5 Tips to Choosing a Realtor® and Avoiding an Expensive Mistake
Choosing a Realtor ® can either be a positive and profitable experience or an expensive mistake.
When buying a car, we read reviews, do research, start spreadsheets, and kick tires. When selecting a Realtor®, often people are a little more care-free. Uncle Bob is a Realtor® – let’s hire him. Case closed. What difference could it make when choosing a Realtor® over another, anyway? Thousands of dollars of difference right out of your pocket – and I’m not just talking the difference in commission fees. Selling a home is likely one of the most significant financial transactions you’ll ever make. We’re here to make sure you have the best experience possible.
Here are five ways that hiring the wrong Realtor® can cost you thousands:
- Hiring a friend or relative
- Letting a Realtor® “buy” the listing
- Not scrutinizing the marketing & showcasing
- Not knowing your rights and obligations
- Choosing a part-time Realtor®
Hiring a friend or relative
About Uncle Bob. I’m sure he’s a great guy and he grills a mean steak, but those aren’t the best reasons to entrust the sale of your home to him. Selling your home is not about your personal relationships with friends and family, it’s a business decision.
It is possible that, after you’ve interviewed several Realtors®, Uncle Bob comes out on top as the best choice with the best track record and credentials, however, you may want to consider whether your personal relationship can withstand the stresses of a business partnership. Some people can separate business from pleasure while others have a hard time not bringing business to the family cookout, and, more to the point, bringing the family cookout to your business relationship. In other words, it may be challenging for friends and family to see you as a “real” client, particularly if you got what looks like a sweet deal in terms of reduced Realtor® fees. Savings on the front end can be a very expensive compromise.
Hiring a Realtor® who does more for you may be pricier up front, but it will likely get your home sold faster and for more. Perhaps most importantly, if Uncle Bob doesn’t come through for you the way you’re hoping he will, you’ve potentially lost more than a business contact.
Letting a Realtor® “buy” the listing
It’s so tempting to choose the Realtor® who suggests the highest list price. Who wouldn’t want to get top dollar for their home? However enticing it may be, there is a cost to overvaluing a property. Realtors® who want the listing badly enough may dazzle you with a crazy list price – this is called “buying the listing.”
In fact, a list price that is set too high often results in a sale price thousands below market value. Potential buyers who can afford your house may look elsewhere to get more bang for their buck, while others may overlook it because it’s out of range. All the while, your house will stay on the market as buyers and Realtors® alike wonder what’s wrong with it.
Want to know how overpricing can influence the sale price? See the stats.
Don’t be surprised if, shortly after getting an inflated list price for your home, the same Realtor® turns around and suggests a price reduction within weeks of listing. Selecting a Realtor® who prices your home competitively can mean thousands of dollars more for you in the end.
Not scrutinizing the marketing & showcasing
Today’s buyer is tech-savvy and sophisticated, so you need to ensure the Realtor® you choose advertises your home across all marketing channels. However, all the exposure in the world isn’t going to help you unless you pair it with proper showcasing.
Buying a home is often an emotional decision so you need to choose a Realtor® that understands they’re selling a dream, not just a house, and the quality and content of the images used in advertising play a vital role in helping a family picture themselves living in your home. Ask the Realtors® you’re interviewing if they assist sellers with professional home staging and photography, and be sure to look at their photography both online and in print to assess the quality.
If your house looks like a million bucks in person but is less than stellar in the photos, that’s not going to help attract a buyer. If these services are not included in the Realtor® fees, you will be footing the bill for them. If the marketing exposure isn’t as robust as it should be, your home may be on the market for an extended period of time, and the longer a house is on the market, the more likely you are to need a price adjustment or sell your house for less than anticipated.
Homes that are professionally staged spend 83% less time on the market and sell for more.
Not knowing your rights and obligations
Real estate law is complicated. Unfortunately, real estate contracts aren’t written by marketing people, they’re written by lawyers, so you need to be fully confident that you’ve found someone who understands the content fully and takes the time to explain everything carefully so that you do too. Errors and omissions in a contract can cause the sale to fall through or cost you thousands of dollars in inspections and repairs to your home. Make sure you know which repairs and closing costs you are responsible for and whether there are any issues with the defects in the title to your property.
Title search issues such as unpaid taxes, unsatisfied mortgages, judgments against the seller and restrictions in the use of land can be expensive to remedy. Start with having the Realtor® answer some detailed questions about what the terms of your contract with them would be and what they do to protect their clients.
Choosing a part-time Realtor®
Add this question to your list of things to ask when interviewing a Realtor® – is real estate your full-time career? There are many part-time Realtors® who are smart, capable, good people, but they simply won’t have the same experience or availability as someone who is in the business full-time. You’re looking for someone who can price your home appropriately, have an established network of buyers to view your home, and negotiate the sale for top dollar; these capabilities are more likely to be with a full-time Realtor®. Settling for less in a Realtor® could mean…settling for less.
Mark Faris
CEO & Broker