Ever wondered what matters when choosing an agent, and what doesn’t? What do the common ‘points of difference’ agents use to market themselves actually mean? Which should you pay attention to and what should you dismiss as sales waffle?
On Sunday a friend messaged me suggesting this as a topic as he had noticed wading through a multitude of sales pitches gets people in a muddle.
So here we go…a blog about choosing an agent, by an agent. I’ll do my best to be as objective as possible. Tell me how I do! What has your experience been? Let me know in the comments.
4 Reasons Not To DIY
Here are the four main reasons you are better off using an agent to sell your property.
A skilled agent makes buyers feel safer about paying you the big bucks.
That’s what it comes down to. If
Buyers have more protection buying through an agent and they know it. At a glance, this may sound ridiculous. You may be thinking
Should a buyer have a complaint, the Real Estate Authority will investigate and prosecute (where appropriate) without it costing said buyer a cent. Plus, the thought of the stress and potential brand damage done by getting dragged onto Fair Go or Target by a customer or client is truly nausea-inducing. The above two facts are enough to keep most agents committed to staying on the straight and narrow.
You can hide behind Caveat Emptor but an agent can’t.
If you lie to your buyer, your buyer may have to play hide and seek with you indefinitely and/or spend squillions chasing you through the Courts. See what I mean?
Time and expertise.
Selling can be time-consuming and, regardless of what you know, you don’t know what you don’t know. That’s why we use experts in so many areas of our lives where we could choose to ‘just give it a crack’ because how hard can it be? If you get it wrong, fixing the mess can be costly.
And I’m not just talking about your agents’ buyer database here. I’m talking about their brands’ network, their relationships with agents from other brands and with professionals in related industries who are in a position to make your real estate journey that bit more comfortable and successful.
What’s in a sales pitch?
Long post ahead.
There are so many ‘points of difference’ that you may encounter when selecting an agent that I struggled to figure out how to logically break this into multiple posts – so you’re getting the lot. Below is an index so that you can scroll down to topics of particular interest to you.
- Experience vs The Rookie
- Low % and Flat Fees – Lite Brands
- Discounted Fees
- Local vs Out-Of-Area
- Big Brand vs Boutique Brand
- Personal Tech/Apps/Website
- Network and Collaboration
- Differences in Appraisals
- Price to RV and Other Convoluted Statistics
- Number of Listings
- Strategy and Advertising
- We’ve Got the Buyers!!
- What matters most.
Experience vs The Rookie
Most of the time Experience trumps the Rookie because, let’s face it, if any outcome is critical you just don’t want to hear someone chirp “this is my first day” – ever.
Theory can get you through a straight forward transaction quite nicely but experience comes to the fore when things get tricky.
But also consider…
The Rookie: Every experienced agent was once a rookie. Dealing with a new agent can bring perks like enthusiasm and a strong desire to build a good reputation. Both traits that can benefit sellers provided they are accompanied by robust mentoring, willingness to ask for help and knowing when to do so. You really need to be comfortable that these are present otherwise choosing experience is a safer bet.
The Old Timer: Tenure in the industry matters little if it has been unaccompanied by upskilling and adapting as the industry has evolved.
Low % and Flat Fees – Lite Brands
Who doesn’t want more for less? Most of us grew up hearing “You get what you pay for”. And, as with everything else, this old adage also rings true in relation to real estate services.
But I would say that, wouldn’t I? Am I just being salty because I work for a traditional brand and charge a standard fee?
It goes without saying that there is a market for budget. But, generally, with low-cost products or services, there is a compromise on quality or features offered by their pricier counterparts. In short, a very low fee often means you are missing out on something important.
Here are some things to consider.
Focus and Attention
How many listings is the agent managing? If you are dealing with one agent only, their personal availability affects you significantly. What percentage of their time will be made available for your property?
Note: The above is a consideration for major brands as well but the impact on you of the above is likely to be exacerbated by a small or very thinly spread network.
Can more than one agent sell your property or will you have an army of one? Network matters.
Here are some questions to ask to establish your potential reach:
- Can multiple agents from your brand bring buyers through my property?
- When was the last time a colleagues brought a buyer through one of your listings?
- Will you work in with other brands on a conjunctional basis? Find out if they will proactively utilize relationships with agents in other brands.
