For home sellers, there are a series of important questions that should be answered in the process of hiring a real estate broker.
This video discusses 3 questions I was recentely asked that are a good example of what NOT to do.
Question #1: What is your commission rate?Commission rates and costs are very important, of course. But they're not the most important. If selling at the lowest cost is the highest priority, then there are brokerages who'll charge as little as $500 for it. For 99.999% of sellers, however, the most important issue is the amount of money they'll be receiving after everything is done and finish; these are the "net proceeds from sale." A far better question: What are you going to do differently than anyone else we can talk to, to get us the highest net proceeds as possible???
Question #2: At what price will the house sell?This is literally impossible to determine and anyone that gives you a number (including Zillow!) is just making stuff up and guessing. Agents will still do this to (1) give a high number to try to "outbid" another agent (2) give a low number to ensure a "sold in X days" marketing piece or (3) give a low number to multiple bids to ensure a "sold $X above asking price." A far better question: What is your process for helping a seller to determine the asking price???
Question #3: Can we start showing potential buyers right away?This is actually a good question if the solitary and urgent goal is to sell the house right away - like right now, this afternoon. Otherwise and especially if maximizing net proceeds is important, it's a terrible idea. There are investors who will make an on-the-spot cash offer for any house today and will close within a few days - in return for a significant haircut on price. Letting buyers into a house before it's ready to be seen, is looking for this sort of deal. Far better: show the house when it's ready. In other words, the bride allows herself to be seen after all the hair and make up are done, the dress is perfectly ready, the lights and music are rolling, and the doors are opened. A far better question: What is your process for determining what it takes to put the house on the market, considering our timing and financial needs?
Unfortunately for me (and this potential home's sale potential), this seller was utterly uninterested in anything other than what she was certain was the right approach. So, not only did I not get hired, she ended up choosing a path that will end up resulting in $50,000 to $100,000 less in net proceeds. So not only is she going to leave money on the table, that will affect the next seller in the neighborhood, who'll have to confront a recent comp that's much lower than it had to be.
If you'd like to NOT make these kinds of mistakes, call or email me!
Michael Hausam is a licensed Real Estate Broker (BRE Agent #1319560) and Mortgage Loan Originator (NMLS # 1577195). He's been a resident of Orange County, CA since 1990, he funded his first mortgage loan in 1991, has had a B-1 general contractors license since 2005, and he has had his real estate license for over 21 years.