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Top 5 Signs it’s Time to Find a New Real Estate Agent

by Chris Feltus on May 2, 2014 · 12 comments

  
Realtor

Having a knowledgeable, hardworking real estate agent in your corner can make all the difference in your real estate business.

However, how can you be certain your agent is adding value to each transaction and ultimately your business?

If you are not yet involved in real estate investing, but are looking to buy or sell a home, take note these guidelines are still applicable.  If you find any of the following red flags…. you may need a new agent.

1. Communication

This should be a given, but unfortunately there are many agents these days that do not maintain active lines of communication. This is the number one complaint with sellers and investors alike, their agent does not keep in touch nor return calls in a reasonable amount of time.

By contrast, a good real estate agent will not only stay in touch, but provide you with up to date market activity for the area surrounding your subject property. Every new active that comes on the market can potentially be more competition for you. If your agent is not answering their calls, updating you on market conditions and only calls when they need to ask for a price reduction… you may need a new agent.

2. Determining What Your Property is Worth

Determining what the house is worth is one of the most critical pieces in the real estate puzzle. Many real estate agents will simply run a 2 mile radius around the subject property and take the average $ per square foot of homes in the area. As you are likely aware, this is a poor way to run comps and determine value. Running comps in this manner can potentially under value the house (resulting in you leaving money on the table), or over value it (longer days on market).

The best way to determine what a home is worth is to select comparable properties within the subject properties subdivision if possible. If you are a local investor, you will likely have a good feel for the area; however, if you are investing out of state you may need to rely on an agent.

Related: How to Find an Investor Friendly Realtor

3. The Listing

Be wary, some agents out there may try to exaggerate the value of your property in an attempt to secure the listing. It is not common, but it does happen. If the agent attempts to exaggerate the value of your house, that should set of a red flag in your mind. There is a difference between moderately increasing the price of the house to allow for negotiating room, and being completely unrealistic on the price such that the house sits on the market for 90 days plus. Like most things, if it sounds too good to be true, it probably is.

To put this into perspective I had a colleague who signed a listing agreement with a real estate agent for their latest rehab, the real estate agent promised he could sell the house for X amount, and a day after filling out the listing agreement the agent called back an asked if they could reduce the price. Talk about scummy. If  your agent just looks at you shaking their head saying “it’s a gorgeous home I don’t know why it’s not selling”….you may need a new agent.

4. Marketing

Beyond having knowledge of the local real estate market and contracts a good agent needs to know how to market your property. Is your agent going to provide HD videos or are they snapping blurry underexposed images with their iPhone? Will they syndicate your property online? How about a dedicated website for your house? Other smaller nuances are important as well such as keeping the brochure box filled or updating brochures to reflect price reductions. A good agent will do what is necessary to market the house.

If your agent is merely sticking a sign on the yard and posting it to the MLS and crossing their fingers… you may need a new agent.

5. Showing

Is your agent actively showing the house, or offering open houses at all to generate traffic? If not they should be. Showings are also a great source of feedback, and they should be forwarding this advice to you.  For example, after a showing the house and probing potential buyers your agent finds the house is overpriced, they should be relaying that information to you.

In Conclusion

If you are going to sleep at night wondering why your agent is getting paid a chunk of your equity to do nothing but put a sign in the yard, take lousy pictures and never update you… you may need a new agent.

RelatedThe Real Estate Agent’s Ultimate Guide to Working with Investors

That wraps it up, have you guys had any encounters with lousy agents? On the other side of the coin what sorts of things have good real estate agents done for you and your business that adds value?

Be sure to discuss it in the comments down below.

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{ 12 comments… read them below or add one }

Thai May 2, 2014 at 7:23 pm

Chris,

What is a typical length of a listing contract? 90 days? Should a seller be always targeting a 30 day listing period? That way, if you’re unhappy with the agent, you can move on to another one?

Reply

Chris Feltus May 5, 2014 at 10:35 am

Typical listing contract length will vary by area. In regards to a 30 day option on the contract, it allows you to terminate the listing at any point within that 30 day period if you are unhappy with your agents performance or see potential red flags. So yes, that is the main point, to make sure you are happy with your agent and not locked into a contract. Or you might have another horror story like Mimi Av in the comments below.

