced at the incorrect price. In some instances, they do get data feeds directly from the broker, for only that brokers listings. That means every broker must set up a feed to Zillow, which generally doesn’t happen. Lastly, in rare instances, the MLS may syndicate ALL of the listings, but that is relatively rare as some brokers do not want ALL of their listings displayed on Zillow. For instance, if an agent takes a Luxury Real Estate listing from a celebrity, its not uncommon that they wont want their private home displayed for the world to see.
Other National Real Estate Sites
There are other national real estate websites out there. The #2 site in the country is Trulia, who is owned by…yep, you guessed it…Zillow! Trulia comes with the same issues that Zillow has for getting all of the listings. One of the national real estate websites that DOES get almost all of the listings is realtor.com. Since they are controlled by the National Association of REALTORS, they get a direct data feed from the local board. Realtor.com also sells ads directly back to real estate agents and brokers to generate revenue. One other thing worth pointing out…most of the national real estate websites will structure your property search results based upon who is paying them. That means you may see “featured listings” first, by brokers or agents who these sites ave relationships with, before you see the homes in their natural order.
Although today, discount real estate brokers are nothing new, they are still making waves in the real estate world.
Many have come and gone, most making enemies in the real estate industry by undercutting the commission that most real estate agents offer.
What Exactly is a Discount Real Estate Broker?
Discount real estate brokers are licensed real estate brokers who offer a similar set of services as a standard real estate broker, but at a substantial discount. Some have confused a Discount Real Estate Broker with a Limited Service Broker. Both offer to reduce the commission that is charged, but a Limited Services Broker will usually only put your new home for sale in the MLS so it gets put on local real estate websites and the home seller is responsible for many of the standard functions of the REALTOR. Some limited service brokers offer services ala-carte to their home sellers. How much they take depends on what level of service they are providing to their clients. There is another term to not be confused with a true Discount Broker and that is Flat Fee Broker. Those brokers generally take a flat fee to have your home put into the local Multiple Listing Service. That lets the home be visible by all other active agents with a potential buyer. In the Flat Fee Real Estate Broker model, the seller is usually responsible for showing the home, taking offers, negotiations, contract reviews and most other aspects of the real estate transaction. A TRUE Discount Real Estate Broker provides a similar set of services as a full service broker but takes a much smaller commission, claiming to save the home seller thousands of dollars in commissions.
How Can They Do Offer The Same Real Estate Services At Less?
Although this varies substantially from each broker, as a general rule, they eliminate a lot of the excess, time consuming real estate functions that are obsolete, but are pushed by standard agents. This list will vary by the company but may include:
Holding an Open House
Showing Up For All Showings
Daily Phone Calls to the Home Seller With Updates
Discount Real Estate Brokers claim that they can leverage technology to achieve the same sales price of the home for sale, but utilize technology as opposed to raw time and energy to get the home sold. In addition, limiting the services that no longer produce results.
Many of the Discount Real Estate Brokers take a smaller percentage of the commission for themselves, but offer a competitive commission to the cooperating broker. Since most homes that get listed are actually sold by another cooperating broker, they still have incentive for every other agent in the market to bring a home buyer to the table.
Do They Represent Home Buyers?
Many Discount Brokers work hard to get both sides of the transaction. This is an easy way for them to bring additional dollars to their bottom line from the same client. In many instances, they leverage technology to generate buyer leads but may not participate in much paid advertising on the listings that they offer to the public as they don’t generate as much revenue when those homes are sold.
On the listing side, many Discount Real Estate Brokers work off of generating a lot of listings. They set up systems (based on real estate technology) in which very little time is put forth on the marketing and coddling of the client.
Do Discount Real Estate Brokers Really Work?
Just as in anything, you have the good and the bad. A Discount Real Estate Broker that has solid technology systems for automating the marketing on their listings can provide the same results as a full service real estate broker. On the other hand, some may do very little to get your home sold other than put it in the MLS. In either case, if you are a “needy” home seller and want to speak with your REALTOR every day, ask a lot of questions, have them stage your home for showings and hold your hand through the transaction, a Discount Real Estate Broker may not be what you are looking for.
Pocket Listings Represent Everything That Is Wrong With REALTORS
Pocket Listings have been getting quite a bit of talk lately in the REALTOR community. What was once considered shameful and unscrupulous has now become an Advanced Marketing Technique.
What Is A Pocket Listing?
A Pocket Listing is a new listing that has not been put into the MLS for other REALTORS to be able to bring a willing and able buyer to purchase. This means that the REALTOR gets a chance to market the property to their sphere of influence in an effort to supposedly “get the home seller a higher net” by not paying the cooperating commission. From the buyers perspective, in theory, they could reap the benefits of the “saved commission” if the seller were to still end up selling the home for the price it would have sold for through the MLS.
