Dealing with real estate agents

[csb (Craig)]

I have 2 real estate agents visiting next week and I plan to ask them what price they think that I should be asking for my house (I plan to sell this year).

Has anyone taken this approach?

Was the agent happy to answer the question?

Did the agent not answer the question? Did the agent explain why?

Did the agent turn the question around?

I am taking this approach because a few days ago I had an agent out and of course he asked me what price I'd be happy with. He said my stated price is achievable and explained some things about people who buy reno jobs with my house as the example (the house is run-down ).

After our meeting and due to some of the things the agent said, I started to wonder if perhaps I had given too low a price. I think that I would suffer seller's remorse if the house sold too quickly.

I would like to know what the real estate agents' responses might be so that I am prepared when I ask the question.

[glend (Glen)]

Its very hard to pin these guys down, and they offer no guarantees, only point to recent sales in your area. They might give you a range. They will always say your price us achievable because they want to list your house, and they know that buyers come with expectations as well. They play you off against each other, someone blinks. Are auctions the go in Adelaide? In Sydney everything is auctioned. Different tactics for auctions.

[xelasnave]

I hope I can help.
I owned a small office and later worked in a position of go between a Government Dept and many real estate agents.

I always felt I was a cut above most of the agents I have ever dealt with.

Firstly in those days agents would tell an owner an inflated price to get the listing and then work upon the owner to reduce the price having signed up the listing.

This was common practice and I missed many many listings because I gave reasonable estimates and then see the property sell in the range I suggested usually well below the figure given by the listing agent.

My thoughts.
Call in the agents who sell in the area. I would get at least three.
Ask each the following.
How much should your how sell for.
What sales have taken place that suggests that selling price?
Make sure they give prices, addresses and dates. How long each on the market.
What sales has their office recently made, be specific, where when.
Ask how long the agent has been in the business and what he used to do.

Many go into real estate because it seemed like a good idea but really they wont last.

Ask that if you listed do they personally have a buyer in mind or will they have to advertise.

How long should your house take to sell?

Ask each if they like auction and how they do it.

As a generalisation there usually are less buyers than many expect.

Price the property to sell. Pricing higher than the market often causes the property to sit.. If too expensive folk wont make an offer so you find thehouse goes stale and then even when the price drops it maynot sell be ause folk wonder why it has not sold.

Each agent has a style, try and go for one that seems professional who you get on with and is not just passing thru.

And if none of them impress keep looking.

I could not believe the poor quality of agents when I worked for the Government.
Also make sure theydo what they say. Keep the appointment, returned the presentation when they promised.

Good luck please feel free to ask if you need my comment.
Alex

[Boozlefoot]

Make sure to count your fingers after shaking hands with them!

[csb (Craig)]

Yep, the first guy gave me some warnings about other agents when I told him, the next day, that 2 other agents were coming over.

Auctions aren't the in Adelaide. Mainly used for deceased estates and property settlements, eg divorces.

Alex, the real estate offices now have profiles of their agents on their websites. This usually includes past sales (with prices) and current listings. Also 2 of the agents had a package delivered to me that includes exactly the data you mentioned.

Agents risk penalties now if they highball the price or advertise an unrealistic lowball price. Vendors/buyers can report the agents.

I'd still like to hear from others.

PS, Thanks Alex, I'll keep your offer in mind.

[casstony]

We sold our house a few years ago and I found the agents to be surprisingly reasonable to deal with; I had been expecting something akin to the stereotypical car salesman experience.

The main point I'd like to mention is that house prices are about double their long term average due to the boom since 1990, so the agents fee should be a lower percentage of the sale price. The fee is negotiable.

[Shano592 (Shane)]

When we sold up in Perth to come to NSW, we had 4 agents come out and give their thoughts.

We didn't let them lead us for price, as that was what we had them there for.

In the end we chose someone in the middle, with whom we felt comfortable, and was who was willing to work for us.

Sold in 6 days.

[Sol-Skysailor (Sol)]

Here's from direct experiences.

*Serious advice but my opinion is humble. Do own serious research. Not hard, doesn't take long.
Supplement all reports of median, average, R/E opinions, etc. with your own assessment that will
help you best about decision and risk taking -as all things in life are.

*One approach is to first 'test the market'. Name a price. There's random timing factor though.

Never rely on R/E; work with them, but have own firm foundation.

R/E prefer to move properties quickly,
for 'see, we get quick results' and '$ in chasing a little higher sale is less than $ from more sales'.

