You're selling your house. Through the sales manager of a local realty firm, you hear about Lorraine. She's "hungry for your business," the manager says. Lorraine comes over with a thick loose-leaf book full of slick charts and starts flipping pages for you.
Your temptation is to make a quick decision and hire her. After all, she's forceful, engaging and talks a good game. But wait, real estate experts say. The decision on whom you hire to market your home can be crucial. Before you pick Lorraine, you should pose some key questions.
"Trust everybody, but cut the cards," counsels Norman D. Flynn, a past president of the National Assn. of Realtors.
With more than 750,000 real estate agents involved in the profession throughout the United States, most communities have an abundance of choices. Certainly, some agents have marketing skills superior to others.
Here are five questions to help you find the right agent:
1. What is your marketing plan for my particular property?
There's more to selling a home than putting it on the Multiple Listing Service.
Most properties call for a carefully orchestrated marketing program that covers newspaper ads and direct mail, at the minimum. The agent should also have a plan to tell other agents in your vicinity about your home--whether through mailings, phone calls or "brokers' opens" that bring other agents in to see the place. Often it's such networking that produces sales.
It's not enough for an agent to speak vaguely about a marketing plan. You need quantitative promises. (For example, the agent should tell you when and where your ads will run.)
And you need the marketing plan in writing, says Flynn, a real estate executive.
2. How often will you promise to call or write me with feedback?
A good agent should contact the homeowner at least once every week or two. He should not only call when sales activity is robust and encouraging, but also when prospects are few and their reactions are negative.
"It's equally important to call during periods when nothing is cooking as when there's a lot cooking," Flynn says. The absence of buyers could, for instance, signal that your house is priced too high and needs to be discounted.
3. Could I have a list of your satisfied clients as references?
Flynn suggests you ask for at least three to four customers whose homes the agent has sold. And these should be the owners of the same sort of property as yours. The fact is that many agents specialize--perhaps in new homes, high-end properties or condominiums.
"There are some agents who are very good at selling condos and others who wouldn't know how to sell a condo if it were the last stick and twig on the planet," Flynn says.
4. What is your track record for real estate sales?
In real estate--as much as any other field--a small percentage of sales people do most of the business.
David Knox, a home sales specialist who does seminars and videotapes, estimates that the top 8% of U.S. agents sell 90% of all homes.
Years of experience in the field is not always the best measure of success.
"You want to know about both tenure and production. If the agent has been in the field for one year and sold $2 million in property, that's good. But if he's been working for three years and sold $1 million a year, that's not real good," Knox says.
Besides dollar volume sold, another smart area of inquiry relates to the percentage of listings an agent sells before his listing agreement with the owner expires.
Nationwide, agents sell just 30% to 60% of their listings before they expire, Knox notes.
"You want an agent who sells 85% to 90% of his listings," he says.
There are other key standards of performance too. You might ask the agent what percentage of the asking price, on average, he has received for the homes he's sold during the last six- to 12-month period. And you can ask him the average number of days his listed homes stayed on the market before they sold.
Do these measures sound obscure? They shouldn't be for a sharp agent. A good one continually tracks his own work by computer and should be more impressed than angry when you ask for the numbers, Knox says.
5. Why should I pick you over all the other agents?
There are several wrong answers to this question, Flynn says.
The agent shouldn't reply by bad-mouthing the competition.
His chief claim shouldn't be that his commissions are cheap, since an agent with a higher commission could save you money by selling your house faster.
Nor should the agent contend he should be selected because he'll price your house higher than other agents you're considering.
Remember, it's the open market that will finally decide what your house fetches, not the listing price set for the property. Indeed, a house priced too high will often languish on the market.
The right answer to the question, "Why should I pick you?" is an articulate summary of the agent's past experience plus the marketing plan for your home.
Listen well, because your fortune and housing plans can be at stake in the choice of an agent, Flynn cautions.
"You should look at any candidate with a somewhat jaundiced eye," he says.