Choosing An Agent to Sell Your Home

Choosing an agent is a curious and often confusing thing. Many of the folks that I meet with are quite diligent in that they interview with a number of Realtors to determine who is best qualified to sell their most valuable and beloved asset, their home. 

Most of these people have two burning questions on their minds – how much is my home worth and how much are you going to charge me to sell it. They often fill in the blanks on who they should choose based on likability, the number of signs that appear in the neighbourhood, fancy awards exalting that agent’s success, who has Justin Trudeau hair or any number of subjective criteria that never really properly address what matters most. Rolled all together, a decision is made and we have winners and losers on the Realtor side but not surprisingly, we have winners and losers on the home owner side as well. 

I would like suggest to you that Justin Trudeau hair, the value quoted for your home or the fees for service are wholly inadequate tools to determine who best to choose.

If two or three agents vary on the value of your home, than someone has failed to interpret the market correctly, for the market value of your home exists outside of any Realtor’s opinion. This is not unlike the stock market – the value of your prized asset does not lie in a Realtor’s hands but rather in the hands of the buying public. Choosing an agent based on who provides you with a number that best suits your needs or your hopes is absolute trickery. 

With regards to fees for service, there is an inherent fault in choosing this as a criteria to select your Realtor. Will all agents generate the same sale price for you? Of course not. Is it possible that one agent is savvier as a negotiator than another? Of course it is.  An agent can have a dramatic impact on how much your home sells for. The net sale proceeds returned to you are of utmost importance. It is distinctly possible that the agent with the lowest fees is not the agent with the highest net sale proceeds to you so we need to dig deeper. 

Signs on the lawn, fancy awards and good hair aside, we need a different set of tools to analyze the value add of the Realtor sitting in front of you to determine whether they are best qualified to sell your most valuable asset. This is about who is going to put the most money in your pocket in the shortest amount of time and with the least amount of pain. 

See in today’s robust real estate market, Ottawa’s MLS system sells a whopping 49% of the listings taken. Yes, more than 1 in 2 listings taken do not sell. 51% of the listings taken in 2015 failed to sell. Wow. We averaged 109 cumulative days on market for the 49% that actually did sell. Wow. The average agent is selling less than 5 homes annually and there is a 3-4 % spread between the list price and the sell price on average. Yikes. How do you like your Realtor now? 

Let me ask you, when you are sitting across from the two or three agents that you are interviewing for the position of Real Estate Professional, have you factored in a 1 in 2 chance of success, and a 109 cumulative day listing period if you happen to be the lucky one out of two? Did it cross your mind that the agent sitting in front of you might sell a house 5 times a year and they negotiate away almost 4% of the value of your most prized asset? Can you afford to be average? Of course not, but statistically speaking average is just that – the most frequently occurring experience in the marketplace today. 

The harsh and humbling reality for all of us Realtors is that the market exists outside of any one agent. It’s an agent’s ability to interpret and manipulate the market that ultimately determines whether you are a winner or loser in the current real estate landscape. Warren Buffet is often regarded as the most successful investor of all time and his success is a function of his ability to interpret and maximize the market that he plays within. He does not control the market any more than your real estate agent controls the housing market. He just interprets it better. 

So what if we reframe the question and find a way to determine which Realtor is interpreting the market better.  Let’s put aside big hair, beautiful awards and juicy prices that might have come as much from your desires or circumstance as it did from the agent’s thoughtful appraisal and let’s look deeper. How about this – how long on average does it take a given Realtor to sell his or her listings? Of even greater importance, how often do they have success? That’s right, what percentage of their listings are actually selling? Another important consideration, how much practice do they get? Most of us would prefer a heart surgeon that does a lot of heart surgery rather than 5 or 6 a year because practice makes perfect or at least better. Finally, how well does you Realtor negotiate? In other words, how much of a spread is there between the list price quoted and the actual sale price generated? 

If you had answers to these types of questions would you be better able to qualify the agents you are speaking to?

Let me assure you, all agents are not created equal. The results generated by the best far outstrip the rest. The challenge is finding the questions and having the tools to better qualify the agent at your kitchen table today. 

Next time you sit down to determine who is best suited to sell your most valuable asset, I would suggest that you put aside some of the normal questions and look under the covers. Let’s find out how long your agent takes to sell a home, how often are they successful, how often do they get to practice and how much are they going to put in your pocket when all the dust and pomp and pageantry settles.

This is about getting you to the highest net proceeds with as little pain as possible and now you have a better set of tools to do just that.