Flat fees create a lack of incentive for your agent to push harder for a higher price.
If your agent receives the same compensation regardless of the price they achieve for you, why would they push harder for the maximum a buyer will pay? Why not just get you what you will take and move on to the next deal?
If the going gets tough will your agent remain engaged?
Working on commission is not an easy gig. Particularly when whether or not you get paid for your efforts is often influenced by factors beyond your control. Does the kind of fee you are paying really incentivize your agent to remain as engaged as you expect, prior to being paid, 7 days a week for an extended period of time?
Are you hiring a skilled operator?
Does the agent possess the right skill set to be increasing buyer perception of value in your property? The main reason you are engaging an agent is to get you more money than you could if you DIY’d it.
This is a question you should be asking yourself regardless of brand but even
The reality is that when your property hits the market you will be competing with every other seller with a similar property in your general vicinity. Your result is largely dependant on having an agent who understands how to compete and helps you to do so too – on something other than price.
A close cousin to lite brands. These agents work for mainstream brands but may reduce their fee substantially in order to gain your business. What’s not to like? You’re getting a mainstream brand for less.
Before you decide it’s a win, consider the following:
Agents usually discount because they are struggling to secure business at their normal fee.
And finally, consider how attractive working your property is going to look to the rest of the agents’ network. Telling your extended workforce “I’m going to cut your pay but I expect the same focus and dedication you give to your other clients who pay your standard rate” just seems somewhat counterintuitive. I would respectfully suggest you will get a better result working with human
Expecting an agent to negotiate a great result for you when you selected them based on ‘how low they’d go’ is flawed logic.
Local vs Out-Of-Area
Compared to an Out-Of-Area agent, a Local agent will hardly need to research so, in the research/appraisal stage they may have a days head start on an agent who is based further afield.
But gone are the days when Local agents had local data on lockdown. There’s not much a good researcher can’t learn online about your property and it’s location. A decent network will help them fill in the gaps.
If the Out-Of-Area agents brand is not well represented in your properties location, you will want to make sure that proactive networking is part of their standard service (see BIG Brands vs Boutique Brands).
If engaging an Out-Of-Area agent be sure to ask how the amount of time servicing your campaign will balance with their existing or upcoming commitments. Does the agent have back up available? Do they intend to conduct viewings or Open Homes personally or is it their intention to bring in an offsider? These are all relevant details you should get answers to and consider before you sign off on the Agency Authority. If you aren’t happy with the responses, go local.
BIG Brand vs Boutique Brand
At the risk of giving my boss a coronary, there really isn’t much difference here provided the brand involved is willing to network with other agents at a fair level and, at very least, not ring fence your property. If they aren’t team players then your odds are better with the BIG brand.
The smaller the brand the more proactive the networking needs to be because reach is less organic.
What does proactive n
Each brand holds real estate awards for all kinds of different things. Number of transactions, Number of Exclusive Listings, Number of Auction Listings, Gross Commission Earned, Vendor Paid Marketing (cringe) to name a few.
It is reassuring to know that your agent has won awards for performing well in various parts of the business. And, you don’t win awards unless you are doing some decent volume. Awards are a recognition of achievement and a source of pride for agents.
But what does that award mean for you?
How impressive an award is, is pretty subjective. What is it for? How many people did they compete for it with? How big is the brand? Incidentally, I have never heard of a brand that has a customer satisfaction award for individual salespeople. That in itself should tell you something.
In brief, an agents’ awards or ranking within their branch doesn’t really predict what your experience is likely going to be with them. But they are an indication that an agent is active.
Apps or websites personal to the agent or your property are the cubic zirconia of the real estate world. Sparkly but offering little value. It’s a nice add on and makes you feel a bit special but, other than that, what does it actually do for you?
How many people want their phone cluttered up with an App for an individual agent or brand? Has your first contact with a property you ended up buying been via the properties personal website, or
I rest my case.
Network and Collaboration
You want to work with an agent that will leave no stone unturned to find you the right
Proactive networking (actively reaching out to other agents within and outside their own brand) is better than Passive networking (saying ‘yes’ when approached) but both are better than nothing.
Read more about why this matters for you as a seller:
Differences in appraisals…
Agents are marketers not valuers. An overused phrase but a true one.