Some R/E are inexperienced! Some are skilled. Trust self only, after research.
*There's more to selling than selling.


(A story that applies also to non-auction sales and rentals:
I watched a senior auctioneer a few times before choosing him.
I followed sales and watched a few auctions and had my own assessment.
Testing the market, at my auction (scared, I had moral support; presence only, don't lose friends),
The well-trained tall big R/E skilfully chose an actual-soil higher ground to
talk 'down' to me about price (and easier wrap-up). I stood my ground and quietly instructed.
He didn't like it at all but did as instructed. I got my price, at my risk.)

BUT but but..... I do have conflicts about high price and own survival.

Lastly, of my meagre patch and learning from research, a few examples worked well.
Buy and live in half while renting out the other half. Rent out and live in another cheaper rental.
So even selling, in some cases, needs to be after assessing: *decorate first then sell, *decorate then rent and live elsewhere, develop into two -sell one and keep one, sell by self w/o R/E. (For myself I prefer to own zero.)

[csb (Craig)]

Thank you everyone for good info. Your experiences have been helpful.

Thanks Shane, I wanted to hear from someone who got the agents to suggest a price. So this seems the correct way to proceed and the agents shouldn't find it a problem.

This is first time I will have sold a house, been living here 20 years.

[julianh72 (Julian)]

We have recent experience - we listed our home about a month ago, and after a short settlement period, we moved out this past weekend.

My advice:

Talk to at least two agents who are well known in your area.

Ask them what they think your property is worth - don't tell them what you think it is worth before getting them to give an estimate of a realistic selling price - remember, they are supposed to be the experts! (Note - they may well ask for a day or two to come up with a "firm" estimate range - this is reasonable, because they will want to compare similar properties in the area, and get input from a few different reps - even though the agent will have a rough number in mind before they even knock on the door, and they'll firm up their own estimate within a couple of minutes.)

Don't treat their figure as a guarantee, but hopefully, it will be realistic. Ask them if there are any "special" factors that make it hard to narrow down (e.g. yours is the only 4-bedroom house in the neighbourhood, so there is nothing directly comparable) - they should be able to give you an estimated range to within +/- 10% or better, say. If they can't give you a reasonable estimate range, and assuming your property isn't truly "unique" (getting a firm selling price estimate for Buckingham Palace could be tricky!), then I would suggest that they aren't as expert as they claim!

Ask them how they propose to sell the property (e.g. listed price, "by negotiation", auction, etc), and get a firm quote on all of the marketing costs, etc. Check that they list on Domain.com and RealEstate.com - this is probably more important these days than an ad in the local newspaper.

Ask for their opinion on what maintenance / upgrade jobs are worth doing before listing, if they will add more value than they cost. (E.g. if the house is in pretty good shape, but the paintwork is looking tired, is it worth getting a quick repaint first? Replacing a worn-out moth-eaten carpet with a cheap new carpet would only cost a couple of thousand, but might make a huge impact on first impressions.)

Then - pick the agent that you feel most comfortable with over-all, even if their estimated selling price isn't the highest, and / or their commission / fee price isn't the lowest of the lot. Never forget - they are working for you, not the Buyer, so you want an agent who will squeeze every last cent out of the prospective Buyers, rather than trying to convince you that you, the Seller, need to lower your expectations. Their fee will be almost the same if you drop your price by 10%, and it is in their interest to sell as quickly as possible (less work for them to sell in 1 - 2 weeks rather than 4 weeks or more), so there is no substitute for having a good trusting relationship with your agent.

For what it's worth, the agent we chose listed our property with an asking price (knowing that we would receive lower offers, but his job was to talk them up), we got 14 "genuine" inspections in the first week (no "open days", inspections by appointment only), we had a signed offer that was acceptable to us on Day 6, and 3 weeks later, Settlement was completed, and we moved out. (And yes, we were happy with the selling price!)

[DarkKnight (Kev)]

As an ex Real Estate Agent I may have a few clues for you.

First up, do your own research. Type your address into the Google search box and up will come a site that will give you a high and low guestimate on your property.

It is only a guesstimate, based on sold history of the property and capital gain rates in the area. It doesn't take into account the current condition of the house and the value of any improvements you may have made. It will give you a wide ball park figure only.

Back to Google and type in 'your suburb' Real Estate and you will get a run down on the current property listings in your area. Look for similar properties and also look at recent sales. What you are trying to establish is a price range that your property should fall within.

