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How to pick the best Realtor
Questions you must ask a Realtor in today’s market
Use this questionnaire when speaking with agents. Ask the tough questions NOW to avoid the problems and disappointments later.
1. Are you an active agent or a passive agent?
CAUTION; Are you considering an agent who advertises in the local paper, runs magazine ads, virtual tours, open houses, agent tours, talking house ads, websites etc.? This is a PASSIVE agent. That means they will passively wait around for someone to call and maybe want to see your home. The fact is passive marketing by passive agents doesn't sell homes or at best sells homes for less. I am an active agent. Yes, I do some passive marketing but I don't expect anything other than my ACTIVE Selling System to get your home sold for top dollar.
2. How many people do you speak with each day about real estate?
The average agent does not contact anyone about your home. They rely on the MLS and other passive activities. I phone about 100 people on a daily basis about my homes for sale. I am actively looking for the buyer... not passively waiting around for someone else to sell your home.
3. What is the term of your listing agreement?
The average agent will only want to list your home for 180 days or longer. Why? Because they aren't planning on sweating to get your home sold. Can you take the risk of choosing an agent who will not commit to you and the sale of your home?
4. What is the absorption rate of homes in this area?
Every Realtor must know the absorption rate in their market. The absorption rate tells us how long it will take the average home to sell. The basic formula is the number of homes for sale divided by the number of homes selling each month. This equals the number of months supply.
1. Are you an active agent or a passive agent?
CAUTION; Are you considering an agent who advertises in the local paper, runs magazine ads, virtual tours, open houses, agent tours, talking house ads, websites etc.? This is a PASSIVE agent. That means they will passively wait around for someone to call and maybe want to see your home. The fact is passive marketing by passive agents doesn't sell homes or at best sells homes for less. I am an active agent. Yes, I do some passive marketing but I don't expect anything other than my ACTIVE Selling System to get your home sold for top dollar.
2. How many people do you speak with each day about real estate?
The average agent does not contact anyone about your home. They rely on the MLS and other passive activities. I phone about 100 people on a daily basis about my homes for sale. I am actively looking for the buyer... not passively waiting around for someone else to sell your home.
3. What is the term of your listing agreement?
The average agent will only want to list your home for 180 days or longer. Why? Because they aren't planning on sweating to get your home sold. Can you take the risk of choosing an agent who will not commit to you and the sale of your home?
4. What is the absorption rate of homes in this area?
Every Realtor must know the absorption rate in their market. The absorption rate tells us how long it will take the average home to sell. The basic formula is the number of homes for sale divided by the number of homes selling each month. This equals the number of months supply.
The most important yet underrated skill is NEGOTIATION.
When you put your home on the market, you are selling one of your most valuable assets, right? Don’t go cheap. There are times when it’s OK to cut corners, and there are times when it pays to invest in quality. We’ve all heard the saying, “You get what you pay for.” When it comes to hiring skills, you definitely get what you pay for. Every agent has the same state-issued license, but they most definitely do not have the same skill level to get YOU the best result.
Some sellers wonder whether hiring an agent justifies the commission you pay. Think about it this way. There is a reason that highly-paid celebrities and professional athletes virtually never negotiate their own contracts in their respective fields. Just like in a real estate transaction, they use “agents,” because they know and understand the value and leverage of having a skilled third-party negotiator representing them.
Weak negotiating skills can be a costly mistake. Unfortunately, most sellers hire an agent simply because they know them or they are family friends, relatives, they live in the neighborhood, or because they are friendly and nice (or even worse, because they’re cheap). While any of those reasons may have some advantage for you, the real question you need to ask yourself is do they have the knowledge and skill to effectively represent your best interest in a complex and large transaction.
An unskilled agent can cost you tens of thousands of dollars of your valuable equity by not knowing how to position your property to get the best offers or how to negotiate the price and terms in a way that protects your hard-earned equity. And the worst part of it is that you will never know how much hiring that agent really cost you…
A skilled negotiator makes everything sound easy and communicates confidence and is a competent professional who knows how to deliver results. And when you find that person, not only will they protect your equity and maximize your cash, they will make the process much less stressful for you.
Having a third party negotiator has several significant advantages. First, they have knowledge and skills that enable them to negotiate from a stronger position. Second, they are more objective and can keep emotions out of the equation. Third, they provide a communication buffer between the parties that allows you to respond more strategically.
However, an agent who does not understand the importance of skilled negotiating, can be more of a liability than an asset when it comes to getting top-dollar. In fact, in terms of value, an agent’s negotiating skill and understanding of how to close a transaction seamlessly is more critical to your bottom line than their “marketing plan.” With the first communication from the buyer or buyer’s agent, the negotiations have already begun.
