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.
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.
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.
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.
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.
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.
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.