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How to Select a Real Estate Agent

How to Select a Real Estate Agent

When the time comes to sell their home, the first task for most home owners is to select a real estate agent to handle the process. It's the agent who usually has all the knowledge required to sell the home—including state and federal laws governing the selling process, legal forms, etc.—so it's a crucial step in the home selling process.

So how do you go about selecting the right one?

Traditional Real Estate Companies

When you think of a real estate company, your mind probably recalls the names of those you've seen on TV commercials and on the signs you see in your neighborhood. The majority of these companies are "traditional" real estate companies—meaning they all work basically the same way and sell your house in exchange for a percentage of the sale price. This commission is where the company gets its revenue and is typically around 6%. The most visible traditional companies include RE/MAX, Century 21, GMAC, Prudential and Coldwell-Banker.

When you sign an agreement to list your home with a particular company, that establishes a contract between you and them. The agent you sign the agreement with is the face of the company and the mechanism for the actual tasks to market your home.

Most of the traditional companies do not offer anything vastly different than the next. What they do offer is size and reputation: you know their name, and the buyers interested in your house have heard of them. This gives a level of credibility and confidence to you as the home seller and to potential buyers. However, would you, if you were looking for a new home, not go see a house because you didn't recognize the company name on the sign out front? Probably not.

The perception by most people is that a recognized name offers quality. Quality, however, is not a company product in the real estate world. Quality can only be provided by the individual agent.

Larger Company = Better Quality?

Does a recognized company with hundreds of agents provide better quality than a no-name company with only a few agents? Maybe. If you get a high-caliber agent at either company, you will find quality. The perception is that a large company would provide more resources and better resources than a smaller company, therefore making better agents. Larger companies may offer more, but it is still up to the individual agent to take advantage of what is offered.

There are no company rules requiring that agents be trained to any level above the minimum to receive a license, but most state laws do mandate that an agent attend a minimum level of continuing education in order to keep a license, though. Thus, agents in most states all receive the same minimum amount of training, regardless of which size company they work for.

Larger Company = More Buyers?

Do agents at a larger company have more access to potential buyers? While this may seem logical, it is often just the opposite.

In a large company, the interaction of agents is limited. Most do not have office space at the main office, and the only company requirement is that the agents attend a weekly business meeting. Thus, the access and exposure to fellow agents and their buyers in a large company is no better than with a small one.

Furthermore, many companies use the weekly business meeting as a communications mechanism for agents to announce new listings. When the company gets too many agents, though, it's often too time consuming for this practice to continue so it is minimized or cut out altogether.

Therefore, the "bigger is better" mentality in real estate may not be the case. A larger company with more agents does not guarantee access to more buyers or that your home will sell faster.

The main advantage that an agent offers a home seller is the ability to list the seller's home on the Multiple Listing Service (MLS). This service allows any agent on the system to find your home, and it is the main marketing tool used by all agents.

So, do agents have more access to buyers? Theoretically, because this system advertises your home to thousands of other agents who have potential buyers, an agent does have access to these buyers. However, this is the only real access agents have.

Most agents will agree that there is only about a 1% chance that they will actually bring in the buyer who buys your home. Why? Unless an agent specializes in exactly your type of home, the likelihood of finding your buyer will be minimal.

That's why, regardless of the size of company and access to the MLS, you need to find a high-caliber agent.

Finding a High-caliber Agent

So how do you find a high-caliber agent? That's a good question. Let's start by defining what makes the agent high-caliber.

Is it time in the industry? No, you can have really bad agents who have been in the business for a very long time.

Is it the volume of homes they sell? Maybe. Most agents will tell you that they are in the Million Dollar Club. What does that mean? It means that the agent has sold over $1 million in home value. Was that ten $100,000 homes, though, or just one $1,000,000 dollar home? Simply being a member of a club does not make an agent good.

The definition of a high-caliber agent is an agent who performs to expectations in the shortest amount of time. That is, an agent who sells your house, closest to list price, in the shortest amount of time.

Here are a few questions to ask an agent to determine their caliber:

  1. What is your productivity? That is, out of all the listings you have taken, how many have you sold? Ask to see actual data.
  2. What is the "average days on market" for your listings? Ask to see actual data.
  3. Do you perform all the functions in your business (i.e. marketing, customer service, sales, etc.)? If so, how much time do your foresee spending on my home and my particular needs?
  4. What do you do if my home has been sitting on the market longer than you expected? A high-caliber agent should not simply suggest a "price reduction"; they should have an alternate set of solutions.

The Easy Way

One easy way to find a high-caliber agent is through House Buyer Network. HBN conducts exhaustive checks on every agent that wants to be part of its network and verifies that the agent not only meets the criteria above, but also has demonstrated an ability to get houses sold at a rate far above average. Filling out the home information form puts you in touch with not just one, but two home selling professionals who can help you sell your house as quickly as possible. The best part is that it's absolutely free, and there's never an obligation.

Conclusion

Finding the right agent to sell your house isn't easy, but it can be done. Just make sure to do your homework on the individual, and not just assume that because they work for a big-name company they're a high-caliber agent. You may find exactly what you need at a company you've never heard of.

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