Imagine, you get the call from your broker or agent. Hurray! We have an offer! Or even better, you have multiple offers! What happens next? This is where it pays to have an agent that understands negotiating strategy.
Do they understand how to represent you and the value of your home well when a potential buyer or buyer agent asks, “Will the seller take less?” or “How much flexibility does the seller have on their price?” An agent skilled in negotiation will know how to answer that question simply and honestly in a way that does not give away one dime of your equity, AND at the same time does not make the other party feel like they are being stonewalled.
For example a skilled answer will sound something like this, “That’s a great question. The sellers are very comfortable with their price, and if you’ve seen the recent, comparable sales, then I’m sure you’re already aware that the house is priced very well… Have you (your buyers) seen the property yet?” Notice the response does two things. First, it answers the questions in an effective way. Second, it turns the conversation towards the buyers’ situation. Being a skilled agent I will leverage this conversation to gather information about the buyers and their qualifications and motivation not to posture in a way that pits buyer against seller. That only creates resistance and will be ineffective at securing the best result for you.
Some sellers wonder whether hiring an agent justifies the commission you pay. Think about it this way. There is a reason that highly-paid celebrities and professional athletes virtually never negotiate their own contracts in their respective fields. Just like in a real estate transaction, they use “agents,” because they know and understand the value and leverage of having a skilled third-party negotiator representing them.
Weak negotiating skills can be a costly mistake. Unfortunately, most sellers hire an agent simply because they know them or they are family friends, relatives, they live in the neighborhood, or because they are friendly and nice (or even worse, because they’re cheap). While any of those reasons may have some advantage for you, the real question you need to ask yourself is do they have the knowledge and skill to effectively represent your best interest in a complex and large transaction.
An unskilled agent can cost you tens of thousands of dollars of your valuable equity by not knowing how to position your property to get the best offers or how to negotiate the price and terms in a way that protects your hard-earned equity. And the worst part of it is that you will never know how much hiring that agent really cost you…
A skilled negotiator makes everything sound easy and communicates confidence and is a competent professional who knows how to deliver results. And when you find that person, not only will they protect your equity and maximize your cash, they will make the process much less stressful for you.
Having a third party negotiator has several significant advantages. First, they have knowledge and skills that enable them to negotiate from a stronger position. Second, they are more objective and can keep emotions out of the equation. Third, they provide a communication buffer between the parties that allows you to respond more strategically.
However, an agent who does not understand the importance of skilled negotiating, can be more of a liability than an asset when it comes to getting top-dollar. In fact, in terms of value, an agent’s negotiating skill and understanding of how to close a transaction seamlessly is more critical to your bottom line than their “marketing plan.” With the first communication from the buyer or buyer’s agent, the negotiations have already begun.
Imagine, you get the call from your broker or agent. Hurray! We have an offer! Or even better, you have multiple offers! What happens next? This is where it pays to have an agent that understands negotiating strategy.
Do they understand how to represent you and the value of your home well when a potential buyer or buyer agent asks, “Will the seller take less?” or “How much flexibility does the seller have on their price?” An agent skilled in negotiation will know how to answer that question simply and honestly in a way that does not give away one dime of your equity, AND at the same time does not make the other party feel like they are being stonewalled.
For example a skilled answer will sound something like this, “That’s a great question. The sellers are very comfortable with their price, and if you’ve seen the recent, comparable sales, then I’m sure you’re already aware that the house is priced very well… Have you (your buyers) seen the property yet?” Notice the response does two things. First, it answers the questions in an effective way. Second, it turns the conversation towards the buyers’ situation. Being a skilled agent I will leverage this conversation to gather information about the buyers and their qualifications and motivation not to posture in a way that pits buyer against seller. That only creates resistance and will be ineffective at securing the best result for you.
Here are some instances when bad agents miss the mark when it comes to negotiation:
● Shutting down "low-ball" offers.
The common knee-jerk reaction of any seller to a low-ball offer is to reject it right away. Sellers usually make the mistake of taking a low-ball offer personally. They think it’s ridiculous and never give it a chance. But what they fail to realize is that a good agent knows that any offer is a starting point for negotiations, not the end. The fact is that EVERY offer is a legitimate offer that could result in satisfactory terms. Because you have no idea how much someone is willing to pay for a property based on their initial offer. They may be willing to pay whatever they have to, but they want to test how low you as the seller will go, so they start very low to see how you will respond. Unfortunately, most Sellers and most agents and brokers, have no clue what to do after the initial conversation with the buyer or buyer’s agent to maximize the value of the property. They don’t know how to suggest a strong, reasonable counter-offer to find out if the buyer is serious, (without making the buyer walk from the negotiating table).
