When you’re selling your home, you need to find a real estate agent who’ll get the best possible price, in the best possible way. Wendy Brown, Head of Broker Home Loans at Macquarie’s Banking and Financial Services Group, quizzes Adrian Kelly, the chair of the Real Estate Institute of Australia, about how to find the right agent for you.
Wendy Brown: Thanks for taking the time to talk with us, Adrian. We’ll start with an easy one. Why is choosing the right agent to sell your home so important?
Adrian Kelly: It’s critical on many levels, particularly when the market is a little bit quiet or it's challenging. When the market's flying almost anyone can sell real estate, so in a softer market you really need to get the right person, who knows their product and knows what they're doing. It all comes down to how you relate to them, whether you feel comfortable with them. Ultimately, you want someone who's going to do the right job for you. The right job is most likely achieving the best sale price within the shortest period of time.
WB: So how do you find the right one?
AK: The most important thing is recommendations by word of mouth, that's gold when it comes to real estate. Rather than a real estate agent telling you what they've done, it's far better hearing from other people that they have actually done a good job. I don't think it matters whether you end up with someone who's been in the industry for 25 years or someone who's been in the industry for 12 months. Quite often a younger person has a lot more energy, and they're willing to go the extra mile because they're building a brand and a name for themselves.
WB: What are the biggest misconceptions you see when it comes to choosing a real estate agent?
AK: There are two common misconceptions. The first one is you save money by engaging the cheapest agent. You don’t – it’ll end up costing you money.
You wouldn't take yourself to a cut-price dentist, and you certainly wouldn't employ the services of a cut-price surgeon, so if you're selling your home, which is likely to be your most expensive asset, why would you choose a cut-price real estate agent? There's no logic in that at all.
Another misconception is that people see real estate agents as wealthy people driving nice cars and wearing black suits. I think that's a shame because there's a lot of excellent real estate agents who might not fit the stereotype. Real estate agents come in all shapes and sizes, so a person who's got the shiniest suit isn't necessarily the one best equipped to sell your property.
WB: So you’ve talked to a few agents, got a few quotes to compare – what are the most important factors to consider now?
AK: That word of mouth recommendation is number one. If you're choosing an agent to work for you and you've got no recommendations whatsoever, then I'd tread carefully. You also need an agent who's willing to work after hours, and not all agents are happy to do that. I’d also prioritise an agent who keeps themselves up to speed in terms of technology because there are so many useful tools at our fingertips these days. From a marketing point of view, I'd be choosing an agent who doesn't put all of their eggs in one basket. So a nice, clever, quality mix of photography, various websites, various print media and some social media as well.
WB: Does a higher commission usually pay off in a price premium on your sale?
AK: I believe the more commission that you are paying, the more incentive you're providing to the agent to achieve the highest possible price. That's just how it works. The agents who are charging a very low commission are generally after a quick sale. For every one property which I might sell at a higher commission, an agent charging a lower commission would need to sell two or three properties to earn the same amount.
WB: How does an exclusivity period typically work?
AK: When a vendor signs an agency agreement, they're generally signing up with just the one agent, and that's the way it should be too. Once you start multiple listings with different agencies then no one takes responsibility. You want one agent in total control who will take ownership and accountability for delivering results. That period of exclusivity could be anything from 30 days, maybe up to 120 days.
WB: What agent 'promises' would set off alarm bells for you?
AK: An agent who promises anything sets off alarm bells for me! So again, I'd be going on track record. I'd delve closely into what an agent means when they promise to give you lots of feedback. I'd want to see concrete evidence of how the agent provides feedback. How they do their follow up calls of potential buyers after an open house? What sort of weekly reports are you going to be provided, both from follow-up calls and the various website analytics they use?
WB: Is it essential to pay for 'extras' like home styling and rental furniture when you're selling?
AK: No, definitely not essential but it’s worth considering, it depends on the nature of the property. Styling can be expensive, but it can also help achieve a premium price. Some properties can look hollow, empty and cold without some styling, but some styling can also look quite fake. It depends on the property.
WB: So any final tips for finding the best agent for your property?
AK: I think some of the very best real estate agents across the country are those middle road, really nice, honest-style people who have been agents for a long period of time and are well respected within their communities. They may fly under the radar, have their head down, tail up and get on with it. Those people may well be a better alternative to agents who continually spruik their status as being the best in the area.
Word of mouth recommendations are essential, and I would avoid the websites out there that compare and recommend agents because most of those websites are there to serve a purpose and that's to make money. In return for being recommended, certain sites might get a share of the commission. Good agents don't need to have anything to do with such sites.
- Choose your agent wisely – the wrong choice could cost you significant amounts of money.
- Always go on word of mouth recommendations.
- Don’t be put off by someone who’s only been an agent for a short period of time – they could be hungrier and go the extra mile.
- Choose an agent who will work ‘out of hours’ – particularly if you’re working full time.
- A higher commission can incentivise a higher sale price.
- Don’t assume the agent who positions themselves as ‘the best’ in the community actually is. Look for agents who ‘fly under the radar’.
- Be wary of comparison websites that recommend certain agents – they could be getting incentives to do so.