PROPER REPRESENTATION MATTERS. Reduce your risk, Choose the right Realtor!
Sellers are often confused as to what makes a good Realtor® for listing their property...Is it being "Number One" or should you, the Buyer or Seller be number one? Is it their service fee (commission) that overshadows their adherence to the other factors you MUST consider when making your decision.
IMPROPER PRICING OF A PROPERTY:
Pricing at or near market value will always make a property easier to sell and within a shorter time. The fact that a house sells quickly does not mean that money has been left on the table if all the research has been done and the marketing has alerted potential Buyers to the property.
Speak to an agent who is honest when it comes to price. You do not want to pick someone who over promises a price and cannot deliver. What happens all too often is a homeowner will consider two or three agents. They likely select the agent who tells them that their home is worth the most, rather than the more accurate number. The home will sit for 3-6 months and that agent will likely try and have the homeowner reduce their price to re-stimulate the property. Given the reduction in price and staleness on the market, potential buyer clients are left in the drivers seat, and feel they have the upper hand in negotiating. I've seen this happen to often. Find an agent who gets REAL results.
Most of the time It’s a beauty contest and price war, we have to find the balance. We can put it on at a price that helps others sell, or we can put on at a price that helps yours sell.
Pricing Do’s and Dont’s
Are you familiar with the contrast principle? Bottom line: Don’t be the set up house!
No. 1: The real estate market is like the stock market
When sellers purchase their property in a heated market, it may be years before they can recoup their previous purchase price plus their cost of sale. Nevertheless, many still believe that when they list their home for sale, their price should be based upon their acquisition costs. This belief leads to extended listings, and frustrated sellers. THE MARKET DETERMINES THE PRICE, We analyze it to provide you with the right information to allow you to make the most informed decision
No. 2: Your house has to qualify
The house, not just the buyer, must qualify for the loan. When your home falls within the 80th percentile of GTA homes, your purchaser is more than likely going to be paying 20% down or less for the home. This being said the bank will only loan the purchaser the money if the valuation is correct or within the realm of correct. The purchaser may remove the home finance condition within the 5 day period, the bank may do the appraisal 2 weeks prior to closing, if they do not agree with the price the purchaser would be on the hook for the difference of what they paid and the banks appraisal amount. If they cannot come up with this money then the deal would default and your (homeseller’s) future plans would have a major wrench thrown in
- RLP tool
- RBC tool
- My research
No. 3: Are you in the X percent that will sell this month?
The rate of absorption (how quickly properties are turning over) or MONTHS of inventory, is pertinent to the success of your sale! If you want to sell in a given month, you must be in top tier of properties by both value and price in that location.
LACK OF DUE DILIGENCE:
Using a local Realtor® who is aware of what to look for and has done the proper due diligence is important. Is the area affected by Termites or Carpenter Ants and has there been a building inspection? Has the Realtor® searched the title and asked all the proper questions and offered solutions?
Home ownership is one of life's largest investments and it should be left in the hands of somebody who truly specializes in the area. Consider this; your home is for sale with a Toronto agent. They receive a call from the sign on your front lawn, and the potential buyer wants to see the home within the next hour, it is unlikely that they will be able to show the home given the short notice. Second of all, it takes true knowledge of the inter-workings of a neighbourhood to answer the questions that most buyers have, not just information that they have pulled off the internet.
DID NOT EXPLAIN THE PROCESS:
The selling process is much more complex than just picking a price and putting the property on MLS. Has the property been staged to highlight the benefits while hiding some deficiencies and has a schedule been agreed upon to allow the maximum number of showings and family flexibility for ease of access by Buyers and their agents. Legal responsibilities must be explained and fulfilled.
