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Advice For Choosing The Right Realtor To Sell A Property

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For the right price, everything is for sale. So when my Realtor friend pitched to put my home on the market a couple years ago given the lack of inventory, low interest rates, pent-up demand, and robust labor market, I said, “Sure why not.”

I have a single family home in San Francisco’s north end that might very well be suitable for a young family. It’s one of those modest looking art deco style homes that would be considered a townhouse in any other part of the country.

I told my Realtor that if I don’t get a certain stretch amount, I’m not selling, and he agreed. It was important to manage his expectations since he’s the one spending all the time staging, marketing, and showing the place.

Despite real estate selling commission fees still averaging 5%-6%, having a good Realtor can really be the difference between getting top dollar or getting “stalefished.” If you’re buying a home, a top Realtor will likely have the inside scoop and give you first dips before others so you can prevent a bidding war.

DISAPPOINTING REAL ESTATE AGENT EXPERIENCE

Unfortunately, my Realtor turned out to be a dud. My judgement of his expertise in selling homes was clouded because he was my friend. Here’s a list of things that happened to make me question his professionalism.

* Showed up dirty. I was shocked when my Realtor strolled up to my house five minutes before a private showing in sweaty tennis clothes right after a match. We’re talking a sweat ring on his chest and under his arms, shorts, and sneakers. Maybe his clothes would have been appropriate if he had just played tennis with the prospective buyers, but this was absolutely not the case. I e-mailed him after the showing insisting he keep a full change of clothes in one of my bedroom closets if he planned to continue playing tennis throughout the day during the showings.

* Didn’t listen. My Realtor pushed me to do an open house, and I told him “no” twice. Open houses open yourself up to nosy neighbors and potential robbers. Meanwhile, a report from the National Association of Realtors themselves said that only 2% of transactions ever come from open houses. Open houses are great for the listing agent to find prospective clients, which is what I thought he was most interested in doing. Although, in a hot property market hosting two Sunday open houses and setting an offers due deadline absolutely helps because it creates an incredible sense of urgency. If you’re a seller, it’s important to emotionally move on and I hadn’t.

* False assumptions.  After saying that I wouldn’t have to pay anything out of pocket, he springs a $440 pest inspection fee I have to pay for the disclosure packet. I’m all for a thorough disclosure packet, however, if you knew there would be a pest inspection fee required, then say so up front. Paying a 5% commission on a property is already quite egregious in this internet age. You’d think the commissions alone would cover the costs.

* Not in my corner. Here’s the real kick in the pants. I asked him whether I could join his 4.5 USTA league team and instead of enthusiastically saying “yes,” he told me “it would be hard because some of the teammates have been members for a long time.” I was expecting him to at least say he’d contact the captain to try and get me on the team. I don’t want a Realtor who isn’t 100% in my corner to earn a five or six figure commission off me. The great comeuppance is that my doubles partner and I faced him and his doubles partner at his club and took them down several weeks later.

WHAT TO LOOK FOR IN A REAL ESTATE AGENT

After 29 days on the market in the summer of 2012, I took my home off the Multiple Listing Service. I purposefully priced the home about 5%-7% above the market because I really didn’t want to move. But my Realtor was insistent the home would sell and he was desperate to get the listing. Thank goodness my Realtor was so bad because the real estate market has seemingly gone ballistic since (See: $1.405 million over asking to $3.4 million for a 2/2.5, 1,550 sqft, single family home in Pac Heights)

Here’s my advice for those looking to choose the right Realtor to sell (or buy) a home:

* Go with a Top Producer.  Seniority counts a great deal in the real estate game. It’s important to go with a “top producer” because the top 20% of Realtors move at least 80% of all the homes in any given area. Top producers are way more connected than your average Realtor. They will often know of listings before they hit the market and know of final sales prices before the official close of escrow to allow for better bidding and arbitrage. For sellers, they have a huge network to send out feelers for your property as well. My Realtor was not a top producer and couldn’t even get access to the top producer online network.

