The successful sale of a home requires a listing agent who employs a strong team and a comprehensive marketing approach. The seller will rely upon the listing agent for market expertise, negotiation acumen, and reliable advice regarding various procedural and legal issues associated with the transaction. Without question, listing agents must be able to assume many roles.
Unlike working with a buyer agent, home sellers will generally select an agent and sign a binding contract to list their home. Before making this selection, the sellers should interview several listing agents to get a sense of what these agents have to offer and to understand all of the associated costs. As discussed in our last newsletter (see “Structuring Listing Agreements,” The DeLeon Insight, November 2015), it is very important that listing agreement include a comprehensive addendum that spells out all of the agent’s commitments with specificity. This addendum should include a detailed description of all home preparation and marketing that the agent will provide. Further, it should be signed by the listing agent’s managing broker, not just the agent. Keep in mind that the majority of real estate agents are merely independent contractors “associated” with a brokerage, not employees of that brokerage.
Although there are many important questions to ask your listing agent, this article will address eight that may have universal interest.
1. What is included in your marketing approach?
Virtually all marketing expenses are (or should be) borne by the listing agent. This may include expenses for brochures, newspaper ads, magazine ads (some agents include ads in foreign language newspapers), catering, photography, videography, and in some cases, TV commercials and radio ads. Sellers should ask for a comprehensive list of what will be included in the listing agent’s marketing approach—asking for a written schedule will eliminate misunderstandings. Similarly, sellers should ask their listing agents how they plan to effectively execute this advertising strategy and who will be involved in the process.
The DeLeon Team has created our Strategic Home Selling brochure, which lays out our entire approach in great detail. Please contact our office if you would like a copy. Additionally, we include a comprehensive addendum as part of every listing agreement.
2. How will you assist with repairs and home preparation?
Successful sellers often make repairs and renovations prior to listing their home for sale on the market. Home preparation can vary from repainting, replacing light fixtures, or refinishing floors to more significant projects such as bathroom renovations, installing new countertops, or landscaping. While some listing agents have a team that can help you coordinate this effort, other agents merely put you in contact with third-party contractors. Your listing agent should be able to list the steps the agent will take to help you prepare your home for the market.
The DeLeon Team has a dedicated design team, which includes interior designers, a licensed contractor, and handymen, to oversee the process.
3. Can you provide staging assistance?
Once the home is properly prepared, the sellers will have to make decisions regarding the staging of the house. If you elect to have your home staged, your listing agent may be able to help you coordinate staging or may refer you to a staging company. Nowadays, many of the best listing agents will pay for the home’s staging, including design, delivery, and removal of all staging items, as well as some period of furniture rental. This should be addressed in the listing agreement with your agent and included in the abovementioned addendum.
The DeLeon Team pays for the design, delivery, and removal of all staging, as well as the first 30 days of furniture rental.
4. What kind of experience do you have in selling local real estate?
Experience certainly helps agents in identifying the most effective strategies to achieve a high sales price. Generally, agents have access to all of their transaction records through the Multiple Listings Service. You may consider asking prospective agents to bring a list of all the local homes they have sold over the last three years. This list will provide significant insight into the amount of experience they have in selling real estate in or near your area.
The DeLeon Team is the number one real estate team in the United States. We sell more real estate than any other local real estate agent or team. Every June, the Wall Street Journal publishes the authoritative list of agent rankings, which is compiled by REAL Trends, Inc. For the complete list, see: http://www. realtrends.com/rankings/real-trends-1000- teams-by-volume15.
5. What are your statistics?
Your listing agent should also be able to provide transaction statistics. These statistics include average days on the market for listings, the average price per square foot, and the average list-price-to-sales-price ratio. Reviewing these statistics will provide great insight into an agent’s pricing strategy, the effectiveness of the agent’s marketing campaigns, and the agent’s general success with negotiating real estate transactions.
The DeLeon Team is very proud of our sales statistics. We are happy to provide unbiased, third-party stats showing our performance in your city. Additionally, we are happy to provide the stats for up to five additional agents or teams for comparison purposes.
6. Are there any conflicts of interest?
It may surprise some sellers to learn that the California Bureau of Real Estate permits the same individual to represent both the buyer and the seller on the same transaction. Many sellers find that this creates an untenable conflict of interest. You should ask prospective listing agents if they also represent the buyers or if they refer potential buyers to another agent to write up while retaining a significant portion of the commission. Also, consider including a prohibition on all “referral fees” paid to your agent. At a minimum, the agent should agree, in writing, to disclose any referral fees (generally these are not referred to as “kick-backs”) or other remuneration that the agent will get if any particular offer is the winning offer.
This is one of our greatest points of distinction. I handle all DeLeon Team listings, and I will never personally represent a buyer on one of our listings. Although other DeLeon Team buyer agents may represent buyers, we maintain a strict ethical wall between the buyer team and the listing team. Further, I am on salary and I receive no additional compensation based on which buyer gets the home.
7. How long is your contract term?
Sellers should consider the duration of the listing contract. Most sellers find it favorable to sign an agreement for a shorter term because they have the option to extend the contract if they are satisfied with the agent’s performance. Some sellers may find longer term listing agreements to be too binding because these contracts obligate the sellers to continue listing their home even if the agent has performed poorly.
Our listing agreements expire a mere 39 days after the home is listed on the MLS. We believe that it is wrong to hold a seller hostage by an agreement that is 90 or 180 days long.
8. What was your professional background before entering real estate sales?
Real estate agents come from all walks of life. Some agents were very successful in other professions and possess skills that are readily transferable. Other agents get into real estate sales because they are lured by the idea of easy money. There is a big difference.
I have two law degrees, a JD from Rutgers University School of Law, and an LLM in Taxation from NYU School of Law. I have extensive experience in real estate and tax law, and I currently teach Real Estate Economics and Taxation at Menlo College. Additionally, my full-time in-house listing team includes interior designers, a licensed contractor, handymen, graphic artists, a copywriter, and an online marketing manager. Further, we have a very robust team that handles our international marketing efforts.
Sellers will find that asking very specific and detailed questions will greatly enhance their ability to understand the agent’s listing approach. Additionally, when a client asks potential agents for this information prior to signing a listing agreement, the sense of competition will often encourage the agents to offer a more favorable deal for the seller.