Armed with this information call in your local agents for their appraisal. DO NOT UNDER ANY CIRCUMSTANCES DIVULGE WHAT YOUR RESEARCH HAS INDICATED.

I should say at this point that a property is worth what someone is prepared to pay for it. The developer will want to steal it but the person looking for a home to do up and occupy may see extra value in it's features and location, such as proximity to schools and transport, and the big tree with a swing for the kids.

Ask the agents for a 'sell today' price and also what you may achieve if you were prepared to wait for the 'right buyer'. Ask them how they would market the property.

Your location is important too. You can always change what it is but you can't change where it is. Do a rough estimate on what it would cost to bring the property up to a good marketable state and ask the agents if you did that exercise how much value it would add.

The law states that an agent is legally bound to act in the best interests of his principle (you). However the industry seems to attract more than it's fair share of people who don't seem to be able to grasp that concept.

Good luck.

PS: I'm about to embark on the same journey with a 'doer upper' although I'll sell it myself.

[csb (Craig)]

Thanks Julian, some great questions to ask the agent. It is also interesting to hear of others selling experience.

Kev, I have already done the searches you suggested - so on the right track. Thank you for the agent's point of view.

To all, your comments have been very helpful. 2 agents visiting on Wednesday and my confidence and awareness has greatly improved!

The house straight across the road, same built year & style but in better condition than mine sold for $283,000 late last year. I went to open inspection and had a chat with the agent. That house looks tired, mine looks rundown. However mine has a couple of extras - a gully out the back full of tall trees and a study room. So possibly up near that price.

[julianh72 (Julian)]

Originally Posted by csb

However mine has a couple of extras - a gully out the back full of tall trees and a study room. So possibly up near that price.

But does your property have dark skies, with a clear 360-degree view of the horizon? Those features alone would add thousands to the selling price (for a certain sub-set of the market)!

[csb (Craig)]

Thanks Julian

That certainly will be my own important consideration for my next house.

[csb (Craig)]

Wonderful! I had 2 agents visit today and I asked them at what price they would market the house. What a difference for the sale value of my house!

They gave me a price range, with both starting from $260k. And both were able to satisfy me, with some recent/current examples, that this was realistic figure.

I also got a better appreciation of how the agents should work for me.

I have decided not to let them know what I will accept as a minimum and I think this will get them to negotiate harder for a higher price.

However, I intend to sign with the agent I saw a few days ago (the guy who I told what price I would be happy with) because his selling strategy is more appropriate than the others.

This agents commission is higher than the other 2 agents but in the first 3 weeks there will be no marketing fee - this is due to his selling strategy to try off-market sale in this period. This is all in writing!

Thanks again for your valuable advice

[AussieTrooper (Ben)]

It's a massive problem here in Vic. Overquote to the vendor to get the business. Underquote to the buyer to get them to the auction.

One local real estate agent nearby is the only one I would use.
If they fall more than say 5% short of their estimate, their commission percentage is cut.
That way, you can actually (I want to write the word 'trust' here, but can't bring myself to do it...) assume that they are not overquoting to get the business.
A reduced commission percentage on a reduced price has a severe impact on their payday.

[jenchris (Jennifer)]

I tried the type in your address and the picture it showed was about 20 years out of date. Next door wasn't built and they've lived there for 20 years .... after renting it out for two years. The price was substantially below what I'd expect for the position of the house and the updates.
So not a perfect solution. You'd expect at least they'd use google earth pics!

[csb (Craig)]

I write this for anyone else considering selling house for the first time

As casstony stated, the agents fee IS negotiable.

I got the agent to agree to charging no marketing fee if house sells below a certain price. If above that price then marketing fee is charged incrementally up to max $1785.

(Note; the lower price is above my minimum.)

As I have said this agent charges a flat fee and with this fee structure he must work a bit harder.

Thanks for the prompt casstony

[casstony]

Glad it worked out for you Craig.
The fact that house prices are double what they should be is a strong position from which to negotiate the agent's percentage downwards.

Over the long term house prices roughly vary with inflation (prices have risen much faster than inflation in the last couple of decades) and median house prices should be around 3-4x average income.

In future either house prices will crash or high inflation will be used to devalue our currency, bringing prices back in line with long term measures. A crash will hurt borrowers while inflation will hurt savers. Such an out of balance situation should never have been allowed to happen and it's been promoted by bankers and politicians (note those ever increasing fat bank profits).

[csb (Craig)]

Yep, politicians! The initial surge in house prices was due to John Howard bringing in the $7000 first home buyers grant.