* Ask when was the last time they sold a home. If your Realtor hasn’t sold a home within the past six months, alarm bells should be going off. The Realtor should have a consistent flow of homes for sale, ideally in your price range or higher. The last property my Realtor sold was his own, because he could no longer pay the mortgage! He did a short-sale on his own condo, and I’m sure he’s kicking himself now for selling. I was too embarrassed to ask more about his home selling experience since he was my friend. I just felt very empathetic and wanted to help him out, which is bad for business.

* Does s/he have a web presence? If your Realtor doesn’t have a hisname.com website in this day and age where 80% of properties are found on-line, then you should be leery. The website should have basic info such as her bio, her previous transactions, thoughts on the market, some pretty graphs, and so forth. The website should also serve as her resume for the list of properties she’d sold or acted as the buyer’s representative.

* Interview your Realtor to ascertain intelligence, charisma, and professionalism. Realtors often get a bad rap in the media because of sayings such as, “It’s always a good time to buy or sell your home.” There isn’t much of a hurdle to become a Realtor and the commission level is frustratingly high. If you don’t find your prospective Realtor charming, neither will anybody else. It’s important to see if your Realtor can come up with a coherent thesis as to why he thinks XYZ about the direction of the housing market. Ask him about pockets of strengths and weaknesses in local housing market, as well as the risks. Ask about various real estate tax strategies or housing credits. Your Realtor should also present to you a comprehensive game plan for marketing and selling your home.

* Does your Realtor have integrity? One of the things I highly respect about my Realtor is his integrity. I asked him whether I should disclose a minuscule leak in the ceiling that I fixed a year ago and he said, “Absolutely.” I asked him whether I should turn on the portable air-filter in one room to help drown out some street noise, and he said best to leave it off to be completely upfront. Good integrity goes a long way because it minimizes the risk of negative surprises.

* Can you feel the hustle? When you wake up in the morning, will he have already sent you updates because he was working the night before? Will he create a Google Docs spreadsheet to track all the prospective buyers who have come through and shared the file with you Has he suggested you go with him to see competitive properties on the market to make sure you guys are in the ball park? You need to see and hear his hustle. You don’t want him strolling to your house in his shorts and a t-shirt because he had a practice match beforehand.

REAL ESTATE COMMISSION RATES SHOULD COME DOWN

The oligopoly priced 5%-6% commission fee is egregiously expensive, especially if you are selling in cities such as San Francisco and New York. Why does it cost $100,000 in commissions to sell a $2 million dollar house, for example? I can maybe understand a $10,000 commission on a $200,000 house, but it doesn’t take 10X more work to sell a $2 million dollar house. In fact, it might take less work selling a $2 million house because it’s probably much more impressive.

The reason for such a high commission structure despite internet companies such as Zillow, Trulia, and Redfin making it extremely easy for any buyer or seller to find or market a property is due to how the system works. Half of the 5% commission is used to pay the buyer’s agent for bringing the client. Some agents will literally not show their clients a particular house that fits their needs if the commission is too low. Meanwhile, the other half of the commission is generally split in half again to the brokerage house e.g. Coldwell Banker, Zephyr, Remax, etc.

The realty is that the selling agent might only get 1.25%-1.5% at the end of the transaction. Paying a 5% commission makes me ill, but I do feel I’m getting better “value” that the fee is split and incentivizing both parties to make something happen. Don’t feel their commissions are fixed, either. Both sides are definitely willing to negotiate down their commissions if the choice is between walking away, and making a transaction happen.

If real estate commissions come down, I strongly believe volume will increase, helping sellers, buyers, and Realtors who are starving for listings.

STRESS BE GONE

Even if you are stuck with a dud of a Realtor, know that it is very hard to screw up a sale if you’ve priced your property correctly. I did not, so I failed. Selling a home is extremely stressful, much more so than buying a home in my opinion. An experienced Realtor can help make your selling process as smooth as possible. And if you have the guts to list and market one of your most valuable assets yourself, go for it. Just remember that you will still have to pay at least a 2% commission to a Realtor who brings you a buyer. But 2% sure sounds cheaper than 5%.

