In my 38+ years of real estate practice, I’ve met and worked with many real estate agents. Below is a list of issues and questions I believe home sellers may wish to consider when interviewing for an agent to list their home.
Experience. Years of experience is important, but it should not be confused with energy. You want an energetic and motivated agent first and foremost. You will find that there are many agents with less than five years’ experience. Many got into the profession during the housing boom. On the other hand, there are many agents who have 20+ year careers in the business. There is not one size that fits all.
Neighborhood Presence. Some agents “farm” a neighborhood – that is, they focus a large part of their time and effort listing homes in a particular neighborhood. Sometimes they live there themselves. If your neighborhood has one or more such agents with a proven track record, you should consider talking to them. But regardless of an agent’s neighborhood presence, their attitude, style, and personality must fit yours.
Minimum Service. Over the past few years, some brokerages have developed business models that include “minimum service.” This is perfectly fine, so long as you fully understand what services you will receive and which ones you must provide yourself.
Specialty or Expertise. Some agents focus their practice on specific types of properties (e.g. waterfront, etc.), price ranges, neighborhoods, products (e.g. condominiums, new construction, etc.). In Portland and Bend, for example, there are many distinct geographic areas that certain agents focus on. You should discuss with prospective agents where they do most of their work.
Credentials. Many agents hold certain designations, indicating additional training and expertise. One example is the “CRS” or “Certified Residential Specialist” designation issued by the National Association of REALTORS. No single credential should be the sole factor in selecting an agent. It’s just one of several to consider.
Price Range. Some agents focus on million dollar homes. Others focus on first-time buyers and entry-level homes. Make sure your agent has experience marketing the type of home you want to list.
Sellers, Buyers, or Both? Some agents are more comfortable just listing properties, rather than representing buyers. Some do both. Find out.
Marketing. Ask: “If you list my property, what type of advertising and promotional assistance will you provide?”
Information Loop. Here are some questions to ask: “How will you keep me informed about the activity on my home?” “Will you keep me informed about what other Realtors and visitors are saying about my home?” “Will you provide me with copies of the advertisements you run?” “Will we meet periodically to discuss marketing strategy?” “Do you have a “Plan B” if the home isn’t getting much activity?”
Forms. Most Realtors throughout Oregon use standard forms. These forms should either be those published by Oregon Real Estate Forms, LLC (“OREF”), or good company-produced forms. The OREF Sale Agreement form is the industry standard in Oregon. It’s always a good idea to look at a sample OREF Sale Agreement form early on – before an offer is presented. Review the Agreement with your agent ahead of time. Know what the provisions mean. Ask questions. Don’t wait until an offer is presented to learn what the provisions in the form mean.
Listing Price. Ask: “What price do you propose to list my home at?” “How reasonable is that figure in light of recent sales and existing trends?” “Is this price more than what homes comparable to mine are selling at?” “Can I expect offers to come in significantly lower than the listing price?” Most – but not all – areas of Oregon have a multiple listing service (“MLS”). The largest is the Regional Multiple Listing Service (“RMLS” ). MLSs keep monthly listing and sales statistics, broken down by region and area. Have your agent provide you with a copy to review. This information is accurate, current and informative.
Comparable Prices. Also called “comps.” Most Realtors will provide you with a “CMA,” or comparative market analysis (sometimes called a “competitive market analysis”). Ask questions. If you think your broker’s comps are unreasonable, too old, outside your neighborhood, or otherwise inapplicable, say so. If there are comparable homes in your neighborhood that recently sold, discuss them with your agent. How are they the same? How do they differ?
Offers. Where does the broker think offers will come in at? What if the offers are significantly lower than anticipated? What if they are higher? How would your agent handle a multiple offer situation? (See, Bidding Wars below.)
Bidding Wars. You’d be surprised. It’s still happening in certain price ranges and neighborhoods. Get informed by talking to neighbors and others to find out what’s going on. Handling competing offers can get complicated. Is that something that might happen here?
Time on the Market. Ask: “What is the normal time on the market for homes in my neighborhood?”
Time Frames. Do you want to sell quickly? (“Quickly” is a relative term these days – it used to be measured in days; now it can be months). To do so, you will have to price the home aggressively and market it aggressively. Pricing a home to “move” means that it should be in a range that compares favorably to what similar homes sold for in an equivalent amount of time. If you want a higher price, be prepared to wait longer.
Assistants. Some agents use licensed assistants. Oftentimes they are younger, less experienced agents who want more training or mentoring. If you will be communicating primarily with them, perhaps you should meet with them, as well. If they are unlicensed assistants, they will likely be handling more administrative tasks. There’s nothing wrong with a strong team approach, so long as your listing broker stays involved and accessible. They should strive for a 24-hour turn-around on phone calls and e-mail.
Insurance. Most brokerages today carry liability insurance (also known as “E & O” or “errors and omissions” insurance). But it never hurts to ask. You might also ask about the amount of coverage, although the brokerage companies, not their agents, are largely responsible for the amounts and terms of coverage.
Commissions. There is no such thing as a “standard” commission rate. Most agents have a certain amount of latitude in negotiating their own commission structure, depending upon company policy. But remember, normally an amount or percentage share of the entire listing commission is used to pay the buyer’s agent. So negotiating that commission down too low may affect the amount of buyer activity on your home. The goal is to sell the home for the highest and best price in the shortest amount of time with the fewest amount of problems. Good agents are worth paying for.
Contingent Offers. We are experiencing a buyers’ market today. In other words, the number of available homes far exceeds the number of available buyers. There are many people who are qualified buyers, but they must first sell their home. If they want to try to do both at the same time, buyers must make their offer of purchase contingent upon the sale of their own home. This contingency can be complicated, since it may prolong a closing and add an entirely new wrinkle in the transaction – now you have to consider how fast the buyer’s property will move. For that reason, you should evaluate ahead of time whether you want to even consider such contingent offers. Discuss it with your Realtor before listing the home.
Short Sales. These are sales in which a seller’s total encumbrances (property taxes, mortgages, judgments, liens, etc.) plus closing costs (commissions, escrow charges, recording fees, etc.) exceed the current market value of the home. A short sale transaction means that upon closing, your lender will be receiving payment that is less than the full amount due on the loan. This means that someone has to negotiate with the lender. That “someone” will either be you, your Realtor, or a third party provider. (Note: There are many companies offering these third party services. However, they must either (a) comply with Oregon’s foreclosure consulting and/or debt service laws or (b) be legally exempted from compliance. Some of these companies are located out of state. If you’re going to work with them, make sure they are properly registered to do business in Oregon. This is not an endorsement or criticism of the business model. – PCQ) Short sales can be slow, complicated and frustrating. If you are going to list your property as a short sale, you will want to use an experienced agent. If they have not listed or closed a short sale before, they should partner with someone who has. It is not for the faint of heart.