Hiring a Real Estate Agent

By Steve Gillman - 2006

We finish our look at hiring a real estate agent with some more clues for choosing the best and avoiding the worst. You'll also find some more "secrets" of the business that are not widely known.

Prices Should Be In Advertisements

Have you seen the ads in the paper for homes for sale that don't have prices? What do you do? Sometimes I may call, but there are so many homes to look at that I often just skip over these ones. Maybe you have done the same. So how did leaving the price out help the seller? It didn't.

If the price was there, callers would already be somewhat prequalified to buy your home, since they often know what they can afford. Of course those who are looking for less expensive homes wouldn't call, which is what you would want if you were selling it on your own. Why waste your time, right? And why risk losing a sale to people like me who skip over unpriced homes?

Again, this is a prospecting tool. For the agent, it is good to have people call out of curiosity. When they find that the home isn't right for them, the agent can steer them to another listing that he can make money on. When that buyer looking for a $100,000 home calls on your $300,000 home, the agent isn't going to somehow make him able to afford your home.

Agents have enough ways to get buyers for their other properties. When hiring a real estate agent and coming to an understanding about the service he or she will provide, insist that ads for your home have the price listed. The agent may think you are being picky, and some really believe this is a good way to market your home. Insist on the price being there anyhow.

There Are Few "Normal" Procedures

Agents often let you assume things. They want to get the sale closed, and will let you believe what you have to in order to do that. They might tell you that the seller usually pays the closing fee, for example, or just let you assume that. They may lead you to believe that you have to pay for title insurance for the buyer.

Very little is set in stone in real estate. I have seen the buyer or the seller pay for the title policy, or the entire closing fee. It may be a good idea to pay for these things, to keep the buyer's cash needs low and get a higher price for your home. On the other hand, if you want to counter a buyers offer with your own, and include the clause, "Buyer to pay the closing fee," that is your right.

The Commission Can Be Changed

They'll tell you that they can't change the commission after it has been set. This isn't true. I have seen real estate brokers knock $4,000 off the commission to get a sale closed at a lower price. They don't like the idea of negotiating the commission after the fact, but it happens.

What is true, is that if your agent brings you a full-price cash offer for your home, you owe the commission as set in the listing contract. What if, on the other hand, your agent brings you an offer for much less than what he said he could sell your home for? You can always say no, or you can say it works for you if the commission is cut by $2,000. The agent can always say no to that.

I am not suggesting cheating the agent out of his commission after all his hard work. In the case above where $4,000 was taken off the commission, though, I was one of the four parties involved (2 agents, 2 brokers) who took $1,000 less, and I was happy to do so. Sometimes you want to get paid something for all that effort, even if it is a bit less than expected. No sale means no commission, so if a discount would make the sale work for you, at least suggest it.

Real Estate Agents Are Not All Experts

The first time I made an offer on a house, the agent didn't understand what I meant when I told him that I wanted to get a 90% first mortgage and have the seller carry a second for 5%, so I could get in with only 5% down. Years into his career, he still had only dealt with deals that had regular bank mortgages.

Often agents will be very knowledgeable about a certain type of real estate, or a certain neighborhood, but know little else. Like other professionals, they specialize. If you really need help finding a particular type of property, look through listings online until you find an agent that already has several of that type listed. Then ask all the questions listed above.

Summary

Ask the questions and look for the clues indicated, but trust your intuition as well when hiring a real estate agent. If you don't feel comfortable with an agent, it's possible potential buyers won't either.

Now, whether or not you are using an agent you need to get the home ready, so read on...

The book continues here: Preparing a Home for Sale - What you need for good first impressions.

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