● Not following up with leads and not communicating with buyers and buyer Agents.
Some sellers and Agents mistakenly believe it is best to act like they are not really that motivated at all. But this is counterintuitive because buyers are looking for a motivated seller. Playing “hard to get” is a dangerous move. Not communicating stalls the negotiations and consequently, the party trying to communicate with you loses interest fast.
Not responding to the buyer or their Agent after they submit an offer only adds insult to injury… and tortures them as they try to figure out what’s going on. This makes them think that you’re just out there shopping for an offer. Want to know a surefire way to kill the buyer's trust and make them forget about buying your home? Give them the silent treatment!
This usually happens when you react out of emotion. The overarching fear of loss and disapproval drives the way you negotiate, causing you to act impulsively. Because when fear rules you, it compromises your ability to negotiate strongly.
● Accepting an offer from an unqualified buyer
The biggest headache you can probably give yourself is to accept an offer from an unqualified buyer. Your agent fails to ask the right questions that identify the buyer’s motivation. Or they don't take the necessary steps to pre-qualify prospective buyers.
● Holding out for a better offer. When a house first comes on the market and gets a great offer (especially in a multiple offer situation), sellers tend to get greedy and think that if they wait, they’ll get a better offer. But this is a high risk move, because it takes only a short span of time before any buyer loses interest. Buyer excitement wanes the longer you wait. Imagine how frustrating (not to mention, infuriating) it is to a serious buyer when you’re putting them through the agony of waiting even though they have already agreed to waive all contingencies and even offered to put out $20k in earnest money. They’ve fallen in love with your house and are all excited about buying it but will feel like they’re being played. When you’re holding out for a “better” buyer, you're shooting yourself in the foot! A skilled agent who understands the market will know how to properly guide you to avoid making such mistakes.strongly to help you make the best decision and REPRESENT YOU in getting the best RESULT.
The common knee-jerk reaction of any seller to a low-ball offer is to reject it right away. Sellers usually make the mistake of taking a low-ball offer personally. They think it’s ridiculous and never give it a chance. But what they fail to realize is that a good agent knows that any offer is a starting point for negotiations, not the end. The fact is that EVERY offer is a legitimate offer that could result in satisfactory terms. Because you have no idea how much someone is willing to pay for a property based on their initial offer. They may be willing to pay whatever they have to, but they want to test how low you as the seller will go, so they start very low to see how you will respond. Unfortunately, most Sellers and most agents and brokers, have no clue what to do after the initial conversation with the buyer or buyer’s agent to maximize the value of the property. They don’t know how to suggest a strong, reasonable counter-offer to find out if the buyer is serious, (without making the buyer walk from the negotiating table).
● Not following up with leads and not communicating with buyers and buyer Agents.
Some sellers and Agents mistakenly believe it is best to act like they are not really that motivated at all. But this is counterintuitive because buyers are looking for a motivated seller. Playing “hard to get” is a dangerous move. Not communicating stalls the negotiations and consequently, the party trying to communicate with you loses interest fast.
Not responding to the buyer or their Agent after they submit an offer only adds insult to injury… and tortures them as they try to figure out what’s going on. This makes them think that you’re just out there shopping for an offer. Want to know a surefire way to kill the buyer's trust and make them forget about buying your home? Give them the silent treatment!
This usually happens when you react out of emotion. The overarching fear of loss and disapproval drives the way you negotiate, causing you to act impulsively. Because when fear rules you, it compromises your ability to negotiate strongly.
● Accepting an offer from an unqualified buyer
The biggest headache you can probably give yourself is to accept an offer from an unqualified buyer. Your agent fails to ask the right questions that identify the buyer’s motivation. Or they don't take the necessary steps to pre-qualify prospective buyers.
● Holding out for a better offer. When a house first comes on the market and gets a great offer (especially in a multiple offer situation), sellers tend to get greedy and think that if they wait, they’ll get a better offer. But this is a high risk move, because it takes only a short span of time before any buyer loses interest. Buyer excitement wanes the longer you wait. Imagine how frustrating (not to mention, infuriating) it is to a serious buyer when you’re putting them through the agony of waiting even though they have already agreed to waive all contingencies and even offered to put out $20k in earnest money. They’ve fallen in love with your house and are all excited about buying it but will feel like they’re being played. When you’re holding out for a “better” buyer, you're shooting yourself in the foot! A skilled agent who understands the market will know how to properly guide you to avoid making such mistakes.strongly to help you make the best decision and REPRESENT YOU in getting the best RESULT.
