The Selling Process
Most people only sell a home a few times in their life time.
This makes them vulnerable.
Most real estate sales people on the other hand sell a house most weeks.
This means that they are very experienced.
That is what you want isn't it? An agent who knows what they are doing?
By definition, an agent acts for a Principal (usually the home seller). By law, an agent must put his or her clients interests ahead of their own in order to help the Principal achieve their objective or goal.
So are agents successful in that role?
Well we all know that in most cases the agent is more successful in achieving their own goal than the goal of the seller who is too often left unhappy.
With the high percentage of unhappy sellers out there, there must be some agents that are better than others. The trouble is, you can't tell by looking at them or by listening to them.
When selecting an agent try these few simple steps.
- Do they have plenty of SOLD signs in your area? After all this is the real test isn't it?
- Are the home owners of those sold properties happy? That is, would they use them again and would they recommend them to friends and family. The ONLY way to know is to go and knock of the door of a property sold by your preferred agent and ask them: "I'm about to sell my home down the street, would you recommend the agent with the sold sign nailed up out the front or not?" This is an essential step. You are going to be signing a contract with this agent that gives them a financial interest in YOUR HOME.
- Read the agency agreement carefully. Many agents will charge you thousands of dollars in marketing costs. The trouble with this is, you won't see any reference to that in the agency agreement. That comes after you sign the agency agreement and are locked in. PLEASE write these words onto the agency agreement, " the vendor reserves the right to cancel this agreement without notice, in the event that the agent requests that the seller pay for advertising and is absolved of all costs to the agent." Most sellers won't take this precaution which is why hundreds of home sellers get stuck with huge advertising bills. Remember, you own the house. This agency agreement will transfer an interest in your home to the agent equal to about 3%-5% of its value.
- Setting the first asking price is one of the most important steps in the selling process. It's best to do this by comparing (objectively) your property with houses that will appeal to the same type of buyer that you are looking for (called competing properties) and more particularly, recent sales of similar properties. Agents have free access to these from government records and various websites. When an agent recommends a starting price ALWAYS ask for a written copy of both. These documents are often referred to as a CMA (Comparative Market Analysis).
- Many sellers waste thousands of dollars 'doing up' a property prior to selling. Research shows that most of this works returns only fifty cents in the dollar.
- Property inspections - whilst you may feel uncomfortable, you really are better to leave whilst the agent shows the buyer through your home. A buyer needs the freedom to 'feel' the property rather than just see it.
- Most sellers fall into two categories: Those that will sell for the best price that the market will pay; and those that will sell IF they get their price. The latter group often face the inconvenience of being on the market for years. Take the time to decide which group you are in. This is a very important step. Understand that no seller can be truly objective when it comes to the value of their home.
- Selecting a solicitor or conveyancer. Most settlements go without a hitch, in which case a selection based on price is justifiable. However, there are many things that can go wrong. Problems of improvements without council approval, encroachment (fences or buildings outside the boundary) delayed settlements etc. In this case the benefits of a low price are quickly eroded as you see your own interests impacted negatively by a more savvy buyers' conveyancer or solicitor.
- An agent who truly understands the rules of negotiation will protect your price by ensuring that there are many things to negotiate other than price. Things like, what will stay with the property (chattels), settlement date, size of deposit, etc.
- Insurance. Remember that once a contract is signed, the property should be co-insured. That is, keep your insurance current and the purchaser should also take out insurance. If the property is going to be vacant for an extended period you MUST advise your insurance company to risk voiding your cover.