Real Estate vs. Realtor vs. Broker

  • Real estate agent: Anyone who earns a real estate license can be called a real estate agent, whether that license is as a sales professional, an associate broker or a broker. State requirements vary, but in all states you must take a minimum number of classes and pass a test to earn your license.
  • REALTOR®: A real estate agent who is a member of the National Association of REALTORS®, which means that he or she must uphold the standards of the association and its code of ethics.
  • Real estate broker: A person who has taken education beyond the agent level as required by state laws and has passed a broker’s license exam. Brokers can work alone or they can hire agents to work for them.

 

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Financial Samurai

Sam is the former Managing Editor of the Daily Capital blog. He worked in finance from 1999-2012 before deciding to focus full-time on his online endeavors - FinancialSamurai.com and the Yakezie Network. Sam is an avid tennis fan who loves to travel. He received his BA from William & Mary and his MBA from UC Berkeley.

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67 comments

  1. BARBARA FRIEDBERG

    Sam, It pays to spend some time getting a top agent in the beginning. Having decades of real estate experience, I agree that the correct pricing is foremost, but a top realtor makes the entire process quicker and more expedient.

    Reply
  2. Steve

    Did you really say you are upset because your realtor didn’t get you on his tennis team? And that’s why he’s a bad realtor? Sounds pretty lame…
    What about things like: 1) knowledge of state, local and federal tax credits, deductions, loan and grant programs? Colorado has some fantastic tax CREDITS that 90% of realtors and mortgage lenders I’ve talked to don’t even know about 2) Asking questions like who will pay to clean my home if you’re selling and/or will you hire a professional stager to tell me how to stage it? Some realtors make you pay, while others will pay for it themselves 3) I’ve heard from more than one realtor “going with a top producer” means they often try and sell your home for less than market value just to move it quickly 4) And lastly “the realtor should have a web presence with… some pretty graphs” Really?
    It sounds like you’re just looking at a lot of surface stuff, which, while important, ignores a lot of the hardcore questions that would save you potentially tens of thousands of dollars…

    Reply
    • Financial Samurai

      What’s lame is not having someone 100% in your corner. If someone isn’t in your corner, and you’re going to fork over over $50,000 in commissions, that person is out.

      At the end of the day, the Realtor is providing a service. This is a service and relationship business. Do share with us your home selling and buying experience too. Everyone’s is different.

      Reply
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  4. OWNit Conveyancing

    Great article and very helpful for those in search of a great realtor. Realtors offer the same steps and processes. What makes one stand out is the level of service extended to clients. Savvy realtors will make the whole process smooth giving a buyer or seller a stress free experience.

    Reply
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    This post is like about me. I can’t decide who will best fit my needs.

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  6. Ray White Property Management Bunbury

    Agents are supposed to make our lives easier while selling our home. So we should hire the right one. Thank you for sharing your experience and insights.

    Reply
  7. Focus Property Management

    Very good advice! One way of ensuring that you’re choosing an agent/realtor who won’t give you headaches in the long run is their website. Check what guarantees they have for service satisfaction.

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  8. Fountain Property Group

    Excellent advice on choosing a great agent. Great agents make buying/selling a property a positive experience for the client.

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  9. Position One Property

    Sorry to hear about your not-so-good experience with your realtor friend. I’m glad though you shared this experience so others can rightly choose a realtor that will give them total satisfaction. And you definitely have given readers a good heads up.

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  10. WA Strata Management

    Nice one. Whether you’re buying or selling a home, the experience will prove to be stressful — if and if you hire the wrong agent.

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  13. Reva

    Thanks for the heads up and for sharing your experience, Choosing a right real estate agent is hard and stressful specially when you are a first timer to sell a house, always choose those expert and honest agent.

    Reply
  14. sam wilkins

    It makes sense that hiring the top producer could bring good results. I’m sure that with their extra knowledge and skills, getting your property sold would be way easier. My husband and I have some property we would like to sell, so when we look for a real estate agent I will choose the top producer for the best results.

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  16. Bob Lowe

    Thanks for the post. I agree that if you want results you should not waste time with low producing realtors. I think you need to find the top producer that will give you the result you need. I think that you will pay more for them, but you will most likely get more from them.

