After reading this article, you will know:
- Why the real estate agent is the most important component in the sale of your property.
- How to interview real estate agents to ensure you end up with the best candidate.
- How to identify character traits that are not conducive to the successful sale of the property
- Why the real estate agent’s appearance plays a big role in the successful sale of your property.
- How to check whether the real estate agent is qualified and legit.
- How to check whether the real estate agent is a good salesperson or not.
- How to establish rapport
- How to find out whether the real estate agent is an area expert.
- How to establish whether the real estate agent has a marketing strategy for your home or not.
- How to evaluate the real estate agent when it is time to talk listing price.
- How to negotiate the terms of the sole mandate
- How to check references yourself
Selling your house is a huge undertaking and you want to be sure that you do it right. The most important part of selling your property is choosing a qualified and competent real estate agent. As much as there are good real estate agents out there, there are equally bad and incompetent real estate agents who will promise you the moon, and when it comes to delivering on their promises they come up with every excuse in the book.
You want an area specialist to market your property.
Area specialists know the area and the suburb. They know how much properties sell for in the area, and they are familiar with what buyers are looking for in the area. They normally also have a long list of potential buyers on their books. The best way to find area specialists is to look at who is very visible in the area. In other words, who are the real estate agents who have the most FOR SALE and SOLD signs outside houses in the area. You’ll also know that these are the movers and the shakers.
Treat your real estate agent like he or she is coming for a job interview.
Contact a minimum of three real estate agents to come and give you an evaluation of your property. This is where the interview process starts. Pay attention to how they answer their phone. If they are not available, consider how long they are taking to get back to you. Consider whether they are prepared to jump through hoops to honour the appointment. You want a go-getter. You don’t want to compromise on your real estate agent.
Finding problems and making excuses are character traits.
If your first encounter with the real estate agent is met with a string of excuses and no solutions to the problems, then this is not the type of person you want to market your property to. Finding problems and making excuses are character traits. Some people always find and see a problem in everything, and they make excuses for everything. These people will never own up and take responsibility. This is most certainly not the person that you want to entrust in selling your property.
Consider the real estate agent’s appearance.
When the real estate agents arrive at your home, you should look at how well they are groomed. This is important. It shows whether they take pride in their work and their appearance. This is also the image that potential buyers will get from them, and since they are representing your property in the marketplace, you only want your property to be associated with the best.
Ensure your real estate agent is qualified to sell your house.
You want to be sure that the real estate agent is qualified and legit. You achieve this by asking the real estate agent to see a copy of his or her Fidelity Fund Certificate. Sometimes he may still be an intern real estate agent. That is okay. You just need to find out who the qualified real estate agent is that they are reporting to. Remember, even though an intern real estate agent may market and sell properties, they may not take written offers from potential buyers. They have to be accompanied by a qualified real estate agent when they take the offer.
How to check whether the real estate agent is a good salesperson or not.
You also want to know how many properties they have sold in the last three months, and whether they have sold anything at all in the last three months. The way they answer that question will give you an indication as to whether they are good salespeople or not.
Good salespeople sell in any market condition. They are confident and optimistic.
If they can answer you with confidence you know that you are on the right track, but if they start with excuses like, “the market has been quiet” or they “Umm and Ahh”, you should know that an “excuses” personality trait is coming out. Again, this is the type of person that will always have excuses. Remember, just like there are good lawyers and bad lawyers and good doctors and bad doctors, there are also good real estate agents and bad real estate agents.
Do you have rapport with the real estate agent?
You want to establish whether you have rapport with the real estate agent. Since the two of you will be working very closely for at least three to six months, it is particularly important that you get on well with each other. Some people get on with each other and some don’t. It is no one’s fault, it simply means there is no chemistry, and that’s fine. You can establish rapport by seeing if you have similar values, whether you like similar things, even something as simple as your children that go to the same school can help with establishing rapport.
Next, you want to understand how well they know the area. Ask questions like:
- Who are the typical home buyers in the area? For instance, are they investor buyers, families, single professionals, etc.?
- What are these home buyers generally looking for in a property?
- What is the average market value of properties in the area?
