Working with a real estate agent is something almost every home buyer and seller should do. But managing agents is a skill, because most of us aren’t used to having someone help with a major project (like a multi-hundred thousand real estate deal!)
Here are a few things to keep in mind as the deal progresses. Most of this article is directed towards sellers, but buyers should take note as well.
Managing Agents Means Knowing their Marketing Plan
The most successful real estate agents have a comprehensive marketing plan to help connect buyers and sellers. In fact, the best will spend hundreds of thousands of dollars a year, because they know that good marketing is critical to sell a home in the Information Age.
Before you hire an agent, ask for a detailed account of their marketing strategy. They may not give you the exact scripts, keywords, etc. that they’ll use, but they should be able to give you more than “I’ll list your house on the Multiple Listing Service and put a sign in your front yard.”
How do you know if their marketing plan works? Either you or your acquaintances would have heard of the agent before!
Holding onto Your House a Little Longer May Make Sense After All
Sellers agents will sometimes recommend they take they first offer given, assuming it’s reasonable. While that may make sense at times- for example, if the house has been on the market for months without a single bite- it can also be a huge mistake.
There’s a semi-famous Freakonomics study around sellers agents that found something interesting. The agent will often push their client to take the first offer so they can wrap up the deal and move onto other clients. But when those agents go to sell their own homes, they’ll often keep their house on the market for a while even after receiving the first offer, because they know there’s a good chance they’ll get a higher second offer later.
Is that to say you should never take the first offer? No- just keep in mind that if your house has only been on the market for a few days and you’ve already received a few offers, you may be able to hold out and get an even higher offer later-despite what your agent says.
Home Preparation Advice
Managing real estate agents is similar to managing employees. Because they work for you, some agents don’t always want to tell you the bad news. Instead, they’ll sugarcoat conversations, and hope that their marketing strategy will be good enough.
To make sure this doesn’t happen, ask specific questions when you do your home walkthrough. Carpet stains, paint colors, furniture, room layouts, etc. Your agent sees a lot more homes than you do, and can easily point out what will help or hurt your chances of selling the home. For example, while you may think that carpet stain “isn’t too bad and shows the house is lived in,” most buyers will be turned off.
Real Estate Agents Referrals Should Be Taken with a Grain of Salt
Most agents will be able to refer you to a home inspector, HVAC company to check out the furnaces, etc. But while you may be tempted to take them up on their offer, it’s best to do the research yourself.
Picture this scenario- you hire the inspector recommended by your agent. They come out and do (what you think) is a thorough inspection. It looks like everything is in pretty good condition, and there aren’t any major recommendations for repairs or fixes. You move forward on the deal and are happy in the house for a few months. Before you know it, it’s the hottest summer in years, and your air conditioner breaks down. HVAC companies are slammed of course, so you can’t get it repaired for weeks!
This might have been avoided if you did your own due diligence and research the inspector yourself, so that air conditioner issue would’ve been caught.
There is a lot more to managing agents, from staying in constant contact with them to being very clear with what you’re looking for in a home. At the end of the day, communication and doing some of your own research on the market and how to sell/buy a home will go a long way.