Well, at least this is about how I'm going about choosing a realtor to sell my parents' home. I wonder how other realtors would do this. Actually, one of my first real estate blog posts was about how to choose a realtor. Of course, now that it's hitting a lot closer to home I need to get a lot more concrete. For instance, I quickly realized that I could borrow a technique used by corporations for vendor selection - the Request For Proposal (RFP). The nice thing about this approach is that I don't have to set up appointments and spend a lot of time listening to marketing BS. I can just put my questions out there and collect responses that I can review as I have time.
So the first thing I did was come up with a list of screening questions for listing agents and post them on the Web with some background information and a request that interested agents submit their responses via email. This eliminates any of the agents that still operate in the 20th century - especially since I'm remote and need to primarily correspond via email. Incidentally, I really don't need to meet any of these agents until I'm ready to pick one - just to make sure they don't come across as a used car salesman or a bored socialite.
Then I needed to figure out how to solicit responses - believe it or not, easier said than done. I finally decided to post a solicitation, along with a link to my RFP page, on a few real estate sites known to have realtors trolling for clients in their forums. Consumers often post questions on these sites and get 15 - 20 responses from realtors looking to pick up some easy business.
You can't make links active on these sites so the first filter is that a realtor has to know how to copy and paste a URL into their Web browser - pretty tricky stuff - for a 5 year old or the average realtor. Apparently, the whole process was either too intimidating or too difficult for most realtors because only a handful of realtors responded and most of them couldn't follow my directions - an immediate disqualification. They posted a generic response right on the forum. I only received two legitimate responses.
I needed to come up with a couple more candidates so I did get a referral from my sister-in-law (more on that later) and I went looking for real estate blogs in Dallas. Interestingly, I did find one blogger whose blog reminded me a lot of my own - he had a healthy cynicism about the real estate industry. Obviously this guy is brilliant so he gets an extra point.
What really matters in choosing a realtor
So I'm relisting my screening questions here with a little explanation of why I'm asking these questions.
- How long have you been a realtor? I really don't care if they've been a realtor for 2 years or 15 years but I do want to know if they've only been in the business for 3 months.
- Are you engaged in any occupation other than real estate? I will not work with a part time real estate agent. They just don't have the schedule flexibility that a listing requires.
- Tell me what has been going on in this area. Zillow makes it look like NOTHING has sold. Can that be true? I just want to make sure they know how to analyze data and I do need an answer to this question.
- What is the typical co-op commission in Dallas? I need this as a baseline and to understand how the commission will be split. I do not want the co-op cut.
- Assuming a sales price between $500K and 600K what would the total commission be and how much of that would be for the co-op commission? Cost does matter and, again, I don't want to cut the co-op commission.
- How would we handle the commission if an unrepresented buyer submitted an offer that we accepted? I'm assuming in this case that all you do for this buyer is fill in the contract. Some of my smarter listing prospects ask this question. This could be a really long discussion but in a nut shell if there is no co-operating broker why do I need to pay the co-op commission? Also, I don't want to create a conflict of interest.
- Do you charge any other fees?
- What are your thoughts on dual agency? I won't rule out dual agency but it's a really tricky situation.
- Do you hold earnest money?
- Who takes your photographs? I want to make sure I get professional photographs.
- Please provide a link to a listing that demonstrates the quality of the photographs that you use. Just making sure.
- Will the listing have photographs as soon as it goes live? Some realtors will initially activate a listing without photos. This is a disaster. Most buyers will look at the listing within 24 hours of discovering it and if there are no photos they may skip over it and never come back.
- What marketing vehicles will you be using? This is probably the most important question. A realtor's reputation and promises aren't really worth that much. What really matters is what they are going to do for you.
- What Internet/ MLS statistics can you provide me on a regular basis that will demonstrate how the market is reacting to the listing? Another key question and part of the "what are you going to do for me?" issue.
- How will you keep me apprised of the level of showing activity and the response from those showings? Ditto.
- How will you keep me apprised of the current state of the local market? Ditto again.
- The house will be vacant. Will you be attending all showings or will you be using a lockbox? A good realtor will attend every showing in order to sell the home's features and obtain real time feedback. In addition, I have security concerns.
- How will you be handling conflicts between showing requests and your schedule? This is a key issue. I don't know how many times I can't get my buyers into a property because the listing agent is not available. I don't want to lose any buyers.
What doesn't matter in choosing a realtor
The criteria that is not on my list (some of which was suggested by my wife and parents) is every bit as telling as what is on the list. You will note that I am not the least bit interested in:
- How big and great their brokerage is and how they "have buyers". This is all BS.
- Whether or not an agent is a "top producer". As I've written before, not only is this irrelevant but it could be a detriment. A lot of these folks are so busy that they won't give you the time of day once they get the listing.
- How well an agent "knows the area". They need to be able to drive there on short notice and they need to be able to put together an analysis of the market but I really don't care if they've ever sold there or not. The marketing tools for this area will be the same as the marketing tools used in any other area of Dallas.
- How long an agent's listings typically take to sell, what percent sell, and their sale price to list price ratio. All of these statistics are a total crapshoot that depends upon what deck of cards the agent gets dealt. Besides, it's easy for an agent to lie about these stats.
- Existing relationships. Although I am accepting a submission from a friend of my sister-in-law the fact that they know each other carries no weight in the final decision. A listing is not a gift to be handed out.