8 QUESTIONS ALL HOME SELLERS MUST ASK
Introduction
When choosing a real estate agent as your representative, the questions asked will dictate the information you uncover and hence the agent you hire. All agents should have a strategy to sell your property, however they will often only share certain points while avoiding others.
Some agents may focus on the dubious benefits of an auction campaign whilst failing to disclose an auction’s inherent financial risks. Others may talk a good marketing game yet spend no time discussing what is an agent’s key value to you, negotiation of the best price.
Here are the ‘8 Questions that All Home Sellers Must Ask’. The answers to these questions will provide all the information needed to decide if an agent’s strategy and philosophy is right for you.
Question #1 – Agent Selection: What sets you apart from other real estate agents?
Look for answers beyond the superficial. Examples may include “I sell lots of houses in this area”, or “our average time on market is only 22 days”.
Be wary of agents that are self-focused, especially those who simply sit and gloat about property they have sold. Good agents will focus on you and your goals, and how they can help get you where you want to go. Good agents are well trained in methods and strategies of sale that benefit you, the seller.
Decide what it is YOU are looking for in an agent.
Agent selection is a key factor in making smart selling decisions. Your agent will make – or at least guide – decisions around price, method of sale, use of advertising media and marketing.
Hiring the right agent to sell your property is crucial. Hiring the wrong agent costs a lot more than just their selling fee. Take great care when deciding which agent to trust.
Question #2 – Method of Sale: How would you take my property to the market?
When answering this question, good agents will discuss the Smart Sale method currently being used throughout Australia with great success. As well as providing financial safety, this method of sale allows home sellers to test the market without damaging the digital footprint.
Your property’s digital footprint is important; it is your property’s online traceable history and can heavily influence the final price obtained. To safely market a property and obtain the highest price, a strategy must exist to manage the conflict that arises between digital advertising and the digital footprint.
Any agent you interview should be able to discuss their strategy for managing this conflict.
Many home sellers have a legitimate fear (a very real danger) of underselling their property. Because, once it’s sold, you’ve lost the chance to make any more from that property.
Agents should be aware of this, and be able to discuss the many factors that can drive a sale price below market value, including poor marketing, a price indication that is too low, an asking price that is too high or an agent underselling a property to a friend or colleague (real estate’s version of insider trading).
To avoid underselling a property, it’s important to understand the strategies and methods agents are likely to recommend, what they are designed for and the significant part agents play in selling property. The chosen method of sale will affect the type of marketing, the initial outlay of costs (if any), the price quoted in advertising and – most significantly – the final price achieved.
Question #3 – Price: What price do you think my house is worth?
While seemingly an obvious question, agents will rarely give a clear and direct answer.
The two most common lies told in the real estate industry involve the price estimate quoted to potential sellers. They are:
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The improbable lie: this is when an agent intentionally inflates a property’s potential selling price; it’s the lie most people are aware of and dislike about real estate agents.
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The lie of omission: this is when an agent, knowing the probable selling price, chooses not to tell the owner; it’s a more subtle lie, but still prevalent in the industry.
Both have the capacity to hurt you financially and emotionally. An agent who is honest about all facets of selling, including price, is a rare, true professional. They deserve your trust.
Ensure any price discussed with a potential agent is based on evidence in the form of comparable, recently sold properties in your area.
Remember, a real estate agent should be chosen on their ability to find the best buyer for your property and to negotiate that buyer’s maximum price. This often means as much as $10,000 or more in your pocket.
Agents should not be chosen on their ability to simply quote the highest price.
Question #4 – Marketing: How much do I owe you if the property doesn’t sell?
Agents love to discuss marketing. It’s often glossy, exciting and the main part of their presentation. Yet how much of it is necessary?
Most agents will claim that ‘you can’t sell a secret’. However, in the world of low cost online marketing, detailed buyer databases with filtered searches and new property alerts – agents struggle to convince smart sellers to pay upfront for largely unnecessary marketing campaigns.
To make smart marketing decisions you should consider the cost of advertising and the quality of marketing.
Agents and media companies encourage sellers to focus on the amount, size and positioning of advertising, all of which come with extra cost. However, quality marketing is a cost-effective alternative that generates the same, if not better results.
Not all property sells with their first agent. It is not uncommon for auction clearance rates to be as low as 35%. Yet sellers are bearing the marketing costs of these failed campaigns, as agents walk away scott-free.
The true test of any marketing campaign is its end result. Is the property sold? If the answer is no, then why should you, the home seller pay?
