Selling your home can be a stressful experience. We put together these tips on how to choose the real estate agent who is best for you. These are generalised recommendations, applicable to most situations, but subject to specific individual State or Territory Laws and regulations.
Engaging a real estate agent to sell your property
Our tips are generalised, but a pretty good starting point.
Whether you are retired or retiring and downsizing, upsizing, first home selling or experienced vendors, this post should provide a handy aide memoir.
If you have only ever bought in your own area, town or been in your home for a long period, you may not be too familiar with local Real Estate Agents or the market in your current location. Whether you’re moving to the next suburb, or moving to Queensland, the same rules apply, do your due dilligence.
Please remember, agents will operate differently in different states and different areas based on a combination of laws & regulations, number and type of competition they have, local knowledge and experience, and lastly, and perhaps most important, their personal professionalism and personality.
You need to feel comfortable with the agent you choose, particularly with respect to how they treat you. A good rapport always helps in conducting business. No one should be harassed or bullied into giving their business to anyone: if you see the signs, consider your position carefully before proceeding
Where do I start with finding a real estate agent?
Ask friends or acquaintances whose judgement you respect and are in your local area; ask them for recommendations and why they would make those recommendations. Check agents reputation and references https://www.ratemyagent.com.au/ & https://www.realestate.com.au/find-agent
After doing this research you should be on the way to talking with three or four agents to make a your own comparison.
Be prepared for your discussions
Think through what you maybe looking for before contacting agents, as they will usually go to quite some effort to provide information on your sale and the market before meeting with you. Be considerate of the agent’s time spent offering their services to you.
It may be valuable to have a building inspection done, formally or informally, to forewarn you of anything that may arise from an agent’s assessment or that may come up from a potential purchasers “Pest & Building” report.
Basic Principles
Agents only stay in business if they have listings, so getting you on their sales books is a very competitive process for them.
Like all people in business, Real Estate agents all try to offer a unique sales proposition, so they will often suggest their own quirky ways of selling and associated services which will make them the chosen agent to list your property. These approaches are all designed to get your attention and provide them with the opportunity to sell your property.
A personal example of quirky was a Listing Agent who proposed that we allow them to run a small cocktail party in our home early one evening and invite their “A” list people. These people were not potential buyers for our property, but they were the Agents extended influencers on others, looking to capitalise on the oldest and best form of selling, “Word-of-Mouth”. In a small community this can work brilliantly
The agent is supposed to work for you, not the buyer. Thus, disclosing information about your circumstances to a prospective buyer e.g. which may involve an urgent or forced sale, is unethical, unless you have instructed them to do that. That behaviour is not unknown and may elicit lower offers than you could expect just so the agent can make a sale. We prefer to keep such information to ourselves in any case, it is generally not in the seller’s interest to disclose any pressures you may be experiencing.
How to sell your property – Setting a listing price range and agreement with your chosen agent
There are two rules in selling real estate:
- Your property is worth what someone will pay for it at the time, and
- You only need one real buyer.
Variations around that theme will be the degree to which the agent can coax more dollars from the buyer for your property and ensure they will go through with their offer and complete the sale. For this reason, in a rising market, an auction may be a good option, particularly if you have at least two, and hopefully more, people interested in buying. If you are in doubt, being provided with an assessment of whether you are in a falling, static or rising market is very important; this can provide direction to proceed with your sale.
You may consider a non-exclusive agency i.e. giving sales rights to 2 or more agents. Agents do not usually like these arrangements and thus your property may get diminished attention from any given agent in terms of how they market your property. Think about that from the agents perspective; how much effort do I put into this? Choosing an exclusive agreement with one agent does not stop a second agent, seeking an “in conjunction “ deal on the sale of your property, whereby they will receive a percentage of the sale price from the Listing Agent. This arrangement is largely between the two agents, but can sometimes “muddy the waters” in the sales communications process. It can also be effective, again trust your instincts on this, what extra value is the ‘in conjunction’ agent bringing to the process?
Whilst there are do-it-yourself options, one advantage of going with an agent to sell your property is that all agents have prospective buyer databases and this list of potential buyers can be very valuable to you. If you are planning to sell the property yourself consider how effective your marketing will be, for example, quality of images? A professional photographer can make a very positive difference.
Ethics and real estate transactions
A common ploy by agents is to overvalue your property to get your listing, which simply ends with them telling you that rule #1 above applies, but they have your listing locked in and expect to get their commission if they sell, at whatever price. It is not easy to terminate an agency agreement without a lot of angst and ill-will, so choose carefully; not just your agent but also the length of the exclusivity agreement.
In states where gazumping is legal, like Victoria, agents will often treat potential buyers appallingly by effectively running a secret auction, telling them “someone has made a better offer, would you like to increase yours?”. This can play in your favour but can be infuriating for prospective purchasers who may just walk away from a possible purchase; at least in an auction, buyers can actually hear what is being bid. Know and understand how your agent proposes to sell your house e.g. open listing with price, POA, call tenders, auction. Also understand the differential costs and likely timelines associated with the various methods.
If you have problems with an agent, contact the Real Estate Institute in your state https://reia.asn.au/the-institute/members/ before embroiling yourself in legal action.
Agents reaction to your property
Usually agents seeking your listing will find positive aspects of your property to push during the sales process. Agents who run your property down (“Its style is dated”, “Kitchen needs refurbishing” “Bathrooms are out-of-date” “Not in a good area” – particularly things you cannot (or are unlikely to) change before sale) should be warning signs for you. If they are making those comments to you as a vendor there is a good chance they will talk your price down with a prospective buyer.
You want someone positive working for you. This is why terms like ”great opportunity” or “renovators delight”, “priced to sell” etc. are seen in real estate ads. If the agents pitch positively and honestly to people that are likely to buy your property they are not wasting your, and their prospective clients, time showing buyers unsuitable properties. An agent that indicates they would be happy to show and sell your home (not just to get your listing) is clearly a better bet to run with.
Dealing with offers made via your real estate agent
Depending on your individual circumstances, what you may want/be prepared to accept will obviously vary considerably.
The primary elements you should consider are:
- Price
- Subject to e.g. pest and building inspections, finance
- Settlement period once the contract “goes unconditional”
- Deposit percentage (and if the buyer will allow you to access the deposit once paid)
These elements are not mutually exclusive. The price you accept may be determined by the fact you have a cash buyer who can provide an ‘unconditional contract’ right from the beginning, compared to a buyer who has to sell, get finance, wants further pest & building inspections etc. If you have to buy a replacement home, an extended settlement may be preferable for you. Or a quick settlement may be preferred so you have access to capital, but you might also prefer a leaseback/rental-under-licence while you secure or complete construction of a new home. Make sure all these issues are clear to your real estate agent and are spelled out in your contract.
A couple of final thoughts on engaging a real estate agent
Don’t ask questions while Agents present to you, let them tell you … until the end! Then ask about what they haven’t already told you – be prepared with your list of questions.
Have you had a positive experience with selling your home ? Or a horrible experience you would like to share?
