Imagine you are interviewing an outstanding criminal defense attorney and the first question you have on your list of priorities is "What is your hourly rate?" Personally, that would perhaps be a consideration. But it would probably be pretty low on my list of priorities because long ago, I learned that you get what you pay for, and for something this serious, I wouldn't want to fly in E class.
I'll be the first to tell you: Real estate agents are desperate for listings. Don't be too fast to say, "What kind of wisdom and knowledge does it take to navigate a flood of buyers overbidding one another for prices that we never imagined in our wildest dreams?" Even though you might interview a few recent sellers who say, "I feel I overpaid for the services we received," the majority of sellers who employ top real estate agents from the REAL Trends top 1,000 list or agents recognized in their geographic area, would say, "We felt very satisfied with the service and the outcome, and would refer our agent to a friend." Real estate agents do not charge an hourly fee, the same way an architect doesn't charge an hourly fee, or an artist who is commissioned to complete a project. Sure, you can hire a modestly talented craftsman or an amateur artist, but again, expect to get what you pay for.
A full-service real estate agent brings a lot to you before the "For Sale" sign goes into the ground. To start, your full-service agent has a reputation. That reputation is now extended to you and your property, in the same way the reputation of an attorney provides, who is well known for consistently prevailing, representing notable cases and respective parties. An agent with a track record and reputation has a following. His or her alerts, texts, emails, notifications and social media draw immediate attention. People know the agent's name, respect the name, and mindfully take emails, alerts and memos seriously, giving them greater value.
What this translates to is more attention to your listing and more respect to your price and listing guidelines. All these things potentially add to your final outcome. Imagine how many more contacts, connections, past clients, agents, business managers, attorneys, CPAs and followers a top agent has compared with a rookie or a personal friend in the mediocre ranks. Nothing against an average agent, but there are reasons why 80% of today's business is transacted by the top 10% of agents in the nation. Totally committed, full-time top producer's typically work over 70 hours a week, and they don't get paid unless they close escrow.
A top agent deserving of his commission is a talented first-string negotiator. Strategy and negotiating skills are easily overlooked in the interview process, but these skills are critical and deserve your very careful consideration. Ask questions; speak with past clients; and read reviews to verify strategy and negotiation skills.
Track record of closing and fallouts is also very important. A top agent has an impeccable record for escrow closing with very few fallouts on an annual basis; in fact, a top agent should consistently maintain a 95% closing record, regardless of changing market conditions. A top agent is detailed and meticulous; crossing their T's and dotting their I's; always researching issues before bringing them to a seller for consideration, staying in front of contingency dates and possible deal-breakers before problems set in.
Finally, the big downfall and disconnect between an agent and a client is highly predictable when the agent is good but ends up delegating everything to team members. A busy agent is a "good agent" but cannot be too busy to be hands-on for you. It's the kiss of death when your agent starts disappearing on you midway into a deal. The agent deserving of a full commission gives you undivided attention, always making you feel as though you are the only client sending you updates and feedback by the personal text, emails or handwritten notes. A good agent will pick up the phone to call you before you start to wonder what happened. You shouldn't even know he has other clients because he is so personally attentive. A top agent needs staff and an assistant to help but not to run your business, and certainly not to replace him when, in fact, you hired an agent who you felt chemistry with, anticipating him to be there for you the entire way.
Now, after you covered all of these important issues, go ahead and ask, "What is your commission?" Yes, you need to be fully informed, and you also want to know for how long you are making the commitment. You might even ask about what your cancellation rights might be. Take the process seriously, and remember that agents who consistently sell with high ratings and top reviews are usually worth paying full commission. Also, remember to concentrate on your equity and final proceeds more so than the commission, because at the end of the day, who cares about the commission? What's important is what you end up with.
For more information, please call Ron Wynn at 310-963-9944, or email him at [email protected] To find out more about Ron and read his past columns, please visit the Creators Syndicate webpage at www.creators.com.
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