    Reply
  17. Bob Lowe

    Thanks for the post. I like the idea to go with the top producer. Like you said, the top 20% or realtors move at least 80% of the homes in any given area. I think that is pretty impressive. I think if you really want to sell your home as well as get the best price for it, choosing the top realtors can really help with that.

    Reply
  18. Lillian Schaeffer

    These are some great tips, and I appreciate your advice to interview your realtor so you can judge their character. My husband and I are going to be selling our home at the beginning of next year, so we need to find good professional help to get that done. We’ll definitely interview a few realtors so we can see how well they communicate and things like that. Thanks for the great post!

    Reply
  19. judy wilson

    I need to rely on a good realtor when finding the right home for me to live in, so I should listen to your tips for what I should look for in an agent. Asking about their last experience with selling a home seems like a good way for me to determine how active they are with their client base and how their selling experience usually goes. I would like a good experience with buying my first home, so I should use this information to find the right agent that can facilitate that.

    Reply
  20. Jeff

    Excellent advice! Always get a good realtor to help you out.

    Reply
  21. Olivia Nelson

    I like your advice on looking for the web presence of a realtor. I would imagine that if 80% of properties are found online you would want to find a realtor that will be able to navigate the internet. My husband and I are looking for a new home so when we go to hire a real estate agent we should find one that has a solid online presence.

    Reply
  22. Kate Hansen

    I think hiring a realtor to help me sell my house will make the whole process quicker and leave me less stressed. I like how you point out that you should ask your realtor how long it has been since they sold a home. If they haven’t sold a home in a while, that might be a good sign that they are a little rusty and you should look for another one. Thanks for your tips!

    Reply
  23. Shad Morris

    A friend of mine is new to selling a house, and was thinking about hiring a realtor to help him out. I never knew that you should look and see when the last time they sold a house was. It would be nice to see what house it was, and how long ago it happened.

    Reply
  24. Johnny McCarron

    I really like your advice to ask about the last time they sold a home. You really want to be sure that you are getting someone with not just experience, but recent, good experience. Otherwise, you might wind up with something that isn’t quite as good as you could have possibly had. Do you have any other tips about choosing a realtor? I’m thinking about getting a home soon, and I want to make sure I choose the right person for the job.

    Reply
  25. Sarah Smith

    My husband and I are thinking about buying our first home. Thanks for the information about how you should get a realtor that has sold a house recently and has a consistent flow of houses that they deal with. Another thing to consider is to get a realtor to help you that you like and get along with, so as to make communication easier.

    Reply
  26. Olivia Nelson

    I like your idea on asking a realtor the last time they sold a home to see how proficient they are. I would imagine that if they have sold one or more homes in the last six months that would be a good sign that they know what they are doing. My husband and I are moving because of his job so when it comes to buying a new home we’ll have to find a realtor that makes a lot of sales to represent us.

    Reply
  27. Olivia Nelson

    I like your idea on asking when the last time a realtor has sold a home. I would imagine that finding someone who has sold a home in the last six months would probably be ideal. My husband and I are looking to sell our house so we’ll have to find someone who has sold one recently to help us out.

    Reply
  28. Dennis Sanchez

    My mother will be moving soon and I’d really love her to find a real estate agent to help her through the process. You mentioned that you should check to see if they have a web presence, as it is a good way to see a lot of their information immediately, and what their resume looks like. I’ll have to search online for a real estate agent that can help my mother through this sometimes complicated process.

    Reply
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    My family is going to buy a home in the next week. It’s my luck to came across this post and it helped me to know the real estate trends and how to choose a good realtor. Thanks for sharing.

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  33. Ivy Baker

    This is some really good information about real estate and how to choose one for your house hunt. I have been wanting to buy my first home for a while now. so, I should probably find a good realtor to help me. I liked what you suggested about seeing if they have a good presence on the web. That does seem like it would help a lot in the real estate market.

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  34. Kayla

    My parents want to sell their property. My aunt sent them this article to help them choose. She wants to emphasize the things that they need to remember about choosing the right realtor.

