For a full decade, a California social worker in her 60s rented out a Spanish-style town house in Arizona she bought as an investment. Through the pandemic, the place had steadily risen in value. But, foreseeing the end of the frothy seller’s market, she sold the town house this past summer.
“I’m incredibly happy I sold when I did. My retirement is just around the corner, and I really need to prepare financially. If I’d waited until fall, the sale wouldn’t have yielded the same profit I got this summer,” the social worker says.
Not all homeowners have timed their selling plans so perfectly. This fall, the market has slowed substantially due to rising mortgage rates.
“Even buyers able to qualify for a loan at current rates could feel frozen, waiting for mortgage rates to fall dramatically again,” says Skylar Olsen, the chief economist at Zillow, the national real estate company.
At this point in the economic cycle, some would-be sellers are waiting it out. But like the social worker, others have a compelling reason to sell promptly.
Whether your home sale is voluntary or involuntary, real estate specialists say it’s critical that you make agent selection a priority.
“Treat hiring an agent as seriously as you would hiring any professional -- including an attorney, an accountant or a surgeon,” says Eric Tyson, a personal finance expert.
Tyson, the co-author of “House Selling for Dummies,” says it’s “all too common” for owners to take a casual approach to hiring a listing agent.
“In many cases, people just make a random selection --picking an agent whom a friend or co-worker knows. But selling success depends on due diligence,” Tyson says.
Ron Phipps, a real estate broker and former president of the National Association of Realtors (nar.realtor), says more owners are gradually getting the message about the importance of careful agent selection.
“It used to be that a lot of people would just call a family member who happened to have a real estate license. But now, many sellers search more widely,” he says.
Here are a few pointers for sellers:
-- Seek to 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 interview numerous 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.”
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 to flatter you into hiring them. This practice is known as “buying the listing.”
“It’s a shortsighted listing strategy,” Phipps says.
-- Zero in on local knowledge.
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 for data on a candidate’s awards and honors.
How can you identify agents who have achieved an unusual level of expertise? Phipps says one way to do so 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 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.
During boom times, most sellers feel comfortable once they’ve obtained a ratified contract -- meaning their deal has been agreed upon by both sides of the transaction.
But 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 recent increase in mortgage rates. Consequently, more home loan applications are declined than before.
“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.
(To contact Ellen James Martin, email her at firstname.lastname@example.org.)