If there is one piece of advice that I could give to anyone looking to hire a real estate agent to list their home, it would be to NEVER choose the agent based on the price they give you, NEVER. I realize you need to get an opinion on price in order to make decisions so do your homework and interview 3 agents and see what they give you for numbers but don't choose the agent you are going to hire to sell your home based on the price they give you. In my opinion, this strategy is a naïve approach and could leave you more frustrated down the road because you hired based on price rather than expertise. In my opinion, there are three key factors you should make your decision on when hiring an agent, price is not one of them.
- Hire an agent based on their "track record" which is determined by the number of sold signs they put up in one year. The more listing sales an agent has, the more familiar they will be with the market. Just to give you some perspective, in 2011, there were just two of us primary real estate agents (out of 247 agents in Red Deer) that sold over 85 listings in 2011 in Red Deer. 68 of the 247 agents sold just one listing sale in 2011. And only 43 of the 247 agents sold more than 10 listings in the year*. So do your homework carefully, ask the right question "how many listing sales have you completed in 2011?" In my opinion, it is irrelevant how many years an agent has been in business if they don't' have a solid track record year over year. The more current an agent stays in the business and the more volume they complete in a year, the more benefits you as a seller will gain in hiring them.
- Hire an agent based on their ability to market your home, "properly" is the key word. Don't let the idea of an agent spending thousands of dollars on print advertising convince you that this is going to help you sell your home. Print advertising has lost its impact now that the majority of people are on the internet. There is advertising that is ineffective and an agent you hire should be able to articulate what works and what is in effective in the market you are selling in. If you ask any marketing expert, they will tell you that not all advertising is effective. Real estate is no exception to this marketing principle. And don't think that 21 pictures posted on line is a great marketing strategy. There are many houses I have listed that had I put 21 photos on line, we would probably still be for sale. On line marketing to qualified buyers requires you to be selective in your choices of photos. You have one opportunity to make a good first impression and buyers will judge quickly by the photos they see. So the agent you hire should be an expert in marketing and a good gauge on a agents expertise is their own personal website so go and check it out!
- Hire an agent based on the best value you will get for services. I am going to be very biased with this one because of course I believe our programs are the best choice for consumers in Central Alberta. The cost to list with us is minimal but the service we provide is exceptional. My competition likes to use the "you get what you pay for" line but this philosophy only counts if the cost of the service is priced reasonably to begin with. In our opinion, traditional real estate commissions are too high because of the amount of overhead costs in the traditional franchise models and the ineffective money that an agent spends in lead generation which has no direct impact on the sale of your home. When we decided to launch Lime Green Realty Inc. we just re-adjusted the income statement by removing expenses that were ineffective in assisting you in getting your house sold and coincided that with a reduction in the commission we charge. This is why there is no reduction in the services that you will receive from our company.
Along with these 3 key factors, if I was to leave the business, the way I would find an agent would be to choose the agent that was most honest with me even if it's not what I wanted to hear and here's why. In 2007 I took a real estate training course in Edmonton, AB that was endorsed by the franchise brokerage I was working at. It was not cheap I think I spent almost $2,000 to attend this course, not to mention the travel costs twice a week from Red Deer to Edmonton and back. The guy doing the course was well known in the real estate industry and was considered an expert at making agents successful. Frankly, I found the entire course too "sales pitchy" for my liking and decided that I would do everything opposite to what I was told in the course. I never did complete the course because my business took off and I felt selling houses was more of a priority than learning sales techniques I didn't believe in. But for the time I did attend, one of the topics of discussion was market assessments. A market assessment is the real estate terminology for suggesting prices for your home. The message that I took from these sessions on market assessments was that I should never say anything negative to a seller about their home in the listing presentation because I was there to win the listing. The idea was that you don't win if you are negative and you don't want to say anything negative that may stop the seller from listing because your goal as a salesperson was to get them to list their home. The training actually taught us not to leave the home until we had the listing paperwork signed which in my opinion was too much of a high pressured sales technique. If these techniques are actually used by real estate agents, then as a seller you have to take the information that is provided to you in these market assessment appointments with a grain a salt. An agent has an agenda when you invite them into your home for a "free market assessment". Their agenda is to convince you to list with them. We all know nothing in life is really "free" so why do you think real estate agents advertise "free market assessments"? Because our best chance of getting you to list your home with us is to provide a "free market assessment" so we can schmooze you with our charm and you win you over to get your listing. This is the typical "stroke your ego" approach which may not serve you well if you are stuck trying to make informed decisions with biased information from a schmoozer.
Let's talk pricing. I understand that you need pricing information as a seller to make decisions but you should ask yourself how biased the information you obtain may be. I take a different approach to the market assessments that I provide as I like to use these opportunities to educate the seller and provide information rather than give the consumer a sales pitch. Of course I am going to use this as an opportunity to tell you about my company and why I believe I am the best choice for you to list with but I take more personal pride in being able to impart all of the information and experience that I have, good or bad, to assist you in making the best decision for you and your family. Because as one kind human being to another, I really do care that you get as much information as possible to make a good decision. I would like the consumer to see this approach as an act of true genuineness in my business; if I am willing to be honest and open with you even before you hire me does that not set the precedent for the type of representation I will give you actually do hire me? This is precisely why you should not hire me based on my interpretation of pricing. You should not think of the pricing data I give you as a reflection my OPINION of price rather you should see this as my INTERPRETATION of price. This industry is an odds based game. So when I give you my interpretation of sales data, I am making an educated guess which involves "odds". What are the odds that your house will sell at this price in this number of days? Of course the more comparable sales data that an agent has, the easier it is to determine an estimated price. An agent's ability to interpret data is based on their experience so the more sales an agent does, the better they should become at interpreting the data which is why hiring an agent that does a lot of volume is much better than hiring an agent with less volume.
I often have sellers tell me that "they cannot sell for anything less than $x". But rather than tell me what price you need, you should ask me what the "odds" are that you will get the price you want. Understanding your odds can really help you with the decisions that you need to make regarding your sale.
There have been a few times that I have heard sellers say that they did not hire an agent because the agent didn't believe in the price the sellers wanted to list at. In my opinion, this is a wrong perspective. The agent you choose to list your home does not need to "believe" in your initial list price. The fact of the matter is that the agent you hire is not likely going to be the agent that actually brings the buyer to your home. In Red Deer in 2011, just 12% to 13% of the properties that were sold, were sold by the primary agent whose name was on the sign*. So odds are that another agent will actually find the buyer for your home.
Pricing a home in real estate is not an exact science which is why Lime Green Realty has designed commission programs that allow you to be in control of your pricing so even if you do not like my interpretation of a suggested initial list price, you can still have the final decision on what your initial price will be. We see it as a win-win situation for a seller because not only do you get honest information from an expert in the industry, you have the freedom to make your own decision as to how you use that information to price your home.
* Based in whole or in part from information obtained by the Central Alberta REALTORS® Association for the period January 1, 2011 to December 31, 2011 for Red Deer, Alberta. Sales data includes single family, half duplex, townhouse & condo sales only.