Why Does Being Listed In The MLS Matter?
One of the main purposes of the Multiple Listing Service (MLS) is that it opens agents and brokers up to sell other agents and broker’s listings with the guarantee of being compensated. In the old days, if you worked with a particular real estate broker, you had to choose between that broker’s listings. The MLS is an agreement between real estate brokers that say “if you sell one of my listings, you will be paid X”. The commission offered to the agent that would bring the buyer is written out and advertised. The MLS is responsible for holding the listing broker to pay the agent or broker that brings a ready, willing and able buyer. This worked out smashingly for general public because if you were a seller, your home could now be sold by ANY real estate agent or broker (who participated in the MLS). From the buyers’ perspective, you could choose an agent that you like and trust and they would have the ability to sell all listed properties. Because the MLS is a formal agreement between real estate brokers and the agents that work under their umbrella, all listings they take must be listed for sale—with a cooperating commission.
So What’s Wrong With A Pocket Listing?
Let’s be real here. Statistics prove, pretty much overwhelmingly that when a listing gets listed by a specific agent, it is very seldom ever actually SOLD by that agent. The MLS facilitates other agents to be able to show the home. If the listing agent does happen to find the buyer, that is known as “Dual Agency”. In that instance, the listing agent gets paid BOTH the “buyer side commission” and the “seller side commission”. Dual Agency works differently in different states and is even illegal in some. With thousands of real estate agents and brokers in every market, the odds are that another agent will bring the buyer. When a home owner chooses a real estate agent to list their home, most of them anticipate their agent to do everything they can to sell their home. The listing agent even has a “fiduciary responsibility” to their seller, which means they should look out for their clients’ interests BEFORE their own. If the home owner is expecting their agent of choice to do everything in their power to get them the highest fair market value for their home….how is it even fathomable to not let another agent show the home? How can a real estate agent (with a clear conscience) not open the property up to ALL potential buyers—not just the ones they personally know? Pocket Listings Represent Everything That Is Wrong With REALTORS.
I Thought You Said All Listings HAD To Be In Put In The MLS?
This is where it gets tricky. When the real estate market was on fire and buyers were lining up to put in multiple offers on a property, sometimes over the list price…agents got used to “holding the listing” out of the MLS to try to get “both sides” of the deal. That means make the buyer side and the listing side of the commission. Even though it was against the MLS policies, it was done on a regular basis. It became such a common thing that it was brought to the National Association of REALTORs to allow pocket listings. It was argued that if a seller didn’t want their listing in the MLS, they should have the right to not have their home listed in the MLS. Most people can’t argue with that. I would personally argue that if the seller (for whatever reason) doesn’t want their home listed in the MLS…find an agent that isn’t a member…or simply attempt to sell it yourself. Nonetheless, it was agreed that if a seller puts in writing that they explicitly do not want their listing to be in the MLS, they now have that right.
So What’s Wrong With That?
What is wrong with that is at the heart of why real estate agents are considered only one notch above car salesmen. That means that an agent had to sit down with their seller and somehow explain that it was in THEIR best interest to NOT open their home up to be sold by the thousands of other agents out there. The listing estate agent had to convince the homeowner that somehow it’s an “advanced marketing tactic” to not let 99.9% of the buyers in the marketplace have the ability to make an offer on their home. All so they would have the opportunity to possibly get both sides of the commission. In most instances, if the home doesn’t get sold in what is now called “pre marketing” where it’s not listed, but the listing agent can get paid—-it still ends up in the MLS, offered to all agents. But ONLY after the greedy listing agent has a shot of getting paid double.
Are There Any Exceptions?
Real Estate transactions are always unique. I’m sure that there are some possible reasons that holding a listing out of the MLS for a couple weeks (but giving YOU the opportunity to sell it) can be in the best interest of the seller…but I can’t think of any.
If you are one of those pre-marketing, pocket listing, greedy agents….you should be ashamed of yourself.
Far and large, real estate agents truly do their best to do their clients right. Most agents work hard, take shit and are unappreciated most of the time…only to be called one step above a used car salesman.
That is why Pocket Listings Represent Everything That Is Wrong With REALTORS!
In today’s world of “shopping around” for the best deal, it has been mentioned over and over that you can negotiate the amount of commission you would pay a real estate agent to list your home for sale. This has been touted from supposed experts that claim to have some insight on the real estate industry. Although it is very true that all commissions are fully negotiable, the fact remains: Do you actually save any money if you list your house at a discounted commission?
