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Friday, August 18, 2006

Top 10 Questions to ask the Agents That Want to List Your Home

If you are considering selling your home, you've probably already thought about preparing your home for sale, where you are going to move to, what sale price you'd like for your home. Another very crucial step is to interview at least three successful real estate agents who sell homes like yours in your area. Even if you think you can sell your home alone without professional help, the agents you interview won't mind. They know most do-it-yourself sellers fail and within 30 to 60 days list their homes for sale with one of the agents already interviewed.

Each agent will have a "listing presentation" during which they will outline their skills, experience and marketing strategies. Here are the key questions to ask each agent if they didn't already answer them in their presentation:

1. How much can you get for my home? Not:
  • what is my home worth?
  • what price should I list my home for?
These questions are important, but the most important thing what your home will actually sell for. The best agents will get you the best price. Be careful though, many agents will try to "buy your listing" by giving you a highly inflated price. Each agent should justify his/her answer by giving you a written CMA (comparative market analysis). This CMA should show (a) recent sales prices of comparable nearby homes, (b) current asking prices of neighborhood homes like yours listed for sale (your competition), and (c) asking prices of recently expired comparable listings, which didn't sell (usually because they were overpriced). Less frequently the report will include actual examples of the agent's sales and how they compared to the average.

After interviewing three (or more) potential listing agents, you can then compare their CMAs to see if they used the same comparable recent home sales prices to justify their opinions of your home's market value. Watch out for agents who estimate an unjustifiably high price or too low.

2. How will you market my home?

At a minimum, each agent's written plan should include a for sale sign on your lawn, putting your listing on the MLS (the most powerful sales tool available to listing agents), and showing your home's photo and information on the agent's web. Will the agent take photos of the home and when will they appear on the internet? It seems simple, but so many agents are not even bothering to put pictures of their listings on MLS these days. Ask to see examples of how the agent has marketed recent listings so you get a feel for the quality of their efforts.

3. How do your sales compare to the area average?

Some agents may tell you that their listings sell on average for 95% of list price, or some may say 110% of list price. In today's market if an agents listings are selling below list price, they are not getting the best price for their listings. On the other hand, if an agent is selling all their listings over list price, they may be purposely under pricing listings so they can make that claim. The important thing is whether their listings are selling about or below average for your area. If they can't provide these details then move on.

4. How many listings do you currently have? Will I be dealing with your or an assistant, and how often will you contact me about sales progress?

Assistants are often the sign of a highly successful real estate agent. But watch out for a "numbers agent" who takes too many listings, knowing a percentage will sell, and forgetting about the rest. You want to avoid becoming just another listing to a numbers agent.

5. How long have you been selling real estate? Are you a full-time agent? What professional courses have you completed?
The best agents will already have answered these questions in their listing presentations or in their professional brochure. There are a lot of part-time agents in this business, and generally speaking they are not nearly as involved in the market, and are often less aware of current trends than full timers. Don't necessarily dismiss a full-time, highly motivated new agent, they could be much better than an "old pro," experienced agent with too many listings to give your home sale the attention it deserves, and little understanding of the internet and online marketing.

6. What suggestions do you have to make my home more marketable? Do you recommend staging it?
Agents hate to answer this question before obtaining the signed listing for fear of insulting the seller. But smart home sellers want to know. Often a minor change, such as replacing the 1950s outdated shag carpet with a neutral fashionable carpet, can change a home's character.

Or maybe the agent will recommend removing your old-fashioned furniture and having a professional designer "stage"your home to make it look up-to-date. Staging a home for sale has become very common among the most successful agents.

7. Do you have a list of client references?

If an agent does a good job, they should be able to provide a list of testimonials from satisfied clients.

8. What sales commission rate do you charge?

Negotiating a low sales commission can be self-defeating if a lower sale price or even no sale results. If you decide to list with a so-called "discount broker" or flat-fee agent you will usually receive reduced services, and a reduced sale price.

10. Other than yourself, who is the best real estate agent in this area?

If the agent evades answering, then ask each agent what he or she thinks of the other agents you are interviewing. Respect each agent's answers. Of course, verify any negative information received about a competitor agent.

SUMMARY: I realize I skipped #9, but a top 9 list just isn't that interesting and I could only think of 9 questions, so there you go! Remember: fall is the second-best home sales season. To assure your home selling success be sure to ask each listing agent you interview lots of questions and then list your home for sale with the best agent for your situation.

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