Reply

Eric May 3, 2014 at 6:26 am

As an investor, I used a RE agent several times before I received my own license. I found my own deals, I just used the RE agent as a facilitator. I required that he give me a part of his commission back.

If your agent is just a facilitator, they are not worth the entire commission. Get a new agent of they do not give you a rebate…

Reply

Chris Feltus May 5, 2014 at 10:37 am

Even better than having a Realtor act as a facilitator, is becoming licensed yourself. Especially if you are doing multiple properties a year. The cost savings adds up very quickly. Have you considered getting your license Eric?

Reply

Sharon Tzib May 3, 2014 at 9:14 am

I haven’t sold a house via the traditional method in a while, but my sister is in escrow on one now in Calif, and I was appalled at the way realtors approach listings these days. She had to hire one agent and her next one was pathetic too. They most definitely had the “throw it up on the MLS and plant a sign in the yard” mentality.

They refused to do open houses, one agent didn’t even own a flyer box and made my sister design her own, they didn’t use riders, refused to do any newspaper advertising, etc. etc. It was really sad. And oh, guess where the buyer that’s in escrow now came from? That’s right – an open house – after my sister insisted her second agent hold one.

Reply

Chris Feltus May 5, 2014 at 10:41 am

Sharon,
That really is an unfortunate story sorry to hear your sister had such a poor experience. Out of curiosity how many realtors did she interview before selecting one? Did the realtor use grandiose statements in order to secure the listing agreement, and ultimately not perform?

Open houses should be a staple if the seller wants them, an agent shouldn’t refuse to do them that’s just poor service (unless you are using a flat fee agent).

Reply

Sharon Tzib May 5, 2014 at 10:57 am

She interviewed two the first time. Unfortunately, she didn’t get referrals. The next time she got referrals from family & friends to three realtors, and still had issues with the one she chose. As a former realtor myself, I have had to literally hold her hand through this entire process to compel her realtors to do what they are supposed to, interpret contracts, explain the escrow process, etc. – all things neither of her realtors want to do. It’s a sad state of affairs imho.

Reply

Sharon Tzib May 3, 2014 at 9:15 am

I haven’t sold a house via the traditional method in a while, but my sister is in escrow on one now in Calif, and I was appalled at the way realtors approach listings these days. She had to fire one agent and her next one was pathetic too. They most definitely had the “throw it up on the MLS and plant a sign in the yard” mentality.

They refused to do open houses, one agent didn’t even own a flyer box and made my sister design her own, they didn’t use riders, refused to do any newspaper advertising, etc. etc. It was really sad. And oh, guess where the buyer that’s in escrow now came from? That’s right – an open house – after my sister insisted her second agent hold one.

Reply

Mimi Av May 5, 2014 at 5:49 am

When I placed my home on the market in 2006, my real estate agent had me sign a 6 month contract.
The house was on the market for 5 months and wasn’tg selling, so at that point I told him I wanted a new agent. Because of the agreement, he wasn’t willing to free me from the “contract:” Then I finally got the buyer through a friend..he still made the commission..never again!

Reply

Chris Feltus May 5, 2014 at 10:36 am

Unfortunately horror stories like this are not that uncommon Mimi, especially before the recession hit, there were quite a few mediocre agents out there that would get by on the bare minimum. Realtors can still be a great asset to your business but you need to make sure you select the right one. Thats why I wrote this blog post to give would be investors warning signs of what to look out for so stories like this never happen again.

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Sharon Tzib May 5, 2014 at 11:01 am

I can’t imagine having a client ask to be let out of their contract, especially if it is set to expire in a month anyway, and decline. This is so counter-productive to their business. Why would you want to work with someone who no longer wishes to work with you?

In the future, you can always go above the realtor’s head and to their broker. Most brokers are smart enough to know they should honor the client’s request. All listing agreements have clauses that state if someone purchases the home that found it during the listing agreement time frame, then the realtor still gets their commission.

Reply

George W May 5, 2014 at 9:04 pm

Great Article Chris!

Yes like some of the others this in this post I too have unfortunatly run into my fair share of realtors that do less than bare minimum to sell a house. Luckily this happened on my personal property and not one of my investments.

Keep up the great article, thanks again look forward to the next one.

Reply

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