Most people find that hiring a real estate agent is a critical step to take in the process of selling their home. The agent will receive a substantial commission, which will be a percentage of the price for which the home sells. However, you will receive many benefits in exchange for the commission, probably including a more efficient sale and a higher price. Your agent can help you determine the price that you should set for your home and assist you with getting ready for the sale. They can recommend professionals who can make the property look more attractive to buyers, and they can help you strategize to maximize its value.
Once you are ready to put your house on the market, the agent will advertise it and represent you in responding to inquiries from potential buyers. They probably will handle the process of walking people through the home and may arrange open houses. You may not be familiar with the laws on disclosures in your state, but your agent can make sure that you comply with these important requirements. (They can play down the drawbacks of your property as part of their sales pitch, but they cannot help you deliberately hide a problem from a prospective buyer.) An agent also will play a key role in receiving offers from buyers, reviewing offers, and negotiating a deal that is favorable to you and efficiently resolved without unpleasant surprises.
Finding a Real Estate Agent
Many real estate agents will be eager to offer their services to a homeowner, and they tend to take similar percentages as a commission. You should take the time to evaluate the services provided by various agents. Most people retain the first agent whom they contact, but this is because they usually do research about them beforehand. Your agent should have the relevant education and certificates, and they should have a solid track record in the field. Just as importantly, they should be someone whom you trust and with whom you feel comfortable. You can ask them whether they will be working with you personally or as part of a team. You may want to find out whether they specialize in a certain type of property and how they believe that their marketing strategy differs from other agents. Some agents will provide homeowners with references.
The average real estate commission is 5-6%, often split between the buyer’s and seller’s agents and paid by the seller. Sellers may feel compelled to negotiate a lower commission fee, but they should consider whether a lower fee will decrease the amount of time and money that their agent can afford to spend marketing their home. It may also affect how many buyers’ agents choose to show the home to their clients.
The first step to take in looking for a real estate agent consists of getting recommendations from friends, coworkers, and family members. People who live in the same neighborhood as you may be good sources because they probably have worked with agents who are familiar with the area. You can also explore agents online, looking at reviews and searching their names. Eventually, you will invite a prospective agent to your home so that they can prepare a comparable market analysis, also known as a broker’s price opinion. This will help you determine the price range for your home. Reviewing the CMA (or BPO) for its thoroughness and persuasiveness can give you a sense of an agent’s skills. If the suggested listing price seems very high, the agent may be exaggerating your home’s value to induce you to hire them.
The agent also will put together a marketing plan for your home. You should beware of plans that sound generic, which suggest that the agent will not put much effort into marketing your home.
A situation in which the same real estate agent represents the buyer and the seller in a transaction is known as dual agency. While this was widespread at one point, it has become less common with time. Most often, dual agency takes form when a buyer arrives without an agent and asks to share the seller’s agent to save money. You should think carefully before agreeing to this suggestion. Since you are paying a commission to the agent, they should fully represent you without any conflicts of interest. However, if the negotiations are likely to be efficient, and no significant issues are disputed, you may find that dual agency works well enough.
Did You Know?
Dual agency may be limited or illegal in some states.
A variation on dual agency is called designated agency. In this situation, the buyer and the seller have different agents, but the agents come from the same brokerage. There technically should not be a conflict of interest, although the concern persists that the two agents will share each side’s information with the other.
Forming the Agent-Client Relationship
You will need to set up your relationship with your agent through a written agreement. This involves determining the percentage of the sale that will form the agent’s commission. An agent usually receives about five percent or slightly more of the home’s sale price, but you may be able to negotiate for a lower commission if you are handling part of the process yourself or if you are using the same agent to buy your new home. You also may be able to reduce the commission if the buyer does not have an agent or retains an agent in the same brokerage.
The listing agreement will provide the terms of your relationship with the agent. It will outline the agent’s obligations and provide you with recourse if the agent fails to follow through. Any dispute likely will be resolved through arbitration or mediation. If the agent uses a standard form, you should review it carefully to make sure that it protects your interests. In most cases, the agreement will last for a certain amount of time and will give the agent the exclusive right to sell your property during that time. An agreement often lasts for three to six months, with homeowners favoring shorter terms and agents favoring longer terms. It may contain a protection clause that covers sales within a certain short period after the agreement expires. The agreement also may require the homeowner to verify key facts about the property.