An agent’s main aim is to get the agreement to sell your house, as a real estate agent can make selling of your home easy.
So, with this in mind, you should expect real estate agents to give different opinions on your property value in the market, especially for those properties rising in the markets or the unusual ones. If you decide to sell your house with a real estate agent, you should learn the following simple but very important steps to help you with your sale.
Selecting an agent
Selling your home without a real estate agent is a choice if you have the required knowledge, ability and confidence to discuss contracts and prices. You must have current market knowledge in order to price your home right, defend an appraisal by the buyer’s lender and get yourself to the closing table.
If you would rather leave it to the professionals, the following tips will help you find the best agent to sell your property.
Make your own research
Before meeting with real estate agents, you should determine the worth of your house and the market state, by doing your market research. Watch closely home ads and websites for sale results and auction. Ensure that agents provide their recent sales list. You should consider employing the services of an independent valuer to know the real value of your property. Valuation of your home differs from an assessment by an agent, which is occasionally an estimate that is a little improvised. An independent valuation is an expert estimation of a property’s value by a valuer that is registered. Keep in mind that the market value of a home may differ greatly than the appraisers valuation of the home.
Get out in the field
Visit houses for sale and act like a buyer in your area to get a notion about the value of your property, the state of the market currently and how your house compares to others in your area. This enables you to assess the agent’s opinion on your home market value and to understand if they’re underestimating or overestimating the value of your home.
Also, visiting homes auction is to evaluate agents’ responses to inquiries such as “why are they selling?”, “how are they on the price negotiable?” and ” for how long has the house been on the market?” This gives an insight on how real estate agents answer these tricky questions.
It might be a mistake to choose an agent who gives the highest estimate (in some states like Texas, only approved valuers can give a ‘valuation’ of your home).
- The first step in interviewing an agent is to ensure that any real estate agent you are considering is registered in your state. Texas has a criterion for eligibility and education for registered or certified estate agents. Texas state also require professional development programs too. Make arrangements to meet at least four agents. Compare their market assessments to get a proper understanding of the value of your property.
- You can also use this opportunity to evaluate the sales experience, personalities, professionalism and achievement of an agent. Also, check the qualifications and credentials of the individual you meet. They might be a salesperson with less qualifications and training under an agent’s watch.
- Never be in a haste to make a decision about which agent to choose. Most individuals start discussing business with the first agent they come across, and some of them will end up getting stuck up with an exclusive agency for a period of time, even if they’re unhappy about it.
When selecting a real estate agent, ensure that they show you with the following:
- Proof of success in your area.
- A market worth assessment that seems correct, when compared to your independent valuation and your research as well.
- A price guarantee or signed market value estimate will do.
- A plan for marketing your home.
- Advice on the steps you can take to make your house more eye-catching to potential buyers.
- An assurance to give you regular updates and reports.
Agents normally charge between three and four percent of the price of your home sale in a listing commission fee. That’s $15,000 to $20,000 for the sale of a $500,000 property. This fee does not cover the 3% paid to the agent who brings the buyer. Some agents will offer al a carte pricing for their marketing while others include a robust marketing plan all within the 3-4% they charge. Be sure to compare the marketing plans along with the commission fee charged when determining which agent to hire. In some cases, a lower commission means less marketing and potentially a lower price for your home so in an effort to save money, you actually lost money by not having your home exposed to as many buyers as possible.
Fees of agents can be arranged in various ways:
- Some real estate agents might charge a higher fee – up to 10 percent – with advertising inclusive.
- An agent might charge you based on a ‘no sale, no fee’ or, charge you for signup and the costs of advertising irrespective of whether your home sells or not.
- Some real estate agents ensure that you’re pleased by offering you low flat fees. With such agents, you can get a better price, and that their focus won’t be only to sell your house quick and cheap.
- You might be charged a scale of commission, especially for properties that are more expensive. For example, you might be charged 2.5% on the first $800,000, and 5% after that. This offers a further encouragement for the real estate agent to sell your property for a higher price, and not sell the property very fast for a lower price.
- Some agents give you the opportunity to pay a lower commission by sharing some promotion and marketing costs. Don’t pay a fee upfront. You should only pay your real estate agent after the completion of your house sale.
Some states like Texas require that all fees, together with advertising fee, should be outlined in the agency agreement. You should always remember that all fees and commission are negotiable. This might not always be noticeable from the agent.
Signing an agency agreement with a real estate agent
There are three key types of agency agreement:
- Open listing or general authority: you can list your home with more than one agency and you only need to pay commission to the real estate agent who sells the house. Listing with one or more agency gives your home more coverage in the market than with just one agency, however the sale of your home may not be a greater priority for the real estate agents. There’s also a possibility that you will not get the best price if different agents are competing to sell your property quickly.
- Exclusive authority/agency. You pay the agent upon the sale of your property, even if your property ends up being sold by another agent or by the homeowner. Signing up for a contract that is lengthy is a trap. For example, a friend of mine told me how he signed up with an agent for six months and bemoaned about it later. Why don’t you try signing up for a month first, and you can extend the contract if you’re satisfied with it.
- Individual agency. This is similar to an exclusive agency; the only difference is that the agent won’t be eligible to get a commission if you sell the house yourself. You shouldn’t feel pressured to sign up for a contract after your first meeting.
Texas have a cooling-off period for agency agreements and have a control on the time limit for which an exclusive or sole agency agreement can last.
You don’t have to be pressured to sign the contract agreement an agent brings forward – it is strongly advisable to have a lawyer check it and change some terms if deemed necessary.
Private sale or auction?
Some real estate agents think the best value of your house is realized at an auction, where there is pressure, competition and high emotion among potential buyers which may lead to higher biddings. Other agents have an entirely opposite opinion as they argue that private sale of your property is the best way to go.
You should ask the agents to clarify their opinions and the advantage and disadvantage of each method for your situation. There are no tough and firm rules about the types of property that are more suitable for a private sale or an auction or, but some of the PROS of each method for home sellers include the following:
Auction advantages for sellers
- There is no price limit, which means there is always competitive bidding. This is great for a rare property that is desirable and is hard to price.
- A certain sale of your property, when the reserve price of your property is reached.
- It encourages potential buyers to act as fast as possible because the deadline for the property sale has being set.
- It can ascertain the most proper buyers to discuss with if the property sale isn’t finalized at the auction.
Advantages of private sales for sellers
- You have the luxury of time to deliberate potential buyers’ proposals.
- Potential buyers make blind offers, without having the knowledge of what other buyers are offering.
- The expenses for advertising can be less expensive than for auctions.
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