There is no shortage of representation these days and the only way to know if an agent is right for you is to do some digging and ask some hard questions.
Buying or selling a property? You may want to do some research before you start working with an agent. There is no shortage of representation these days and the only way to know if an agent is right for you is to do some digging and ask some hard questions. Here’s a list of things to consider:
Agents work on Commission
Agents have a 100% commission based salary, that means no bonuses and no hourly/yearly wage. This can work out to be in favour for first time home buyers as buyers are not expected to pay a realtors commission; the seller is. With no home to sell previously, the buyer gets a free for all in terms of representation.
Having a salary that is solely commission based can take a toll on some realtors as they have to put in effort, time, gas, money (for advertising) months in advance as they only get paid once the house closes. This could be anywhere from 30 days to a year or two out. If the buyer or seller decides to back out, that is lost revenue for the realtor.
Time is money
When choosing an agent, whether buying or selling, you want to make sure that you are using their time as effectively as possible. At the same time you want to make sure that your realtor is respecting your time and concerns by showing you properties that are of interest to you and not wasting your time by showing you properties that:
- Are out of your budget
- Are not in the age range you provided
- Are not in the price range you provided
- Are not your style
- Can not close at the time frame you are looking for
You also want to make sure that the agent you’ve hired to sell your home will be dedicating enough time towards the advertising of your home so it can sell in a timely manner. Prior to signing a contract with your chosen agent make sure open house details, private showing details and advertising details have all been discussed.
Commission is almost always negotiable
Planning on selling your house, but are afraid of the commission that’ll be coming out of your hard earned equity? There are no set rules in real estate. Don’t let agents fool you into believing that there is a “going rate.” The selling agent has a lot of room to negotiate their commission with you. Some agents are willing to work as low as .5% of the selling price in commission and some realtors charge as much as 7%. Of course there will be a difference in the type of service that you receive, but if you do your due diligence and ask the realtor what kind of services will he be providing in his commission, there shouldn’t be any surprises in the end. Some of the things that agents can provide in their package are;
- Professional photography
- Virtual tour
- Additional incentive for buyers agents
- Snacks for guests during the open house
Your agent may not always have your best interests in mind
A house sold at the highest price means more commission for the agent, which means they’ll work to get you the highest price possible for your home, right? Not always. A real estate agent has more to think about then their net profit at the end of the day. An agent often times may sell your house earlier for a lower price point, simply because they do not want to go through the hassle of waiting for a better offer. Waiting for a better offer means they have to spend more money on advertising, spending more time at open houses and private showings for an offer that may never come. Other times agents may prefer higher volume rather than higher price because they are afraid the transaction could fall apart.
It’s always best to think calmly about every offer that is presented, and to only move forwards if you are sure it’s what is best for you, and your family.
Your open house probably doesn’t matter
Remember that house that you spent all morning cleaning and getting into pristine condition? It most likely will not make a difference in the sale of your home. Today is the age of technology, where buyers look online at a property before showing interest to actually go see it. And if they are interested in a property they aren’t going to wait around for the next open house to go see it. They will either call their agent or the listing agent to book a private showing. According to research only 4% of homes sell through open houses. Open houses are usually a time for nosey neighbours to come see every detail in your home that you successfully had hidden from them in the past. And more often than not your real estate agent is using it as a canvas to advertise him/herself. So the next time your agent calls you to tell you that next week’s open house is cancelled, don’t worry about it and think of it as a day off from all that cleaning!
You don’t actually need an agent
Whether buying or selling a property, one thing to consider is; “would you like to represent yourself?” You really can just represent yourself if you think you’re the only one that can get you the best deal. In all fairness while selling a home; agents have a much bigger networking and will probably be able to get you connected to people that would be impossible to reach without their help.
Buying a home yourself is significantly easier. Some tips and tricks that have worked in the past while representing oneself in the purchase of a new home is to always do your due diligence before submitting an offer for a property. Make sure you have studied past sales in the community to get an idea of what to offer for a home. Watch MLS frequently for newer properties that come on the market. One downfall is that properties take 3 to 4 days to appear on Realtor.ca. In today’s hot GTA market some properties are gone before they ever reach it. If you have found a property that you love remember to reward yourself for your hard work! Make sure you calculate your commission in your offer.
Whether or not you choose to hire a realtor, buying a home is one of the biggest investments that a person can make. Take your time accepting offers, enjoy the process of buying a new home and if it gets too stressful, step back, breathe and jump right back in! Happy Hunting!