- What is the average time that a property stays on the market in the area?
- Do sellers normally get their price?
- What are the municipal by-laws in the area?
- Do they know of any new amenities or public infrastructure that is planned for the area?
By asking these questions you have an idea of the type of conversations they will have with potential home buyers.
Now for the golden question:
Do you want to know what marketing strategy they will follow marketing your home? If the answer is something like, “We will list the property on Property24 and Private Property” and not much more, you know you are dealing with what is commonly referred to as a “portal agent”. These are real estate agents who list your property on the portals and wait for a bite. This is not ideal. In fact, it cannot even be called a marketing strategy. You want to hear things like “we will run a social media campaign where we will do this and that”, and “we have a mailing list of x number of potential buyers whom we will market your home to” and “we have a professional photographer who will come and take stylized photos”, and “you will get a weekly report on our marketing activity”, etc.
How to evaluate the real estate agent when it is time to talk price.
At this point you let the agent take a walk through your property and after the walkthrough you can now let him or her know how much you want for the property. Once you have given your ideal sales price you keep quiet and wait for them to respond. Their response will say a lot.
Whether they say it is too high, exactly right, or too low, ask them what they base their answer on and whether they are comparing apples with apples. Look at their body language when they talk. How do they come across when they tell you that the price is too high, or the price is spot-on? Are they sharing facts, or are they sharing opinions? Opinions are cheap. Anyone has those. You want to see a real estate agent that is confidently sharing facts. You want to see documentation with comparative prices of other properties that recently sold in the area. If it is a good real estate agent, he or she will have that information in the initial meeting. He would have done his homework on the area and your property.
At this point, you can ask about their commission structure. Most traditional real estate agencies work on a commission structure of between five and seven percent. Don’t just accept their commission structure. Remember you are the client, they are there for your business, you hold the power, so use this to your advantage to negotiate.
I personally find that the following commission offer works the best: I normally offer the real estate agent a 4,5% commission of the total sale of the property, but then I incentivise them to sell the property quickly. If they bring me a buyer within the first six weeks of the property being listed, and the sale goes through, I will give them 6%. This is a great incentive for the real estate agent to work really hard at marketing your property and selling the property quickly.
A good real estate agent will have a “Challenge accepted” attitude and a real estate agent who is not comfortable that he or she will be able to sell the property might not be so open to your offer. This is another way of seeing who you are dealing with and whether you want this person to sell your property for you.
Negotiating the terms of the sole mandate
Now it comes to discussing the terms of the sole mandate. This is an agreement where you commit in writing that no other real estate agent, or yourself for that matter, will market your property for a period of three months.
Every real estate agent wants a sole mandate. They never want to share the marketing of a property with another real estate. Remember this is a binding contract and if you are going to give the real estate agent a sole mandate, you want the sole mandate to tell you what you will be getting in return. This must be in writing.
You want the sole mandate to include…
- The marketing strategy
- The weekly reporting
- The number of show days during the sole mandate period
If the real estate agent does not deliver on the terms in the sole mandate, he or she will be in breach of contract. If they don’t rectify this, it gives you the opportunity to terminate the contract.
If it is not clear what you are getting in return, you might end up giving a sole mandate to a real estate agent who will do very little during the three-month period, and you’ll be stuck with an incompetent real estate agent for three months.
Never sign the sole mandate on the spot. Let them know that you are still interviewing other agents and you will get back to them within a couple of days on how you plan to move forward.
Lastly, mention to the real estate agent that you have noticed that they have a couple of FOR SALE signs in the area and whether they would mind if you get a reference from one or two of those sellers.
Again, here you can take note of their body language and their response. If they are confident in their response you know they have nothing to hide (however, still get the reference) and if they are caught off guard, you definitely want to pay those references a visit before you decide to appoint the real estate agent to market your property.
So, as you can see there is a lot that goes into appointing a real estate agent. Pretend you are a CEO of a big company and you are interviewing a particularly important candidate in your firm. You don’t want to make a mistake on this one.
Good luck with the sale of your home and may you find the ideal real estate agent that will serve you well.
(Last updated 4 February 2023)