The 6% Standard
It has been said that a “standard” listing commission is 6% of the sales price. Any real estate broker will tell you that there is no “standard” listing commission – since years ago, there was a lawsuit on price fixing in the real estate industry. Even though there is no concerted effort on the side of real estate brokers to all list at 6%, it has become the industry average. In the last ten years, it has become somewhat popular to list some of the more expensive luxury properties at a six-four split. What that means is the real estate brokerage will charge 6% of the first hundred thousand dollars and 4% of the remainder. With that being said, there is no shortage of real estate agents who will list your home for 5%, 4% or even less. At first glance, it seems to be a no brainer that you should save some money by listing your home at a discounted rate—it simply saved money right? The answer is not that simple.
Where Does the Listing Commission Go?
First, it’s important to understand that when you list a home, that commission gets spit up in a variety of ways. The first split is between the Listing Broker and the Selling Broker. In most instances (but not always) is a 50/50 split. That means that ½ of that commission is offered to the real estate broker who brings the buyer, while the listing broker keeps the other half. The second way that commission is split is between the real estate agent and their respective broker—on both the listing and the selling side. That commission split varies dramatically between real estate brokerage models and the value proposition that a particular brokerage offers to their agents. For the most part you, as the home seller, should not worry too much about that part of the split.
Why List at 7%?
It’s important to remember that when listing your home, a large portion of that commission (potentially ½) is offered to the broker/agent responsible for bringing the buyer of the property. The amount of “cooperating commission” is prominently noted in the MLS where all local agents can see it. Agents are very aware of the potential commission they will receive when showing a home. This is not a bad thing, but a human thing. Most of us have jobs—you should know how much money you will make for doing your job. That is nothing to be ashamed of. Most real estate agents will happily admit that a large portion of their job is a labor of love. They love the industry, they love their clients, they love the negotiation…but they still do have some anticipation of getting paid. That beings said, at any given time, for any particular price range of homes, there are a lot homes to choose from. Depending on the market and the location, there may be thousands of homes that fit a potential home buyer’s criteria. When assisting their clients on which homes they will view first, I know that most agents put their client’s well-being first, but that still leaves a ton of homes to see. It’s not too shocking that homes that are listed, offering more money to the agent that brings a buyer, get shown first. If you have your home listed for sale – do you want it shown FIRST to a new home buyer?
Dangle That Carrot
Just like in anything else in the world, if you want someone to do something, you have two ways to approach it. You can attack with a stick—meaning if you don’t do this, something bad will happen. The other way is with a carrot. If you dangle a carrot you are saying if you do this, something GOOD will happen. If you dangle a big fat carrot (additional money for completing the same job) in front of realtors, they are likely to do it—in this instance, show YOUR home. You want to create an atmosphere where agents WANT TO show and ultimately SELL YOUR HOME – and not the one down the street. As previously mentioned, I know that most agents truly look out for the best interests of their clients first—but that doesn’t mean they can’t show the higher commissioned property first does it? It’s important to remember that real estate agents, although most truly love their job and their clients—don’t sell real estate for community service.
Listing a Home
When listing a home for sale, it’s important to understand that the first area of business is getting the home shown. Think back to when you first saw the home that you most recently bought. My guess is you knew it was the perfect home for you within seconds of walking in the door. That is almost always the case with homebuyers. The listing agent’s job is to get as many people to see the home as possible – someone will fall in love with it. Dangling that carrot in front of real estate agents gets YOUR home shown.
You Would Do It To
Think about your job. It really doesn’t matter what it is you do. Let’s say you put tires on cars. If you put a tire on car A you make $15 but if you put a tire on car B you make $10. Which car would you rather be putting tires on? If you are surgeon and if you operate on left knees, you make $7000 but if you operate on right knees you make $8000—which knee would you hope to operate on? When time is tight, which one will you schedule first?
What Matters Is How Much You Clear
When selling a home or a luxury condo, you really shouldn’t worry about the sales price, the commission or anything else…what you need to worry about is how much money you will clear. Sure those things do affect how much money you will make on the sale of your home, but the bottom line is the check you receive at closing. That being said; let’s take a look at some numbers…
Let’s say you are selling a home for $200,000. If you list the home at 6%you will pay $12,000 in commission. If you list your home at 7%, you will pay $14,000 in commission. That is a difference of $2,000. Yes….$2,000 is a lot of money to anyone…but if your home is not being shown (because you listed it at 4% to “save some money”) how much would you drop the price by? Would you drop the price by $5,000? $10,000? Keep everything in perspective.
Listing your home at 7% will get your home on the first list of homes to see for every real estate agent that has a buyer. Some agents may even say to their buyers—“I know you really didn’t want to buy in this part of town, but you REALLY need to see THIS house!” I’m being a little facetious here, but I think that you get the point. If you think you are saving money when you list your home at a discounted commission, it has been proven that is a short sighted point of view. You are much better off dangling that carrot in front of every real estate agent in the area to GET YOUR HOME SOLD.