Whose Fault Is It When Agents Destroy A Deal
“To hell with these agents… they’re just so useless! Sometimes I think I’m better off selling my properties on my own – it’s a lot of work, but at least then I’ll be getting the profits I deserve!”
If you ever felt this way – I can’t blame you!
The agent selling your property can be the difference between a substantial profit, an average result, or even losing money.
After all, it doesn’t matter how well you manage the project… if your agent screws up the sale, your hard work might count for nothing.
On the other hand, a great agent will not only significantly increase your profits, but also free up your time – allowing you to focus on finding your next killer deal.
But let’s think about it for a second. If you hire a bad roofer and it ends up costing you an arm and a leg – who’s to blame? Not the roofer – but the investor who probably didn’t do a full due diligence and hired that roofer without proper recommendations.
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(By the way, if you need a vetted roofer, or any other tradesperson or property professional – why not check out the Property Investor’s Rolodex? It has all the contacts you’ll ever need to run a successful project – organised by state!)
So basically what I’m getting at is this – your success in selling your property comes down to one thing:
How Well Are You Evaluating Your Real Estate Agent Before Hiring Them?
Now, I could tell you stories from my own experience, but that would give you only one side of the story. To get the full scoop, I went to my good friend and real estate agent Justin Watt.
Justin is the chief executive officer and selling agent at Watt Realty, and has been in the real estate business since 1998. During his nearly 20-year career, he has observed changing trends and cycles in the property market and has worked with both novice and experienced property investors.
There aren’t many people better suited than Justin to answer the question below:
How Can Property Investors Be Wiser About Selecting An Agent To Sell The Product Of Their Hard Work?
According to Justin, one thing that almost every property investor has in common, regardless of the market conditions, is that they rarely put sufficient thought and effort into choosing a real estate agent to sell their property.
In my experience, 90-95 percent of people don’t give much thought to who they get to sell the house—and that’s where the money is made,” Justin says.
Selecting the right real estate agent is critical to a profitable, timely and low-stress sale, Justin adds. Here are a few tips from his experience that can help you maximise your profits by selecting the best real estate agent for your property:
1. Do The Work
When property investors consider doing a deal, they put in many hours of up-front work to make sure everything stacks up. From doing feasibility studies to consulting with industry experts to obtaining financing, it takes a huge amount of time and effort to figure out if a deal is going to work.
When compared to the time spent on deciding and preparing to buy a property, most property investors spend only a small fraction of that time preparing to market and sell the property—and that includes researching, interviewing and selecting a real estate agent.
Justin recommends that property investors should apply the same due diligence to selecting a real estate agent that they do to buying the property in the first place.
“You have to treat choosing a real estate agent the same way that you treat your feasibility, because the money is made at the end,” Justin says. “You do your feasibility and due diligence at the beginning, so why not do it at the end?”
2. Ask The Right Questions
When it’s time to sell a property, most property investors start by jumping on the Internet and googling “real estate agent in [local area].”
Based on those search results, the property investor will pick the top few agents and look at their websites to find out how many awards the agent has won or how many sales they have made in the past year.
If the property investor is especially motivated, he or she may visit an open house that an agent is holding, or look at the number of “for sale” signs the agent has around town.
Based on this limited initial research, Justin says that a property investor may line up four or five agents to interview. And during that interview, the property investors always ask the same three interview questions:
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- How much can you get for the property?
- How much commission are you going to charge?
- How much will it cost to market the property?
According to Justin, real estate agents usually give the same answers: they can get more for the property than their competitors, they will charge the lowest commission and they will market the property for free.
When you have five agents who are all doing about the same amount of sales volume, are all good agents and are all close when it comes to the fees they charge, you need to put them through their paces,” Justin says.
And Justin suggests that asking run-of-the-mill questions isn’t enough to lead you to the right agent.
Property investors should ask questions that get to the bottom of important issues, such as responsiveness, availability, agency support and marketing experience, including:
- How much support do you receive from your agency?
- How engaged are you with your clients?
- What is your experience selling this type of property?
- In your opinion, who is the target buyer for this property and how would you market to them?
- Do you typically work in this price range?
- How can I reach you and during what hours are you available?
- How do you prefer to communicate with clients?
- What makes you different from other agents?
Justin replies that he rarely gets asked insightful questions like: Why are you the best agent to sell my property?
Just because an agent’s costs are the lowest doesn’t mean they are the best person to sell the property,” Justin recommends.
And, he said the most dominant agent in the area, or the agent you like the most, isn’t necessarily the best, either.
“You don’t even have to like them; you just need to know that they function at a high level in the marketplace and get results,” he says.
3. Put Your “Buyer” Hat On
Justin says that a great way for property investors to do their due diligence when it comes to finding a selling agent is to put their “buyer” hat on.
He suggests calling the agency as a buyer to check out the type of service the office provides—and see how accessible and engaged the agent and the agency are with potential clients.
Ring up as a buyer, not a seller,” he recommends. “Send emails—and ask your mum to send emails—at all different times of the day.”
When posing as a buyer, Justin also suggests calling the agent on his or her mobile to see if they answer. If you need to leave a voicemail, make a note of how quickly calls are returned—if at all.
You can also get a sense of how often the agent is in the office, how quickly messages are passed along by the office staff and how up-to-speed the office staff are on the property listings and whereabouts of the agents.
This research will give you a good indication of how your agent and agency will respond to and treat your future buyers. Finding an agent who is responsive and accessible—and an agency that prioritizes buyer communication—will be critical to your selling success.
“Most buyers are only going to do phone tag a couple of times unless they are really motivated,” Justin says. “You need to find out how the engagement is with buyers.”
4. Do Things Differently
When it comes to selecting real estate agents, property investors are under doing it, Justin said.
Property investors sometimes think real estate agents are all the same—and some even think they can do it better,” Justin advises.
Some property investors may even dislike or feel apprehensive about real estate agents due to a bad personal experience—or what they’ve heard from others in the property game.
But before giving up on trying to find the right real estate agent and deciding to sell the property themselves, Justin recommends that property investors should try approaching real estate agent selection the same way as their feasibility study and due diligence.
For starters, they should remember all the hard work they did up front. Then, to make sure they get the most money out of the deal, they should choose their selling agent accordingly.
If you don’t put effort into finding the best person, you won’t make money,” he says. “The only person you have to blame when you make a poor agent choice is yourself.”
This blog post was based on a presentation given by Justin Watt in one of our Property Networking Group meetings and it’s available inside the Ultimate Property Hub.
If you want to have access to hundreds of hours of videos just like this one, where you will learn cutting edge strategies, how to spot a property boom in your area, structure yourself to avoid paying unnecessary taxes and much more, the Ultimate Property Hub is what you need.
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