Remember the jitters you felt when you bought your first house? Get ready to feel them again if you're planning to sell your home. One of the best ways to keep your sale on track and take the pressure off your shoulders is to hire an experienced real estate agent.
When you sell your home, you want to get the greatest possible return on your investment and find the most qualified buyer. Marketing, showings, negotiations and closing must be handled in a short time frame; you might not want to tackle all that on your own.
With so many different real estate brokerages and agents out there, it can be hard to know whom to trust. Here are tips and interview questions you should ask potential agents before choosing one to list your home.
Word-of-mouth referrals are great, but not everyone who sends a name your way has actually used the person to sell a home. Ask the person who's doing the referring if he or she worked with the agent, says Tom Salomone, president of the National Association of Realtors. A referral doesn't hold a lot of weight if it can't accurately convey an agent's quality of work, communication style or manner of treating clients and other people in a transaction.
You wouldn't settle for just one bid if you were renovating your kitchen or getting a new roof, right? Likewise, you should interview at least three agents in person to see whether you feel comfortable with them, Salomone says.
Zach Finn, an independent real estate agent in Fort Lauderdale, Florida, agrees. You don't want to default to a popular brokerage or the first agent you find on Yelp; do your research, Finn says.
"The fact is, having a license doesn't make you a real estate expert," Finn says. "Many people make the mistake of going with the first agent they meet or hear about."
Some agents have plenty of experience and happy clients to their credit. Some, however, haven't closed a deal in years. Research credentials online and make sure agents you're considering are licensed to practice in your state. When you visit an agent's website, check the number of current and recently sold listings.
Real estate agents can earn professional designations conferred by trade organizations, such as the National Association of Realtors or other groups. While there are plenty of good real estate agents who don't have these designations, extra training shows a commitment to learning best industry practices and delivering top-notch service.
When you interview potential listing agents, it's important to be prepared with a list of questions. You want to see if someone is qualified and has the right experience not only to market your home, but to get it sold as quickly as possible and for top dollar. Ask each agent:
What are the comparable listings in my neighborhood? If an agent you're interviewing doesn't have a list of comparable homes that have sold in your neighborhood on hand, that's a huge red flag, Salomone says. Comparables (called "comps" in the industry) are the pillar for determining your home's value and deciding on an asking price. A well-rounded comparative market analysis will show current listings and homes sold in the past three to six months that are similar to yours in size and amenities.
What do you think my home is worth and why? During a listing presentation or before it, most agents will ask to walk through your home so they can take notes and see what they'll have to work with. It also helps them crunch numbers against the comps to provide you with an asking price they feel is in line with market conditions and your goals. You might have an asking price in mind, but your agent might not agree. "It's important to have an agent that will support your decisions but is also willing to tell it like it is," Finn says. "The right agent will challenge your idea and perception of an inflated market value and try to set realistic expectations."
What would your marketing plan for my home include? A good real estate agent will have a robust plan to promote your listing in an effort to find the right pool of buyers. "Just listed" postcards, open houses, virtual tours, professional photography and/or broker tours for buyers' agents (particularly for luxury homes) are all factors that may go into a marketing plan. Ask for examples of marketing materials and scope out agents' websites to see how they promote their listings.
Are you a full-time real estate agent, or is this a side job? This question is crucial because selling real estate requires full-time effort and shouldn't be treated lightly, Salomone says. "You don't want to hire someone who can't take calls on your home and show it during the week because he or she is working 40-plus hours somewhere else," he says. Ask agents how long they have been selling real estate and how many listings they've sold recently. If someone hasn't closed a deal in several months, that's a reason for concern.
What is your commission rate? The typical real estate commission is about 6%; oftentimes, the listing agent splits that amount with the buyer's agent. Some agents might be willing to negotiate their commission, but don't count on it. After all, you're paying for a professional service. Leave the commission question for last, but make sure you understand how much you'll be charged for a real estate agent's services -- and what exactly is included.
Once you've met with a few agents and found one you click with, you'll likely sign a listing agreement in which you agree to a certain term of service at a set commission rate. Typically, contracts range from 90 to 120 days, assuming it will, on average, take about 40 to 60 days to get from listing stage to an accepted offer. Keep in mind, though, that this timeline could be shorter or longer, based on local market conditions.
Now that the tough part is over, relax and let your real estate agent take the wheel. Make sure to keep the lines of communication open with your agent so you know what's happening with your home. Happy selling!
Deborah Kearns is a staff writer at NerdWallet, a personal finance website.
This article originally appeared on NerdWallet.
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