Appointing the Right Selling Agent
When you are selling your property, one point becomes obvious very quickly, there is no shortage of agents willing to help you sell it. Most of the agents will be personable and persuasive.
Deciphering the strategic benefits each agency/agent offers is the key to employing the right agent for you.
Most people consciously or unconsciously employ an agent on the following criteria:
- Price – what does the agent believe the respective property is worth?
- Fee – what will the agent charge for their services and how does their value proposition ‘stack up’?
- Friend – the vendor has a mate in the game. It would be too uncomfortable to list with another firm, so the agent friend wins the listing Steven Bradbury style.
- Professional relationship – this comes down to trust. Trust in the agent’s competency and trust in their integrity. The lower the trust the more you will find yourself micromanaging the agent and vice versa.
- Referral – a friend, colleague or trusted advisor strongly recommends an agent they know, have had positive dealings with or have heard good feedback about.
- Recent results – how present is the firm in the marketplace and how impressive are their results, in number of sales, days on market and prices achieved?
- Sales process – the wholistic strategy proposed by the agent both in terms of maximising the selling price and minimising the risk to the vendor.
Anecdotally, most vendors would use the above criteria, in the order set out above, to select their selling agent. The above criteria is the correct criteria – in the wrong order though.
The pros and cons of each criterion
Sales process – once the fee has been agreed upon and the relationship has been formalised in the form of an agency agreement, the success of the campaign will come down to the effectiveness of the sales strategy and the agent’s negotiation ability.
To ensure you select the right agent for you, drilling down into the details of the proposed strategy with robust questioning is paramount.
A lot of vendors only ask the tough questions once the campaign is underway. The time to assert yourself is during the agent interview process. Are you completely aligned with the agent’s proposed sales campaign?
Knowing what the agent will do after they have listed your property is more important than knowing what they have done to win your listing.
Does the agent delegate the buyer work to assistants and junior agents or are they deeply involved in the entire process? If the campaign is unsuccessful, who wears the risk, the agent or the vendor?
Recent sales results – a selling proposal should be viewed as a corporate promise. Therefore, all proposals should be compared to results achieved. Do the results prices being achieved match the outcome promised in the selling proposal?
The greatest disconnect in recent times between agent proposal and market reality was the lack of ‘under the hammer’ action during the 2021 boom. The market was booming yet seller supply was low. Perfect conditions for a public auction if you ask most real estate agents.
Yet 40 to 50% of all sales occurred prior to the auction. Unbeknown to many buyers, even though the property carried an auction date, no auctioneer had been booked because the selling agent knew the listing wouldn’t last until auction day.
Professional relationship – if you have done good business with the selling agent in the past, it makes the task of employing them again much easier. A lot of people will return the listing/sale of their property back to the agent that sold it to them originally.
You may have previously sold with the agent in the past and were left delighted with the result. The major consideration in these circumstances is the role market conditions played in the result.
If you previously sold for a great price with the agent when the market conditions were really strong can the agent replicate the result and service if the market conditions are subdued?
The market conditions delivered the great price, yet you unconsciously associated/credited it with the agent.
The skillset required in a boom is completely different to the skillset required in a downturn.
The best agents can perform in all market conditions.
Referral – where a friend or colleague has had a successful selling experience that they are prepared to vouch for their agent, that is powerful. In such circumstances the agent has earned the right to pitch and present for your business. Never completely outsource the selection process based on a referral.
The agent still needs to earn and win the listing though.
Price quoted – just as buyers should be wary of ‘underquoting’ when shopping for a home, vendors should be equally wary of ‘overquoting’ when shopping for a selling agent. Admittedly it is counterintuitive to diminish the agent’s ‘price quote’ in the selection process, but you will make better decisions if you do.
Because vendors put so much focus on the agent’s price quote, it inadvertently encourages agents to overquote the selling price to win favour. We are all susceptible to messages we want to hear, ‘you look like you have lost weight’, ‘your children are so well behaved’ and ‘your house is worth $10 million if you auction it’.
The key when selling your property is not to put value on what the selling agent thinks and hopes it’s worth, the key is to ascertain what are buyers prepared and capable of paying for it in a buyer competitive process?
Fee – if you want a cheap agent, the good news is you won’t have any problem finding one. If you want a good cheap agent, you will spend a long time looking, without success.
Whilst real estate agents may not be the most revered professionals, hiring a cheap, therefore unskilled agent, will end badly.
There is a reason every low cost (high turnover) real estate agency from Purple Bricks to countless others have failed. Focus on the value you receive not the cost you pay and it will work out.
Friend – if you follow all of the above steps and it comes out neck and neck between a friend and a stranger, then okay, give the listing to your friend. You will be better off having followed the above criteria, in the suggested order though, and know that doing professional business with friends can be awkward. No one should be upset if you choose to keep business and friendship separate.
By Peter O’Malley
