Choosing the right agent to represent you can make a difference of tens of thousands of dollars and save you a whole lot of heartache. So, it’s important to do your research on real estate agents in your area to make the best choice.
Most sellers have the same very reasonable objectives: to achieve the highest possible price for their property, keep as much of the sale proceeds as possible and have a stress-free experience. You may also need a quick sale. But how do you achieve those goals?
Negotiagent is a marketplace where you can see who is out there and what they’ll offer you. But you still need to make the decision for yourself. So here are some tips to help you hire the best agent
Many sellers will choose one of the highest selling real estate agents in their area, after all the sales stats prove they’re successful. But a huge part of being a successful agent is the ability to convince lots of sellers that you’re the best choice, and list lots of properties. In a survey of 491 Australian agents, 44.2% said they spent less than five hours per week working on an individual listing. And unsurprisingly, agents who carried the most listings usually dedicated less time to each.
Often once the listing paperwork is completed the hard part for the agent is done, and provided the agent carries enough realistically priced listings, they will achieve a lot of sales. It may mean they’re working more on getting new listings, than working hard to get you the best price.
Of course, it’s important that your agent is experienced and has a track record of selling properties. But here are three other important questions you should be asking:
The last thing you want is an agent who’ll initially tell you what you want to hear and once they sign you up, be forever trying to convince you to reduce the price. The best agent is one who will work hard to maximise your results, not necessarily an agent who’s leading the sales stats.
Depending on variables such as the current market conditions, your unique property, the location and more, certain strategies are going to work better than others. Going to auction can increase competition and drive up your price, or in some cases have the opposite effect. Your agent should have a clear strategy and be able to provide evidence of their reasons for their recommendations. Don’t be afraid to question agents about their strategy.
Online advertising is the most effective medium for promoting properties for sale. Checking out current listings that the agent is promoting will give you a very good idea of how they will promote your property. Is the property staged beautifully for sale? Are the photos professionally taken and showcasing the property in its best light? Are the advertisements well written in a manner that would motivate a buyer to want to view the property?
It’s reasonably common for agents at the top of sales rankings to assign appointments to a supporting agent. In other words, they spend their time convincing sellers to list with them, then have a team that does much of the work selling the property. In this case the initial agent may be involved in writing any offer and presenting it to you. Or they might list the property and leave the rest of the process up to another agent. A lot of agents operate this way and still achieve good results. In fact, the agent showing buyers your property may even be more skilled at this part of the process. But if you’re sold on an agent because of the way they present, you may want to make sure they’ll be the one doing the job for you.
Different agents have different niches. Negotiagent will only ever provide you with specialists in your local area, but it’s still important to make sure they have a successful track record of selling properties like yours. Do they specialise in median or high-end properties? Do they sell a lot of apartments rather than green title homes? Do they understand the unique features of your property and your area? Can they point out the benefits of the nearby schools, parks and restaurants?
Your initial asking price is the single most important factor that will determine the best possible outcome. It needs to be not too high, and not too low. This is where doing your own research is invaluable. You should avoid agents who give unrealistic expectations to sign you up, with the intention on working your price down over time. Buyers are most interested in properties that are fresh on the market. Once it’s been on the market for a few months, even if the price is reduced, the urgency from potential buyers reduces. This may result in you achieving less than you could have if you priced the property realistically from the outset.
Also remember the biggest part of an agent’s job is signing up new sellers. Our research shows that on average, Australian real estate agents spend 52% of their time trying to get new listings. There’s nothing wrong with that, but it’s worth bearing in mind.
What will the agent charge when they successfully sell your property? When will you be liable to pay? What are the up-front costs? What extent of services will be provided? How do the costs compare to others providing similar services? Ensuring these points are considered and discussed will help you make the best choice and achieve the best outcome. Your objective is to achieve the highest price possible and keep as much of the proceeds as possible. Paying the cheapest fees doesn’t necessarily mean more money in your pocket. Clearly selling for $800,000 and paying a $12,000 commission is an inferior result to achieving $820,000 and paying $20,000 commission. Consider the value, not just the price.
If you want to know how your experience with an agent is likely to pan out, the best place to check is with their previous clients. There are some great real estate rating services available online. Most people won’t book a hotel or even go to a restaurant without checking the consumer ratings and choosing an agent has much bigger consequences. Most agents will even be happy to provide you with previous client details if you want to ask questions for yourself. After all they’re trying to win your job, so it’s fair for you to ask for references.
For all the market research, agent experience and knowledge, no one has a crystal ball. It is very important that your agent provides you with honest buyer feedback and doesn’t pull any punches. If the initial plan is falling short you don’t want an agent who’ll bury their head in the sand. Look for an agent who’s committed to maintaining honest and open communication.
Selling a property can be stressful. Using an agent who makes you feel comfortable will help ensure that the lines of communication are open and minimise any difficulties. GET STARTED
Although the commission on selling your home is likely to cost as much as a pretty decent car, knowing how much an agent will charge isn’t anywhere near as transparent. Traditionally an agent will spend time touring your house, complimenting your taste, patting your dog and trying to quickly build rapport. They’ll fill you in on their full strategy and only after all this, will they tell you how much they charge. They’ve made the presentation many times and if they know you’re ready to sell, they’ll probably do a pretty good job steering you to signing on the dotted line. If you expect them to be good at negotiating for your money, you can be pretty sure they’ll be good at negotiating theirs. To make sure you’re happy with agent fees you should test the market with Negotiagent, so you can see what agents will charge you up-front and negotiate the best possible deal.