DOES NOT HAVE THE PROPER MARKETING SKILLS:
Once a price has been agreed upon and you have moved to the market place does the Realtor® have the experience in marketing. Times have changed and newspaper ads are not bringing the Buyers that websites and social media are today. Getting the house ready for sale with a supporting team is huge today
IS INFLEXIBLE OR LACKS CREATIVE SOLUTIONS:
Sometimes your Realtor® needs to be looking for flexible alternatives. Once, in a difficult market, I had clients that wanted to buy a specific property but could not do so without a firm sale on their home. The house they wanted had been on the market for a while and was quite idiosyncratic. When I appeared with an offer conditional upon the sale of the buyer's house, we turned it into a firm deal where houses were traded and some cash was added so my clients could achieve their goal....A solution that would never have been achieved had the listing agent not been creative and flexible.
I also had a situation where, after multiple offers on one of our listings the buyer got cold feet and did not want to deliver on his promise of delivering the deposit cheque. Rather than call my clients with the bad news, I had called one of the other agents who had competed for the property and lost the night before. I told them to resubmit me an offer that was equal to the price of the deal that had one, they agreed. I then got to call my client to deliver good and bad news. Had I just delivered the bad news im sure they would have been heartbroken.
HAS DIFFICULTY WORKING WITH OTHER PROFESSIONALS:
Ego can get in the way in any negotiation...the "Do you know who I am?" monster can raise its head whether you are dealing with the other agents, sellers, buyers, mortgage providers or any parties to the transaction. I often assume that not only will I have responsibilities to do my job in the best way possible, but I would also be willing to do the job of the other side to make sure that all details are looked after. Well known within the agent community as a team player.
DOES NOT HAVE A GOOD TEAM OF PERIPHERAL PROFESSIONALS:
Knowing who to suggest to the Buyer or Seller so that they have the best professional advisers is key. Trying not to overstep our directions to the client by delving into advise that should be provided to the Buyer or Seller by a professional immersed in the subject is key. Adorna Carroll puts it well when she says, "you must be the source of the source...but not the source...". In other words you must be the access to the best team of peripheral professionals.
LETS DETAILS SLIP THROUGH THE CRACKS:
Sometimes, in the rush to getting the best price possible, Buyers and Sellers forget to look for the details that can cause drama as the deal moves towards closing. Trying to keep both parties calm and pointing out details that could cause problems at a later date.
HAS NOT PREPARED CLIENT THAT FEES, INCLUSIONS, AND DESIRED ITEMS ARE MERELY A SUGGESTION:
Often in trying to negotiate a sale, price is not the only issue that is negotiated. Trying to be flexible with the other offerings other than price can make or break a deal. Inclusions can be the hold out issue in completing a deal putting thousands of dollars in jeopardy, when the inclusion could be replaced new for hundreds of dollars.
So remember, when searching for a listing agent, make sure that costs are not the only thing that are driving the bus and make sure you ask questions of the agent and their previous clients. Ask for referrals!
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QUESTIONS FOR interviewing REALTORS
- Do you have references from other homeowners (IN THE AREA)
- Do you track your sales stats?
- Can I have a Comparable Market Analysis
- Is the Area growing or declining
- Are you part of a team? How many in your office?
- How many clients are you currently representing?
- How will you market my home?
- How do your fees work?
- What experience do you have?
- How will you keep me informed?
- Tell me your general approach to buying or selling and how your approach would best suit my needs.
- Tell me about the services you would provide and any different options or services that may or may not be included
- Lookup competing brokers: http://www.reco.on.ca/realestate-pro-search/
Mistake: Not making your expectations clear with your real estate representative
In any relationship, communication is the key to success. It’s important that your real estate rep understands what you’re looking for in a home, what elements you would consider to be deal-breakers and what services they will be responsible for.
After you’ve had a thorough conversation about what you’re looking for (and not looking for), it is in your best interest to document this information in the form of a written representation agreement.
Those are a couple of mistakes that some buyers and sellers make when entering the real estate process.
If you are interviewing multiple realtors what’s the most ideal qualities you are looking for:
i.e.During this important time, we like to understand what is most important to you. (realtor commissions, price, service, knowledge, quick ect)
Whats all of this cost? Read here: http://www.buschteam.ca/b/blog/recent-posts/the-commission-question.html