Is your house on the market? Are you getting offers? Is your agent working hard to sell your home? Did you select the right agent?
In this market, these questions are being asked more frequently because there is rather strong evidence that the recent period of rapidly rising home prices may have ended.
The result is that houses in some areas are staying on the market longer, and — shudder — prices may even be going down. All real estate is local, and what is happening in your neighborhood might not be the same as the national averages.
Nevertheless, the news could be important to you if you are about to place your home on the market. This column is about how to select a listing agent, but first let us look at the current national housing situation.
In August, housing starts in the U.S. were down 1.98% when compared to the previous month, according to the Commerce Department. That might not sound like really bad news until we compare those numbers to a year earlier. Compared to August, 2005, housing starts dropped 19.8%. What about prices? Even the chief economist of the National Association of Realtors now predicts a drop in median prices for the nation as a whole. He says that prices are likely to resume rising next year, but at a slower-than-normal rate.
Thus, if you are about to list your home, selecting the right agent is critical. Let us look at two cases of how not to select an agent.
Not so good
Tom is active in his church and believes that doing business with fellow church members is a good thing. Before having his car repaired, buying insurance or making an investment, he always checks to see if anybody in his church is in that particular business or would recommend someone. Not long ago, Tom and his wife decided to sell their house for a smaller one because they were now empty-nesters.
One Sunday, Tom put out the word about what he was going to do. A fellow Sunday school member recommended a friend. Tom listed with the friend only to find out later that she had a pending complaint with the state licensing agency, operated primarily in another part of town and was a part-time agent.
The house stayed on the market a few months, and Tom listed with someone else when his listing expired.
Judy listed her house with her next door neighbor who has just received her real estate salesperson’s license. Her new agent worked extremely hard to sell the home, but in the end lost the most promising sale because follow-up details were not done with the mortgage company to get someone qualified who had made an offer.
A few simple steps
The two cases could have been avoided if the owners had followed these steps in listing their homes:
• Identify agents who are familiar with your neighborhood.
• Invite three of those agents to make a listing presentation.
• Select the agent who had the best record of sales.
In step number one, take the opportunity to drive around your neighborhood and determine which agents have the most listings. Look at the yard signs and identify not only the company, but the sales agent whose name you see most often.
Next, take a look at advertisements in local newspapers, real estate publications and other marketing, such as billboards. It won’t take long for you to see who is doing business in your part of town.
Next, invite at least three of those agents to your home to make separate listing presentations. Each will make a preliminary visit to your home and then return with recent sales in the neighborhood, commentary on the features of your home, a recommended listing price and a marketing strategy.
Finally, select an agent. Generally, you will want to select the one who has sold several homes in the area and who has the best sales to listing price ratio. Some homeowners go through the above process and select the agent who recommends the highest listing price thinking that they will get more money. That can be a big mistake. It does you little good to have your property overpriced because it will just sit on the market without any prospective buyers. A property that sells for a high percent of its listing price is an indicator that the agent has priced it properly to begin with.
If you have done these things, and each agent seems well-qualified and knowledgeable about the market, your decision will be based on which agent has the best chemistry with you. Note that this is the last factor in your decision, not the first.
Your home has sentimental value to you and that counts for a lot, but in the final analysis this is a business decision and should be approached in that fashion.