9 Costly Mistakes to Avoid When Placing Your Home for Sale - Part Eight
Choosing an Agent on Price Alone
It is reasonable to assume that nearly all real estate agents are the same, or offer the same services, so it might also seem logical to engage the one who will do the job for the least amount of money.
This alone could be the most expensive mistake you ever make!
Here is an example from a couple who purchased a house through another agency;
After looking in the specific area that they wanted to buy in, doing some research on what had sold recently, this couple found a house that met their requirements, and based on comparisons that they had found, determined the price they were prepared to pay for it, then put in an offer with the agent for $10,000 less than the asking price.
The agent conveyed their offer to the sellers and obtained acceptance of their offer, both parties were happy and the sale proceeded without issue.
A good job as everyone was happy? That would seem to be an obvious answer.
But would the seller (who pays the agent) have still been happy if they had found out that the buyers would have been happy to pay at least another $10,000? And the only reason they didn’t was because the agent DIDN’T ASK THEM TO!
Don’t Hire a Messenger.
The above is a classic example of an agent, being capable of getting a sale together, but without either the skill or the desire to work as hard for their client as they do for their commission.
That’s not negotiating, that’s just being a messenger, which doesn’t require much training or skill at all.
Whether that agent was chosen just on price, I don’t know, but it certainly shows that it is easy for a seller to lose $10,000 just by have the wrong agent.
Never underestimate the value of a skilled negotiator working on your behalf to achieve the highest possible price for you, not just to get everyone to ‘meet in the middle’.
Value For Money
I’m not saying that all agents are not skilled negotiators, a few are and deserve every dollar of commission they get, if as in the above example, the agent had got the extra $10,000, I am sure you would agree that they deserved their commission.
So how do you make sure that you get an agent who really does work for you to get you the highest price possible, not just the best price they can get for themselves?
When you are interviewing agents who want to sell your home for you, and you should always interview them, not the other way round, ask what study they have done on the skill of negotiation, what books have they read on the subject and can they prove their ability to negotiate the highest price to you?
Depending on how well they answer those questions, you can decide which agent is going to give you the best value for your money, which means more money in your pocket after all.
Negotiate The Commission
Here’s a very simple ‘practical exam’ to see just how good a negotiator your potential agent is.
Don’t just ask for a reduction on the commission fee, negotiate with them to see just how much they will actually give you off, work hard on them, be tough but not mean.
Afterwards ask yourself, how hard did I have to work to get a discount off their fee?
If you succeeded in getting a small discount, I would be wondering how good their skills are compared to yours and how hard they will work with a buyer to make sure that are getting the highest price for you? Could you find someone who can do better?
If you managed to get a good discount, don’t engage them.
They aren’t interested in helping you at all. If they are happy to give away their money, just think how easily they will give yours away.
If you want an agent to get the highest price for you, check their skills, ask what books they are currently reading on how to be better in sales and what have they learned or studied recently. The answer to these questions alone can save you thousands.
This is part eight of a nine part series for home sellers.
Author, Graham Lester
Maggie Dixon Real Estate