Common Costly Mistakes Sellers Make

There are sales reps out there that will tell you what you want to hear. In the real estate profession, this is what we call “buying a listing” and it is employed by shortsighted sales people who are more interested in themselves than they are in you. However good it works as a short-term “sales tactic” in getting your listing, it is an extremely poor strategy in selling a home at the highest possible price.

Your house gets the greatest amount of interest from sales people and buyers when it is a “hot new” listing. If priced properly, lots of agents will show it to their buyers. If you price it too high, no one will show the house and it will sit on the market for some time. When you finally drop your price to reflect its real value, your house is “old news” and buyers may think you are growing desperate. Therefore, the prices you are offered will come in lower and lower – and you may find yourself accepting a price that is below what you could have obtained had the house been priced properly to begin with. Besides, pricing your home too high will only make similar houses for sale look that much better and help sell them first.

A first impression type of judgement isn’t good enough. You will also need to determine if the sales representative is competent and the best way to do that is to check up on references. Ask for references on recent sales — check up on references of recent customers. Find out how an agent’s customers feel about their selling experience. Also keep in mind that how long an individual has been in real estate isn’t necessarily all you should look for. Experienced sales people can grow jaded and not work as hard – newer agents sometimes make up with enthusiasm and effort what they lack in experience.

You will get what you pay for. Paying a cut-rate commission will often get you a sign in the front yard and placement in the Multiple Listing Service, but little additional effort from your sales representative.Realize that sales people and real estate companies put up their own funds to market and advertise your home. Marketing and advertising costs money — the lower the commission, the less incentive for an agent to put up his or her own money to market your home. Incentive plays a very important role in sales. A “full service” agent earning a full commission will often “drop everything” to handle any challenges that come along – an agent earning a small commission does not have that same incentive. Incentive is also important to the buyer’s agent. Since there are almost always two agents involved in every sale, they split the commission according to the listing agent’s instructions. One agent is your listing agent. The other agent is the buyer’s agent. When your listing agent dropped his commission, did he also reduce the commission that will be paid to the buyers’ agent? If so, you won’t find as many agents willing to show your house – they’ll be showing houses that offer a customary commission to the buyer’s agent. Finally, negotiating ability is an important skill in a listing agent. Are you willing to put your faith in an agent who can’t even negotiate his or her own commission?

Sales representatives who work for large well-established companies with lots of agents do have advantages. Large companies generally have longer office hours, so someone is always available to answer an ad call on your home. Large offices often have larger budgets and can spend more on advertising. The ad space for your particular home might not be huge, but because the total ad is so large it gets lots more attention. Large real estate companies often have a lot of sales people. This is important because when your house is newly on the market, the company may stage an “office preview” where every sales rep in the office comes through and tours your home. Every sales rep who views your home and is impressed is another representative on your sales team. Additionally, larger companies are often better at offering ongoing education to their sales people. As a result, your sales representative may be better qualified and prepared to offer a quality service. Although OREA and RECO require real estate agents to enroll in “ongoing education” to keep pace with changes in the real estate market, many sales people only take the “bare minimum” in ongoing education courses. Sometimes, large offices are better at convincing their sales people to go beyond the minimum.

The real estate profession is constantly changing and, as mentioned above, the best real estate professionals stay on top of those changes by continuing their education.

Open houses can and do sell homes, but usually not your home. Only a small fraction of the homes held open are sold as a direct result of the open house. More often, “open houses” are a way that real estate sales people to pick up potential clients. If they develop a rapport with those visitors to your open house, they can find out about their housing needs and sell them the home that most closely matches those needs. Meanwhile, the person who eventually buys your home may be visiting someone else’s open house. Good sales representatives know better than to pin all their selling efforts on an open house. They use their time in more effective marketing methods. The most effective marketing is not directly to the public, but to other sales people. By getting other sales people interested in your home, your listing sales person multiplies your sales force beyond just one individual.

Knowledge of the local market isn’t only acquired by living in the immediate neighbuorhood. Sure, your sales representative should have intimate knowledge of recent sales, schools, businesses, and so on, but that is easily achieved through simple research. It is important that your sales representative be a part of your local real estate board, giving them the resources to gain all knowledge needed to sell your home.

That should only be the beginning. What is more valuable — an agent who listed 32 homes and sold 25 – or an agent who listed twelve homes and sold all twelve? So you need to ask some questions. How many of their listings did not sell? How many were reduced over and over before they sold? How long were the houses on the market? How smoothly was the process handled? How accessible was the agent when there were questions or problems? Quantity is important, but only if all of the quality questions have been answered satisfactorily. The best agent is the one who will do the most effective job of marketing the property, negotiating the most favorable terms and conditions, and communicating with the seller to make the process as smooth as possible.

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