How sellers interview agents

Let us assume you have already assessed the Realtor’s ability to communicate (see parts one and three of this series). You still need to probe other areas: knowledge of your particular neighborhood; a detailed understanding of how to effectively market your home; and technical competence.

Knowledge of your neighborhood

In a 1995 article, Understanding The Market, I explained the inter-relationship between a particular neighborhood and the larger market of which it is a part. The agent you choose must have an in-depth understanding of both. As with most things, this comes from experience.

Question:Tell me about your experience selling homes in the area. This allows the agent to talk about buyers as well as sellers he or she has represented in your community. Remember that the Realtor who sells the most homes in your vicinity may not necessarily be the one who will do the best job of representing your interests.

Question:Which recent sales in the neighborhood do you think serve as good comparables to my property? Whenever pricing is discussed, in the first or second interview, the agent should offer this information. If he or she seems fuzzy and unsure (unless you have a unique property), put him or her at the bottom of your list. The Realtor should also mention which currently listed homes are competition for yours, which are pending sales and which were on the market and have now expired. These are all part of a “Comparative Market Analysis.”

Question:In recent months, how long has it taken to sell well-priced homes in my price range? You are asking whether it is a seller’s or buyer’s market, or neither. If “reasonably” priced homes are taking more than three to four weeks to sell (assuming adequate exposure), it is a buyer’s market. This means that after establishing your asking price, you will need to keep reducing it at least every month until it sells. If you are not willing to do this in a buyer’s market, consider selling at a later date.

Question:How does the direction of prices in this neighborhood compare to other parts of the city (or county)? This question will help you determine the agent’s overall understanding of your specific situation in relation to the bigger, local picture. When discussing time frames, three to six months is “recent;” longer than one year is not useful.

Note that a property which closed escrow in January may not be an accurate comparable for a listing in June if the market has changed during that time.

Question:What asking price do you suggest that will result in an accepted offer within thirty days of marketing? Even if you do not plan to move for sixty or ninety days, it is definitely to your advantage to have a ratified contract within the first three to four weeks on the market. After that time, your net proceeds will likely diminish as your days on the market increase. Whatever price is recommended, ask why that price and not higher or lower. This should lead back to a conversation about comparable sales.

Very important — under no circumstances should you choose an agent simply because he or she indicates the highest price. In the lingo of real estate, this is called “buying a listing,” and will almost surely cost you dearly in the pocketbook. The purpose of your interviews is not to find an agent who will give you the highest “bid;” it is to find one who will do the best overall job of getting your home sold, protecting you in the process.

Marketing

As I have said before, marketing is essential, but overemphasized by most sellers, as well as many agents. No amount of marketing can undo the damage of overpricing. The converse also applies — it is amazing how little marketing is required and how quickly properties sell when sharply priced.

Question:Tell me about your marketing program. This is the part where most agents will pull out their thirty to sixty-page, spiral-bound listing presentation book. If you have time to read everything in these books, congratulations on your retirement.

Experienced agents all have a “marketing plan” with up to one hundred items on it. Except for upper-end properties, which require more expensive and extensive (although not necessarily more effective) marketing, there are only so many activities an agent can perform in this arena.

There is one thing, however, that is absolutely critical for you. Once you list, unless you need time to prepare your home for sale, insist that it be entered immediately on the Multiple Listing Service. This will prevent a “pocket listing,” where the home is not actively marketed at the beginning so the listing agent will have an opportunity to “double-end” the sale. This, obviously, would not be in your best interests.

Question:How saleable is my house as you see it now? Another way to ask this is, “What would you recommend to make my home more saleable or have it sell at a higher price?” You will get a number of enlightening responses from your interviewees. Don’t ask if you will take the answer personally.

Marketing is about publicizing your home to the maximum number of potential buyers. It is also about creating the most favorable impression once they come to see it. The majority of homes I see every week could use some improvement in presentation, condition or both. This is called “staging,” and could include as little as touch-up painting and cleaning or as much as a major overhaul and rented furnishings.

Not everyone is open to these changes. There may be financial, health, time or emotional considerations as to why a property does not “show well.” Those two words are a Realtor’s cryptic way of saying the seller will not get a premium price in its present condition.

With the above two questions, you should be able to get an abundance of information on how each agent will market your home.

Negotiating

Technical ability is an underestimated and little understood category, but vital for sellers to explore. I discussed this in part two. Negotiating, however, is such an indispensable aspect of technical ability, I will elaborate on it further.

Think of the entire time you spend with each agent as one long negotiation. They want the listing, or else they would not have come. You want the best representation and the highest net with the least aggravation. How the agent deals with you and responds to questions will be an indication of how he or she will negotiate for you later.

Question:Do you like to negotiate? This is purposely a “yes” or “no” question. When I ask people if they like garlic, those who do always reply “yes” quickly. Similarly, those who like to negotiate will not hesitate to respond in the affirmative. Those who do not, must be eliminated. If you do not like to negotiate yourself, you certainly need someone who does, to do it for you. If you are a negotiator, you will not be satisfied with someone who is not. Either way, only negotiators make the final cut.

Question:Tell me about your negotiating style. My style is to assume that everything is negotiable. I make concessions only in exchange for something of value from the other party. Of utmost importance is that I always discuss strategy with my client first and proceed only upon his or her instructions.

For example, in one of my recent listings, the seller did not need her appliances. I explained that she could either offer them as part of the purchase price, or not include them and use them as a potential bargaining chip later. She took my advice of holding back. After inspections, when the buyer requested money from the seller, this amount was minimized because the appliances were now included.

Question:Give me some specific instances of how your negotiating skills benefited your sellers. After the examples, ask if it would be okay for you to call those sellers.

Final thoughts

In addition to a facility at communicating, neighborhood familiarity, marketing expertise and technical proficiency, there is one intangible of maximal significance — caring. An individual may possess all the tools, but having your best interests represented by an agent takes a special kind of caring. Look for this as you meet with each person. Asking directly will not help, so trust your “gut” on this one.

I received a letter from one of my sellers the other day shortly after his home had closed escrow. He acknowledged my efforts and actually created a category I had previously called my “hand-holding function.” He thanked me for being his “Spiritual Advisor” (dramatic license on his part) during the listing and escrow period. He said, “...when the months slide by and the house isn’t selling, it can become downright discouraging for a seller. You always had an encouraging word (and a believable one at that) which certainly helped keep my chin up, and kept me going.”

May you be successful in finding your own “Spiritual Advisor.”

Related Articles: How to Interview Agents, Part 1, Part 2, Part 3; Use Local Agent; Clarifying Reality; Another New Contract, Part 1 and Part 2; Not Just Termites, Part 1 and Part 2; Are Permits Important?; Check Drainage; What Is A Bedroom?; Understanding The Market; Protecting Sellers; Why Expireds Expire; Selling By Yourself, Part 1, Part 2, and Part 3;  FSBO Redux; Protecting Sellers; Sharing Information