How to Select a REALTOR®?
In Part One of this series, I discussed the advantages of using a REALTOR® to sell your home compared to trying it alone with the proverbial ‘For Sale by Owner’ sign. If you have decided to use a Real Estate sales professional to assist in the sale of your home, selecting that REALTOR® is an important part of the process and will be instrumental in achieving an expeditious and successful sale of your residence.
To start, your REALTOR® should be a licensed member of the local real estate board, the provincial real estate association and, finally, the Canadian Real Estate Association. The vast majority of all residential home sales are completed by licensed professionals.
In addition to the licensing aspect, what other points should you consider before hiring a REALTOR®? Think about the following before you make a hasty decision:
• Will your property be placed on the Multiple Listing Service (MLS), thereby giving you maximum exposure to all Buyers and Real Estate Companies in the area and across the country?
• Is the sales commission in keeping with local norms? If a higher commission rate is being charged, what additional service will be provided? On the other hand, if the commission rate is lower than the norm, what services are not provided?
• Is your residence located in an area in which the REALTOR® has sold homes before?
• Does the REALTOR® and his/her office have a toll-free number available 24 hours a day, 7 days a week?
• What type of administrative support is available to support your REALTOR® while he/she is actively trying to sell your house?
• Will your property be actively advertised on a quality and easily accessible Internet site?
• What is the marketing strategy proposed by the REALTOR®? i.e., frequency of media advertising, public open houses, internet availability, company advertising kiosks, flyers, and real estate agent open houses.
• What will the REALTOR® do to sell your home that is above and beyond what most other REALTORS® do as standard practice?
• What is the size of the company in terms of REALTORS® and market share? Most Real Estate companies try to sell their own listings first. Therefore, the more REALTORS® employed by the company, the greater the chance of it being sold quickly.
• Finally, and most importantly, what research has the REALTOR® done to establish the Market Value of your property?
As mentioned in the last article, a property that is not priced properly will usually cost the homeowner money. For example, if it is under-priced the owner will obviously lose money. Moreover, if it is overpriced it may also eventually sell below Market Value (MV). If your home is priced too high it may be on the market for a longer than normal period and, consequently, be viewed as a ‘problem’ home by Buyers who wonder why it hasn’t sold yet. Second, if your home does not sell at your price during prime time (i.e., spring) and the best time to sell comes and goes, you may be forced to wait for another up turn in the market. In the end, you might incur additional expenses or find yourself lowering the price to a lesser amount than if it had been priced properly to start. Regardless of the reason, if your home is initially overpriced, you run the risk of selling below Market Value or not selling your home at all.
So what research should your REALTOR® complete to establish Market Value? In most areas within Canada, this research is known as a Comparative Market Analysis (CMA) and it entails researching properties similar to yours that have recently sold, are currently on the market for sale, or were on the market for sale and have not sold. From this data, comparable properties are reviewed and adjustments in value are made. For example, if the house next door to your home just sold, and it is identical except that it has a single car garage, it could be used as a comparable property. Assuming you have a double car garage, after adjusting for the lower value of the neighbour’s single car garage, that property could be used to help establish the value of your home. Please keep in mind that this is a very simple example of what can be a complicated exercise. Also be aware that assessed value for property taxes is not necessarily accurate for establishing current MV.
Remember, regardless of the marketing strategy and how great the home and location may be, the most important factor for the majority of Buyers is the price. Therefore, ensure that the REALTORS® you interview complete a CMA that is available for your review. Be wary of the person who walks into your home for the first time and pulls a value out of the air. After all, given the money involved, pricing your home should not be a matter that is taken lightly. An accurate CMA will help you establish a realistic asking price for the Listing Agreement.
In conclusion, selecting the right REALTOR® is like selecting any other professional. Making a concerted effort to find someone who is knowledgeable and efficient will go a long way to ensuring your sale is handled in ways that will save you time, aggravation, and possibly money!
David Weir BA, CD is a Broker with Royal LePage ProAlliance Realty in Trenton. His sales in the Quinte area have ranked him in the Top 1% of all Royal LePage REALTORS® in Canada since 2005.