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With mortgage rates near record lows, buyers want to take advantage of affordable home loans, and demand for houses is high. And with many sellers wary of putting their homes on the market in the middle of a global pandemic, supply is low. These two factors have combined to create a seller’s market.
If you’re selling, you may be able to find a buyer for your property more easily than in the past, but that doesn’t mean you can just hire just any real estate professional to sell your house.
Unless you’re selling your property yourself, you want the right agent to help you through the process. Be sure you ask these five questions of anyone you’re considering.
1. What’s your commission?
Under the traditional real estate model, home sellers pay a 6% commission. This is typically split between the listing agent (the agent you choose when you sell) and the buyer’s agent (the person who brings potential buyers to your home).
Thanks to the internet and a plethora of companies offering discounted commission, however, it’s now possible to pay well below 6% when selling your property. In fact, sometimes sellers’ agents accept as little as 1% of the sale price of your home in commission (in addition to the 3% you pay the buyer’s agent).
Be wary of seller’s agents who promise you’ll pay less than the standard 6%, but who achieve this by reducing the commission a buyer’s agent receives. While you can offer lower than 3% to a buyer’s agent when you list your home, you are required to offer at least some commission in order to put your home on the MLS (Multiple Listing Service, the agents- and brokers-only database of homes for sale in your area). And If you offer less than the standard 3% to agents who bring clients to your home, this may affect the price you ultimately get for your property — some agents may steer their clients to other homes that would provide them a bigger payday.
There’s a good argument that in any discounted commission model, an agent won’t be as invested in getting top dollar for your home — they’ll make more money by keeping up a fast pace of sales rather than maximizing the value of each property. But you can also save a lot by paying a reduced commission, so weigh these factors if you’re thinking of working with a discount broker. The bottom line is that you want to know upfront how the pay structure works, so you can decide if it’s right for you.
2. How will you market my home?
Selling your home is a numbers game, like anything else. The more people who see your listing and come to your house, the greater the chances you’ll sell quickly for top dollar.
Ask what your real estate agent will do to market your home to potential buyers. At minimum, this should include arranging for professional quality pictures and listing your property on the MLS. But you may also want an agent who goes the extra mile with drone footage, video tours, or social media marketing.
3. How long do homes you sell typically stay on the market?
Some sellers’ agents are good at moving properties quickly because they know how to price them right, market them effectively, and negotiate a good price from potential buyers. You’ll ideally want to find one of these agents. You can get a good idea of whether the agent you’re talking to can move your home fast by asking about their past track record.
You can compare their sales history with the average days a property stays on the market in your area. If their properties take longer to sell and they don’t have a good reason why, you may want a different agent.
4. How many homes have you sold in my price range?
Finally, it’s important to make sure the agent you hire has experience selling properties in a similar price range to yours. There’s a big difference between selling a starter home and selling a million-dollar luxury abode, and you need an agent who knows your specific market well.
5. How many houses do you sell overall?
It’s also important to get a good idea of how many homes your agent has sold overall. Obviously, you want an experienced real estate professional who handles a lot of transactions — but you also don’t want an agent who is so busy that your home is likely to get lost in the shuffle.
An agent who sells hundreds of homes a year, for example, may not give your property the time and attention it deserves. But someone who sells one per year probably isn’t very good at his or her job. It’s helpful to find a balance, so consider what you think is reasonable and what other agents are doing to compare.
By asking these five questions, you should be able to find a real estate professional you can count on to get your property sold. Since it’s a seller’s market right now, you should be able to get top dollar for your property with the right real estate agent in your corner.