As a wannabe home seller in the still-hot housing market, perhaps you imagine that many listing agents are earning huge windfalls. After all, commissions are ascending along with housing values. And in popular neighborhoods, homes are selling at lightning speed.
But many agents are less than euphoric about current market conditions. That’s because there’s a severe shortage of inventory available to list. Meanwhile, more people have entered the real estate field -- including those who lost jobs in the retail, restaurant and hospitality sectors. This has also intensified competition among agents.
Since the pandemic started, membership in the National Association of Realtors (nar.realtor) has increased substantially. It’s now the largest trade association in the nation, with more than 1.4 million members.
“(A)gents are presently facing a tremendous battle to obtain listings -- especially for newcomers to the field who receive fewer word-of-mouth referrals,” says Sid Davis, a veteran real estate broker and author of “A Survival Guide to Selling a Home.”
No matter the number of available agents, homeowners intent on selling should exercise great care in selecting a listing agent, says Eric Tyson, a personal finance expert.
“It’s all too common for sellers to take a trivial approach to hiring a listing agent. ... But selling success depends on due diligence,” says Tyson, the co-author of “Selling Your House for Dummies.”
Granted, some owners do well on their sale without a highly qualified agent -- particularly if they’re lucky enough to live in an area where the market remains robust. But real estate specialists caution against overconfidence, especially at a time when there are crosscurrents in the economy, as there are now.
Whether your home sale is voluntary or involuntary, Tyson says it’s critical you make agent selection a priority.
“Treat hiring an agent as seriously as you would any professional,” Tyson says.
Ron Phipps, a real estate broker and past president of the National Association of Realtors, says more sellers are gradually getting the message about the importance of careful agent selection.
“It used to be that a lot of people would just call in a family member or friend who happened to have a real estate license. The good news is that sellers are now searching more widely,” he says.
Here are a few pointers for sellers:
-- Interview at least two to four candidates.
Without interviewing other contenders, you may be tempted to hire the first agent who comes recommended. But Phipps says it’s still wise to also interview other candidates.
“When you talk to several people, you’ll get different perspectives on your sale,” Phipps says. “Several opinions on pricing can be especially helpful.”
Even now, he says you should be wary of any agent who suggests you list your place for more than 10% above what others say is its fair market value.
“Find out how they arrived at that higher price,” says Phipps, noting that occasionally some agents may suggest an above-market list price as a way to flatter you into hiring them. This practice is known as “buying the listing.”
“It’s a shortsighted listing strategy,” says Phipps, who’s worked for his family-owned real estate firm for more than four decades.
-- Screen for local knowledge of your market.
Your uncle or that highly recommended friend-of-a-friend might be an excellent real estate agent. But should you consider hiring this person if their office is located a significant distance away from your place?
Absolutely not, says Tyson, who contends that a faraway agent is likely to be much less effective in marketing your property than one who knows your local turf well.
“Anyone who works more than a 15-minute drive from your place is probably a very poor bet. Geography matters a lot,” he says.
It’s especially wise to have an agent close by if you’re trying to sell a property in a city setting -- such as a condo in a high-rise building. In such a case, the ideal agent is typically someone with proven experience selling units in your same building.
“Agents with an intimate knowledge of the floor plans and sales history of your complex can hit the pricing target right the first time. That spares you the agony of multiple pricing adjustments later,” Tyson says.
Realtors call the area where they most often sell homes their “farm.” As Tyson says, agents who say they farm your area should be able to demonstrate this with a list of transactions they’ve done there recently.
-- Ask about a candidate’s awards and honors.
How can you identify agents who have achieved an unusual level of expertise? Phipps says one way to distinguish among agents is to ask if they’ve been elected to positions of leadership within their professional groups.
“This shows they have a reputation for collaborating with other real estate people,” Phipps says. That’s important, he says, because real estate is a cooperative profession, and a successful sale typically involves more than one agent.
-- Choose an agent with a proven deal-closing record.
In a transitional period like the current one, many sellers are understandably nervous that complications along the way to closing might jettison their deal. That’s because qualifying for a mortgage is trickier than it was prior to the last real estate downturn of 2008.
(To contact Ellen James Martin, email her at firstname.lastname@example.org.)
“Selling has become much more complicated. So it’s smart to find an agent with experience handling many different kinds of transactions. Look for their record of closing deals, not just taking listings,” Phipps says.