    Reply
  35. Cameron Bennett

    I like that you mention that a good realtor should have a consistent flow of homes for sale. It’s important to do good research into a prospective realtor because you need to make sure that you hire one that is trustworthy and has the right expertise. My husband and I will be moving soon and looking for a new house, so these are really helpful tips.

    Reply
  36. Alexandria Martinez

    My mother has been seriously looking into buying a new home from real estate listings and selling the old one. She believes in having a realtor for this process but needs some help finding one. I think it would be a good idea for her to look at the agent’s integrity and online presence.

    Reply
  37. Becca Holton

    I really like that idea of asking for both their strengths and weaknesses. They would seem more reliable to me if they were honest about where their weakness lies. It would also provide me with a better idea of whether I can hire the agent or not.

    Reply
  38. Jordan

    I’ve been wanting to get some help selling my home to make the process a little easier. I’m glad you talked about choosing a realtor to help with selling, and how you want someone with an online presence. I’m going to have to look for some good options and see if we can get our home sold!

    Reply
  39. Gloria Durst

    I agree that finding out how many homes a realtor has sold in the past would be good. This would tell you how productive they are as well. My cousin is looking for someone to help sell her home, so she’ll have to find someone with a good production record.

    Reply
  40. Bobby Saint

    I like that you provided some good tips on how to choose the right real estate agent to help you with selling your property such as asking when was the last he sold a home. This is important because you wanted to find out if the agent has the skills and if he is consistently able to close a deal. If the agent tells you that he has not sold a single one in the last six months, then this could be a red flag for you. You may also want to ask for references from friends and family. They may be able to recommend one whom they have worked with before and were very happy with the service. If I were to hire one, I would make sure to take this into account. Thanks.

    Reply
  41. Braden Bills

    I’m trying to get my home sold, but I’m not sure how to go about it. It makes sense that I would want to find a real estate agent that has good charisma! That way I know that I’ll be able to get along with them.

    Reply
  42. Larry Weaver

    Thanks for the tip to find a real estate agent that has sold a home within the past six months in order to find someone that can really help you in selling your home. I feel that it is time to move out from where I currently live and experience a new landscape of neighbors and environment by moving out. By finding someone that has a lot of experience in selling homes, I hope to be able to move to a new location quickly.

    Reply
  43. Braden Bills

    I want to get my home sold, but I’m not sure what to do for it. It makes sense that I would want to get a professional to help with that! I’ll be sure to choose one that does a good job at listening to me.

    Reply
  44. sell home

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  45. Jaque Christo

    Thank you for the advice for choosing the right realtor to sell a property. I like the idea to ask when they last sold a property. That way you know right away if it’s been awhile or if they are fresh off their most recent sale and ready for more.

    Reply
  46. Hannah Neilson

    I agree that you would want to find a realtor who has sold homes in the last six months. Finding someone who is experienced and who is active would help as well. My brother needs help selling his home, so he’ll have to find someone who is active in the market.

    Reply
  47. Kayla

    I didn’t know that’s important to know how many houses did the realtor already sold. My parents are planning to sell the house and buy a smaller one. My aunt suggested having a realtor to help them and shared this article with them.

    Reply
  48. Kyle Wayne

    I’m glad you talked about how a professional should have a consistent flow of homes for sale. My best friend is looking to move out of state with his wife so he’s looking to hire real estate agents to help them out. I think I will talk to him about finding a professional who is consistently selling.

    Reply
  49. Sam Solo

    I didn’t know that associate broker could receive real estate licenses. I have been thinking about what I want to do for work in the future and I am considering something with the housing market and flipping properties. From your information, it sounds like a very lucrative field and lands you some healthy commissions.

    Reply
  50. Earnest Watkins

    I really like your suggestion to go ahead an interview potential realtors to get an idea as to whether or not they’d be a good fit to sell your home. I like how you point out that this is also a good opportunity for an agent to give you a comprehensive plan of what they’ll do to sell your home. This would definitely help me feel more confident in my decision of who to hire to sell my home.

    Reply
  51. Ridley Fitzgerald

    It’s good to know how to find a real estate agent. It makes sense that we’d want to hire someone who is a “top producer,” like you said. We want to buy a home in the near future, so I’ll start looking right now.