To attract buyers to a property you need quality marketing. Quality marketing includes the right price, good quality photography, a great script and smart recording of buyer enquiries. None of these requires extensive, expensive advertising. Quantity and positioning, the two factors that add cost, run a long way behind quality marketing.
Remember the golden rule of selling, pay no money, until your property is sold and you’re happy with the outcome.
Question #5 – Inspections: How do your buyer inspections impact your negotiation strategy?
Smart sellers will look to see if the agent has given consideration to how buyer inspection methods affect the final sale price. Does the agent understand how the inspection ties in to the negotiation?
Any time a genuine buyer wants an inspection, the agent should arrange it. In a stable or falling market when there are fewer buyers and more properties for sale, forcing buyers to wait for a scheduled open home increases the chance they will purchase elsewhere. A private appointment to inspect, set promptly, increases a buyer’s expectation this property will sell quickly, which strengthens the seller’s negotiation power.
When conducting an open home, a professional agent will always record buyers’ details and contact information before they enter the property. After the open home, effective follow-up is essential to an agent understanding any interested buyer, their motive and their budget.
All necessary factors when negotiating you the best price.
Good agents have knowledge of a buyer’s wants and needs. They develop a relationship with the buyer that is the key to successfully negotiating you the highest price.
Although there is no definite right or wrong answer to this question, good agents will have given serious thought to this question and be able to articulate their reasons for the methods they use.
Question #6 – Negotiation: Can you explain the framework of your negotiation strategy?
Does the agent have a negotiation strategy? The answer in the majority of cases, is no.
Be careful, many agents don’t understand negotiation and instead choose to discuss their ‘offer process’. This is NOT negotiation. It is simply the conveying of an offer from the buyer to you, the seller. Smart sellers realise this isn’t a negotiation strategy, but rather an expensive alternative to email.
Home sellers often overlook the true value of a real estate agent, which is found in their negotiation strategy, skills and tactics employed after an interested buyer is found. The method of sale, the marketing, the pricing and the inspections all lead to this final negotiation.
The contract negotiation is the last chance for you to profit from owning this property. An agent with great negotiation skills and the right strategy can make a difference of tens of thousands of dollars.
Smart sellers understand an agent’s most important duty is that of a negotiator. Ensure your agent has a proven negotiation strategy focused on one goal: achieving the best possible result for you.
Question #7 – Costs: How does your fee compare to your value?
With regard to agent costs, an agent must add more value than they charge.
Often people will hire an agent based on the answers to these two questions: How much will you get me? What do you charge?
On the surface these questions appear to be a fair and reasonable way to choose an agent. However, they are the wrong questions.
Smart sellers understand that superficial questions invite superficial answers. You have to dig deeper than the superficial to make a smart decision.
Consider this, if an agent charges an extra $5,000 yet obtains $20,000 more for you because of superior negotiation knowledge and strategy, that agent is $15,000 more valuable to you than the cheaper competitor.
Any agent being interviewed must be able to prove their value to you.
Always consider value as opposed to cost when selecting an agent.
Question #8 – Guarantee: Can you guarantee you’ll live up to your promises?
Guarantees give home sellers the peace of mind that if they’ve chosen the wrong agent to represent them, they are not stuck with this agent.
Under various guises, almost all agents offer some sort of guarantee, such as ‘Our promise’, ‘Service Plan’, or ‘Our Commitments’. These promises, plans and guarantees are good, but all are useless in holding the individual agent or agency to account for the effort, implementation of strategy or results achieved, unless there is a recourse for the owner.
It is an unfortunate truth that you should never accept an agent’s promises at face value. Because of this along with your agreement, agents should offer a dismissal clause; allowing you to end the agreement if the agent doesn’t deliver on what they said they would.
A fair dismissal clause should allow the agent a brief period to resolve any problems, and continue as your agent if they do.
Smart sellers know that if an agent is not prepared to back their service with the guarantee of a dismissal clause, then they are not the right agent for them.
Conclusion
As a seller, approach the process of finding an agent as a job interview, and remember that you are the employer. As a potential seller you are the most in-demand person in the real estate industry and at the forefront of every agent’s mind.
Put potential agents to the test. Ask the right questions and ensure you get the right answers. Give the agent enough time to demonstrate their sustainability. If you’re not satisfied, keep interviewing agents until you are.
Use this information as a guide to ask the right questions and the answers will help you to choose a good agent. We hope this information has put you on the road to being a smart seller.
Please feel welcome to call us if you have any questions, either on the points raised or anything else real estate related.