When you call an agent directly, they know they’re likely to be only competing with one or two other agents. Agents say they compete with a maximum of two other agents 59.8% of the time, and sometimes they have no competitors at all. But when you contact them via Negotiagent, they know your job is on the open market, so they’re likely to offer you better value. For agents, winning your job with less commission is still better than not winning it at all.
Also remember that paying commissions isn’t like buying a product, with production costs and overheads directly related to that product. The only real costs other than agent time are advertising (which you’ll likely contribute to up-front) and maybe some minor agency administrative costs. You’re usually paying for a result and the cost of that result is whatever an agent will agree to represent you for. Of course, as the saying goes: if you pay peanuts, you get monkeys. Choosing the cheapest agent probably isn’t a smart idea. But you owe it to yourself to do your research and use competition to get the best agent, for the best price.
Real estate commissions are not regulated and as such will vary from state to state, suburb to suburb and between metro and regional areas. Commissions will usually vary from between 1.5% for a very basic non-personal service, up to 4%. Generally, agents will charge a higher percentage of commission for lower priced properties and the percentage will reduce as the price increases. Below we have provided some averages across the states of Australia.
It is important to remember that the amount or structure of the commission is always up for negotiation. Agents may propose the commission be a percentage of the sale price, a fixed fee or a sliding scale of fees which is likely to decrease as the price increases. It’s also important to remember that while a 2.4% commission might not feel like much, it’s $24,000 on a million dollar sale. So, put it in real terms when considering value for money. What could you get for $24,000 and are you confident that it’s going to be $24,000 well spent? Is it twice as difficult to sell a property for one million as another for $500,000? Or four times as difficult if it’s 2 million? Sure, the pool of potential buyers may be reduced, and the agent is likely to propose a lesser percentage on a higher price, but provided the property is realistically priced is the difference in the agent’s job worth the difference in commission?
It is important to know what the agent commissions include and exclude. Is the agent purely charging a commission upon successful settlement of the property or are their up-front costs? Some agents will include marketing and advertising in their final commission, but most agents will require payment for these costs up front. Agents who include the price of marketing in the commission may not necessarily end up providing you with the best value, as often this will be built into the fee at more than it’s worth. Finding out about agent’s marketing strategy, expected costs, who pays what and when; and then weighing up the pros and cons of agent pitches will ensure you get the best deal.
Even if your home is beautifully presented and realistically priced, it won’t sell if no one knows about it. The most important place to market your property is on the biggest real estate listings websites, realestate.com.au and Domain. You should ensure at a minimum that your property features on these websites.
Traditional print media is also still used in some areas and your agent will be able to advise where your property should be promoted.
Most agents will charge up-front advertising costs and it is important to be fully aware of what you are getting for your money. While professional photography is important to present well online, should you be footing the cost of a huge sign mostly covered with the agent’s face? Sure, this may be good for the agent’s profile but is it really worth it for you?
Upfront advertising costs may be up to $5,000 and could be even more if you want additional exposure for your unique property. To make sure you get the best return for your marketing investment, know what’s involved and seek multiple opinions.
Along with ensuring your home is presented to sell and has a strong marketing campaign, correctly pricing your property is the most important factor in achieving top dollar. Pricing the property too low is obviously disastrous, but the more common problem of pricing too high is also very dangerous. An initial unrealistic list price will lead to a lack of interest, inevitable price decreases over time and a lack of urgency on buyers’ behalf. If buyers know a property has been on the market for a long time, even if the price is reduced, expect lowball offers.
The most common mistake is sellers overestimating the value of their home due to personal attachment. Good agents will show market evidence and recommend a maximum realistic asking price. But some agents will tell the seller what they want to hear, with the intention of working the price down once the listing is signed. The key is to do your research!
The best way to find out what your home is worth, is by researching the competition through the eyes of a buyer. Potential buyers will be comparing your home with others they could buy in the same price range, and all buyers want the best property they can get within their budget. With the amount of property photos and videos available on real estate listing websites, a lot of research can be easily done online. Visiting open homes like yours will also help you get a good understanding.
Real estate agents will have a very good idea of the value of your home because they’re constantly in touch with the market and know about similar properties that are available. But most of those similar homes, they will never have seen in person, which means you can arm yourself with the same information.
On average, most agents sell homes in 6 suburbs and need to spend a lot of time keeping up to date with the market. All you need to do is know your suburb, especially your particular location within your suburb.
There are also tools available such as Domain’s House Price Guide where you can enter your address and are provided with a price guide. We recommend these sorts price guide tools are used in conjunction with, not as a substitution to, your own market research.
Some common strategies are auction, fixed price, ‘offers above’ a certain amount, price on application or a price range. The right price strategy will ensure you maximise your sale price. The right strategy will depend on market conditions, your type of property and potential buyer type, the value of your property and its location. A good agent will be able to recommend the best pricing strategy based on these factors and it’s a good idea to take their advice on which strategy to follow.
Ensuring that your property is beautifully presented is of paramount importance to achieving a great price, or even getting it sold at all. If you were buying fruit at the supermarket, you would inspect and buy the fruit without blemishes, and buyers behave the same way when purchasing a property.
A good agent will be able to discuss how to best prepare your property for sale, what work could be undertaken and what results you could expect.