Choosing a Real Estate Agent in a Down Market
Given that the real estate market remains quite depressed by most measures, choosing the right agent is more important than ever. This is true both for sellers – who want to extract the highest prices for their home – as well as for buyers, which want to find a suitable home for a low price. According to one source, the most important factor is the potential real estate agent’s diet. [No kidding, this is real.]
But seriously, what special considerations should you take into account when hiring an agent, in light of the housing crisis? You should begin by scrutinizing your agent’s level of experience. During the bubble years, this was often a non-issue. Now, however, it’s vitally important that you make sure your agent is experienced in selling homes that are similar to yours. For example, has he/she sold properties in the same zip code and the same price bracket? If so, she should understand how and to whom to market your home.
One expert writes that quality homes aren’t being sold because, “Your agent isn’t getting the word out, either because the property isn’t listed properly on the multiple listing service or because he or she hasn’t posted it on Craigslist, Zillow or other online search engines that don’t feed directly from her MLS posting.” This also extends to understanding how best to present a home. “Having your home look picture-perfect online makes home buyers want to see how good it looks in person.” In terms of pricing, many sellers mistakenly assume that it’s better to price a home too high, but this could deter potential buyers. Your agent should be knowledgeable about prices for comparable homes, so that the price for your home can be set accordingly: “If your home looks great and is priced right, you’ll get traffic through the front door.”
Your agent should also understand the various financing strategies available to you. This applies especially to short-sales, lease purchase options, and wraparound mortgages. It may not be your agent that is ultimately responsible for structuring such a contract, but you should still prefer one who understands fluently how they work. From the buyer’s standpoint, you want an agent that can tell you what financing options are available to you, and if certain properties are excluded. For example, you may need to be reminded that if a property is too expensive, it won’t qualify for a conventional mortgage. Adds another expert, “If you are interviewing a real estate agent and he or she isn’t familiar with down payment assistance programs, you shouldn’t hire their services.”
Last but not least, you need to carefully negotiate the fees with your agent. An agent that charges too little may not be qualified, but then again the same could be said for an agent that charges too much. In order to attract the most buyers, “You need to make sure your agent is splitting the commission equally with whoever brings the buyer. Some listing agents will take 60 percent of the commission instead of sharing it 50-50, which won’t help you.”