Appraisals are supposed to be based on facts – statistics and market conditions. Not intangible things like ‘gut feeling’.
Agents are legally required to give you an appraisal prior to listing your property. This is to ensure that you have a rough idea of what your property is worth based on recent sale prices for similar properties.
So, if there are adequate comparable statistics, why the difference between appraisals?
- Carelessness. Examples can include: Computer generated appraisals. Appraising prior to viewing (How can you compare something when you have never seen it?). Using statistics from a different suburb without good reason. Failing to compare like with like (ie. Monolithic with Brick).
- ‘Buying the listing’.This is industry lingo for inflating value based on what the prospective client wants to hear, and then proceeding to hammer them down (#educate) once they are tied into an Agency Authority. Don’t let it happen to you.
If you’ve had two appraisals that are miles apart, getting a third can be helpful as can carefully running through the comparable sales you have been given to give you insight into who is ‘out’.
Be careful about letting a high appraisal be the main reason you select an agent. The agents’ appraisal is confidential to you and won’t affect what you receive. Their strategy, network and negotiating skills will.
Ultimately, you are looking for competence and honesty with an appraisal, nothing more. Why? A realistic snapshot of what has happened already and an overview of market conditions will see you well positioned to accurately assess offers as they come in.
Learn from the mistakes of others and get things right the first time. Read: Breaking Up With Your Real Estate Agent. Is It Them Or Is It You?
Price to RV and Other Convoluted Statistics…
Blah blah blah…yawn.
While these kinds of stats can sound impressive they are only artificially so. Rateable Values in Auckland are extremely inconsistent. You can sell far above an RV and sell too low or $100k below one and sell high.
The other comparison can be ‘My Average Sale Price’ compared to ‘Other Agents Average Sale Price’. If we were all selling cans of Watties Baked Beans this would mean something but with the product variables in real estate sales it just doesn’t. This is a prime example of sales waffle used by some when the numbers run in their favor. It sounds good until you think about it. Unfortunately some people don’t.
Number of Listings
The main advantage of knowing that an agent has listings is that you know they are working. And seeing social proof that others thought
A high number of listings does not necessarily mean you are getting a better agent. How long have their listings been on the market? Will they have sufficient time to devote to your campaign in amongst their other commitments? If you list with them, will you get them – or an offsider? These are all things you should consider.
Make sure they aren’t spread too thin both in a geographic sense and in terms of volume. Could they conduct a viewing through each of their listings in an 8 hour day? If not, they might want your business but may struggle to deliver the level of attention you expect. No professional is available at a moments notice but reasonable availability is a fair expectation.
Strategy and Advertising
Who are your buyers? How are you going to reach them? What method of sale will get you the best money and why?
If an agent is promoting Auction I would expect to be told what the recent clearance rates are in my suburb. And also whether or not my target demographic is likely to secure the finance required to purchase at or before the Auction.
You should be given a clear plan and robust reasoning behind any proposed marketing investment. Your agent is promoting print media? Great! What percentage of their transacting buyers are coming off the paper?
Strategy is not religion. Creating a strategy around your property, current market conditions, your target demographic and your goals is what you are after. Be wary of a ‘one strategy fits all’ approach.
We’ve got the buyers!
What does every seller want? Buyers!!
“I’ve got buyers!” has long been the deal-sealing mantra of agents keen for you to sign on the dotted line. Only…
Every agent that wakes up in the morning and gets out of bed has buyers. Do we have the right buyer for your property? Maybe. But maybe not yet. Buyers are entering and exiting the market all the time
And no brand has ‘the corner’ on the buyers. Think about last time you looked at properties. How many Harcourt’s properties do you recall? How about Barfoots? Any Professionals? I doubt you can recall. Because you weren’t looking for an agent, you were looking for a property.
Pick the right plan and you’ll find the right buyer.
What matters most.
Pick an agent with experience or access to experienced support. Choose attitude, transparency, an appraisal based on fact, a strategy to shoot for more than your appraised range, good communication skills and a personality you can work with. And pick a team player because you just never know where your ideal buyer is going to come from.
Ask a lot of questions. This is your show not ours!
Good luck with choosing your agent! And wishing you a successful sale.
Have feedback for me? Or a question? I’d love to hear from you. Give me a call on 021 454694 or email me here.
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