real estate

What You Should Know About Hiring a Real Estate Agent

If you'd rather not spend the time or the effort selling the place yourself, here's how to find the best agent for you.

Many sellers (and even more buyers) choose a real estate agent who is a friend or relative. In some cases, this might not be the smartest move. There may be another agent with better knowledge of your area or has a stellar track record for selling homes in a short time frame. Here's how to make sure the 5% to 6% of your home's selling price that you'll spend on a real estate agent is money well spent:

For starters, you'll want to find an agent who knows your neighborhood, who has a good working knowledge of schools, roads, shopping, swim and tennis clubs, and other local amenities.

Make Agents Compete for Your Listing

Note the names on neighborhood for-sale signs and in newspaper ads. Once you've compiled a list of three or four agents who seem to be doing the most business, go see them in action. Stop by their open houses and see how they treat potential buyers. (You don't need to confess that you're thinking of selling.) Afterward, call those you are still interested in and invite them to make a listing presentation.

Beware the agent who gushes about how fast your home will sell and promises a higher price than other homes nearby.

Ask agents to compare the original asking and selling prices for homes they've sold recently. How long did it take for those homes to sell?

Good agents base their estimate on a review of recently closed sales of homes similar to yours. Agents also take into consideration prices of other homes on the market (current listings) and pending sales (homes that are under contract to sell but haven't yet sold). They know which neighborhoods are competing for the same pool of buyers.

Ask each agent how many transactions they've closed over the past 12 months. Their answer should be about one per month. And it's best if most of those houses were in your price range.

How will agents market your home? You can check their Web sites on your own. Are they offering current market statistics? What kind of local information do they provide or link to that would be helpful to prospective buyers? Look at the quality of the photography or virtual tours used to illustrate their listings and how detailed the listing information is. Where will your listing appear online besides the agent's Web site? Ask to see copies of actual ads ads and brochures used to sell homes like yours. How many ads will run for your home and in which publications?

Your home should be placed on the brokers' tour right after you've listed -- when your fresh new listing will generate the most enthusiasm from other agents.

It's a good idea to have an open house occasionally, even though most open houses don't actually produce buyers. But don't automatically reject an agent who deemphasizes open houses in favor of other marketing strategies.

Will agents help you stage your home prior to listing it? Good ones will critique your home, pointing out where or what you need to clean, declutter, repair and update. Then they or someone they hire will "window-dress" your home for maximum appeal to prospective buyers. (To avoid wasting your time, you can do a lot of the cleaning and decluttering before you even show your home to an agent.)

Finally, check references. Ask for names of recent clients, then call and ask how well the agent stayed in touch, how close the listing price was to the sales price, and whether they would use that agent again.

Customize the Contract

The typical (and usually the best) listing arrangement is to give the agent "exclusive right to sell" your home. That means if another agent actually brings in a buyer, your agent will split the commission with the other agent. This arrangement gets your home the most attention from other agents.

Commit to the shortest possible listing period -- say, three months -- and renew it then if you like. If the agent wants you to sign up for longer, compromise: Peg your listing to the average time it takes to sell a home like yours, based on data from the local multiple listing service (the database of homes for sale by all the brokers in your area).

Give Yourself an Out

That does not mean you're stuck with an agent who turns out to be a nightmare. Write a sentence into the listing contract that allows you to cancel the agreement if you aren't satisfied with the agent's performance.

Brokerages will typically try to reassign you to another agent, and if that still doesn't work out, they will usually release you from the contract.

Before signing, you should also feel free to cross out any statement in the contract requiring you to arbitrate any disputes you have with the agent. You may reserve the right to take legal action.

Get on the Market as Soon a Possible

Require the agent to place your home in the multiple listing service within 48 hours of your signing the listing contract (or when your home is ready to show).

Some unscrupulous agents will "pocket" the listing, hoping to give themselves or another agent in their brokerage office first crack at an in-house sale. That's doubly lucrative because the brokerage doesn't have to share the commission with an outsider.

But you are better off if your house is exposed to the full market of buyers. An in-house sale may not produce the highest bidder -- and you may not get the best price for your home.

Most Popular

Dying Careers You May Want to Steer Clear Of
careers

Dying Careers You May Want to Steer Clear Of

It’s tough to change, but your job could depend on it. Be flexible in your career goals – and talk with your kids about their own aspirations, because…
September 13, 2021
5 Top Dividend Aristocrats to Beef Up Your Portfolio
dividend stocks

5 Top Dividend Aristocrats to Beef Up Your Portfolio

The 65-member Dividend Aristocrats are among the market's best sources of reliable, predictable income. But these five stand out as truly elite.
September 14, 2021
7 Best Commodity Stocks to Play the Coming Boom
commodities

7 Best Commodity Stocks to Play the Coming Boom

These seven commodity stocks are poised to take advantage of a unique confluence of events. Just mind the volatility.
September 8, 2021

Recommended

Why You Shouldn’t Rush to Buy a House Right Now
buying a home

Why You Shouldn’t Rush to Buy a House Right Now

Super low mortgage rates alone aren’t a good reason to buy a home. Before you jump into the housing market, carefully consider these five factors.
September 25, 2021
11 Best Things to Keep in a Safe Deposit Box
savings

11 Best Things to Keep in a Safe Deposit Box

These valuables and documents, along with some items you hold dear, should be stored securely at your bank.
September 25, 2021
After Surfside Collapse, 6 Crucial Steps Every Condo Board Should Take Today
real estate

After Surfside Collapse, 6 Crucial Steps Every Condo Board Should Take Today

If you manage a high-rise condo, you have got to be on the ball, because lives could be at stake. To protect your residents (and yourself, as a fiduci…
September 6, 2021
Could Surfside Happen to You? What Concerned Condo Owners Should Do Now
real estate

Could Surfside Happen to You? What Concerned Condo Owners Should Do Now

If you live in a high-rise condo, you can – and should – take an active role in protecting yourself and your investment. Here are five steps that coul…
August 26, 2021