    Reply
  52. Earnest Watkins

    I am looking at hiring a realtor to help me sell my home soon. I think you made a good point how it’s important to look and see what kind of online presence a realtor has before hiring them. I’ll definitely look into this first so as to ensure I hire a realtor that can effectively market my home online.

    Reply
  53. Bethany Birchridge

    I liked how you mentioned that a good realtor will have a web presence and a list of their previous transactions. My friend has been thinking about buying a home, but it’s such a scary process for her. I think it’s vital to choose a realtor who will simplify and educate clients.

    Reply
  54. Ridley Fitzgerald

    We want to sell our home soon, so this is great. I love how you said to find someone who has sold a home in the recent past. It’d be nice to know we’re getting someone who can produce results.

    Reply
  55. Marcus Coons

    It helped a lot when you mentioned how you should look for a good real estate agent that has a good online presence. I understand that doing some research can help you find the best professional that can help with your house selling project. Personally, I would also want to take the time to read online reviews and ratings in order to find the best real estate agent in my area.

    Reply
  56. Margaux Ford

    You make a good point in explaining the benefit of hiring a top producer when hiring a real estate agents for selling a house because they move at least 80% of all the homes in any given area. My husband and I will be relocating to another country in three months, and we’re planning on selling our home. It’s good you mentioned that top producers will often know of listings before they hit the market and know of final sales prices before the official close of escrow to allow for better bidding and arbitrage. We’ll look for a reputable top real estate agent to help us in selling our home. Thanks for the tips!

    Reply
  57. Gary Puntman

    I agree with what you said about how a realtor will help you sell your home smoothly. It will definitely cut back on a lot of stress. I’m sorry you ended up not pricing your home correctly. This can cost you a lot of money in some instances.

    Reply
  58. Juris Ainsworth

    It was great how you suggested making sure that the realtor that I will hire has a website as that will serve as their resume where I can find their experiences as well as the list of houses that they have sold. I will have to take note of this for when my parents decide to sell the home this year. It was good that I came across this article because we do not know the first thing about hiring a realtor. Thanks!

    Reply
  59. Tammy Houston

    Although you didn’t really explain, I still appreciated it when you said that it is a good idea to make sure that the realtor that we’re going to hire is someone who consistently sells a home that falls in the same bracket as mine. That made me more eager to do my research and get a real estate agent who is reliable and amazing. I am planning to sell my home soon and of course, I want someone who can ascertain to help me sell ASAP. Thanks for sharing!

    Reply
  60. Deb Pearl

    Thank you for all the tips on how to choose the right realtor to sell a property. My husband and I really want to sell our home and we would love to have some help. I really like how you mentioned that we should ask when the last time they sold a home was. It would be nice to know if they have sold any homes recently.

    Reply
  61. Marcus Coons

    Thanks for mentioning how you need to ask a real state agent about their online presence before choosing one. It is important to remember that doing some research can help you find the best agent that knows how to get you the type of house you want. I can see how anyone looking into this would also want to take the time to check with the BBB in order to find the best and most efficient one in your area.

    Reply
  62. Hannah Neilson

    You make a good point when you say that you want to find a realtor who is on time. It would be good to find someone who will show up on time would be really helpful. I’m looking for a realtor, so I’ll have to consider how punctual they are.

    Reply
  63. Lawrence

    Interesting article. thanks!!

    Reply
  64. James Anderson

    It’s good that you’ve mentioned that a good realtor should have a consistent flow of homes for sale. I want to have my property sold as soon as possible, but I don’t know whom should consult about this. I’ll make sure to get in a touch with a realtor that sells homes fast so that I can get money from my property.

    Reply
  65. Alexandria Martinez

    My mom was looking into getting real estate for sale and putting her home up for sale. She wants to make sure that she is getting the best help possible while looking. It is nice to know that a realtor can eliminate stress.

    Reply
  66. Marcus Coons

    I loved when you mentioned how the website of a real estate agent can act as their resume. It makes sense to think that understanding this can help you find the best agent that can get the job done right. Personally, I would also want to consider my options in order to know how to best list my house for the best price.

    Reply

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