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How to choose a real estate agent
Selling your home? Here are six expert tips for choosing a real estate agent.
Selling a home is a big undertaking – and a sizeable financial commitment. So choosing a highly skilled and trustworthy real-estate agent to guide you through the process, and hopefully secure the highest sale price, is essential. (Plus, these are seven of the biggest mistakes to avoid making when selling a house.)
The average cost of selling a home in a metropolitan area is around $18,000 to $25,000, according to David Ginnane, chief executive of Agent Select, an online agent comparison platform, and RACV business partner.
“Selling a home is one of the most complex, nerve-racking, stress-inducing and expensive transactions that people will do in their lives,” says David. “It is also a transaction that is steeped in a lack of trust and unfamiliarity.”
“You want to work with somebody you feel comfortable with and trust they have your best interests at heart,” says Leah Calnan, president of the Real Estate Institute of Victoria, the industry’s main member organisation.
So how do you find an agent you can trust, relate to and who will get the best price for your property? We asked David and Leah for their top tips.
Six tips for choosing a real estate agent
Check their credentials
All real-estate agents must be licensed to sell property in Australia, and you should ask to see those credentials. In Victoria, an agent must have a minimum 12 months’ experience in a licensed agency (under the supervision of a licensed agent) and must have completed an accredited course. Once you’ve verified that the agent is licensed, check that they’re a member of the relevant industry body – in Victoria it’s the REIV. Leah says REIV members receive up-to-date information about any new property-related legislation and anything specific to their area of expertise. REIV members can also access the latest training programs.
Compare their track record
Personal recommendations are great, but it’s best to make your search a little more scientific.
Agent Select allows you to identify the top-performing agents in your areas for your particular style of property and invite them to pitch for your listing. David explains that Agent Select uses property data from government and digital sales platforms, among other sources, to collate sales results. Its software algorithm filters through factors including sales and listing information, the type of property and number of days on the market to find your area’s highest-performing agents.
“An agent who is a rock star selling apartments might not be a rock star selling retail properties and vice versa,” says David. “But because our performance algorithm filters on a property type, we don’t see the usual suspects being thrown up to the top of the list time after time. There are some brilliant agents out there, but also some who aren’t that great, and a key part of what we do is filtering those out.”
Once the home owner receives the details of the highest-ranking agents they can either contact the agents directly to inspect and appraise their property, or Agent Select can make the appointments on their behalf. The agents will then upload their appraisal to the Agent Select website, detailing commission, suggested selling price, marketing costs, renovation recommendations and comparable sales in the area, and a report is generated for the vendor to help make a choice.
Trust your instincts
Finding the agent with the world’s greatest sales record is one thing, but developing a good relationship based on trust is key.
“Home owners will often go with people who they feel comfortable with,” says David. “Trust is absolutely critical.”
Ask an agent to guarantee that they will be your point of contact for future communication and ask them to commit to a schedule, such as a phone call every Monday.
David says a good agent is also, by definition, a good listener. “There is a different problem to solve for every home owner – they are upsizing, downsizing, relocating, they have a health issue, they’re buying an investment property or going through a separation,” he says. “If the agents we shortlist do not listen to the home owner’s circumstances, they can't provide a relevant service.”
Leah recommends attending open for inspections hosted by prospective agents as a great way of auditioning them. “See how they respond to you, if they follow up, make enquiries, and see what information they provide to you,” she says.
Look past commissions
Agents’ commissions are usually between 1.5 and 3 per cent in Victoria. But the lowest commission won’t always be the best option. An agent who offers a bargain-basement commission will likely have other clients paying a higher fee, which may command more of their time and attention. David says many savvy vendors negotiate a two-tier commission.
“For example, you could negotiate say 1.5 per cent up to $800,000 which might be the reserve, but nudge it up to 2.5 per cent for anything they get over that reserve amount. “They’ll be motivated to get a higher result for everyone.”
Similarly, don’t always go with the agent who puts the highest value on your property. Leah says inflated prices should raise a red flag. It’s important to do your own research on comparable sales through property sales websites and question if an agent is estimating a range wider than $50,000 to $100,000 clear of their rivals, she says.
Agent Select also offers a desktop valuation by a certified valuer, who will also do a drive-by inspection for a one-off fee of $150 plus GST.
Compare marketing costs
Marketing budgets can often be a way for agents on a low commission to reap back some earnings through inflated costs. You need an agent who will think carefully about your property and understands the best way to reach your property’s target sale audience without overspending.
“Most of the marketing is done through the big online platforms but it is important to understand that if you have a property on the Mornington Peninsula you might want to advertise in local papers in areas like Stonnington to attract buyers looking for a sea change,” says Leah.
Don't lock in local
There are many benefits to selecting an agent based in your local area. They will likely have a better sense of the market, the shifts in demographics and have developed relationships with potential buyers who have been on the hunt. But Leah says the advent of online auctions, virtual tours and digital marketing means you shouldn’t rule out those who live out of area.
“An agent doesn’t necessarily need to be located within close proximity to the property – they do need to understand the property, understand the suburb and the features of it but it is certainly not a necessity nowadays.
“Real estate is never going to lose that face-to-face, that personal component, but I think what COVID-19 has taught us is that there will be a blended approach to many parts of real estate moving forward.”
Selling your home?
RACV can help you navigate the journey. Visit: racv.com.au/selling-a-house