Selecting a realtor can seem like an overwhelming task. Currently, there are over 21,000 realtors in the Bay Area. How do you know which one is best for you? First, the types of questions to ask your realtor will somewhat depend on if you are on the listing side or buying side. Below are 5 key areas to cover when interviewing a realtor to list your home.
LISTING AGENT INTERVIEW
(1) Go Local. First, make sure that the overwhelming majority of your prospective agentâ€™s transactions are done locally, i.e. mid-peninsula (It would help if he or she specialized only in a few cities, San Carlos being one of them). I would never use a realtor who was not a local realtor. Local realtors know the market better, have better connections and are much more likely to sell your home at a price and with terms that are agreeable to you. When prospective buyersâ€™ agents see a phone number starting with (916) or (510), for example, they know that if their clients were to put an offer on that particular home, there is a higher likelihood that the transaction is going to be very difficult. Agents from out of the area will be unfamiliar with our local forms and disclosure requirements. Additionally, their firm will not have a proven and trusted track record with San Carlos sales. In other words, if you list your home with an out of area agent, you may risk losing a percentage of traffic through your home. Often times, out of area agents are family members or close friends of the sellers conducting their services as a reduced cost. The better way to handle this situation is for sellers to have their out of area agent refer the sale to a local agent who will agree to compensate that out of area agent a referral fee. Most referral fees are about 25% of the total list commission.
(2) Explanation of CMA. A CMA or Current Market Analysis is what a realtor will use to help decide an offer price for your home. During your interview the realtor should be able to give you a comprehensive CMA for your home. Handing you a bunch of comparables at the interview is is NOT a CMA. I would view this as the sign of a lazy realtor. If he or she is this lazy prior to the home going on the market, you can imagine what you will get once your home actually gets to market. A solid CMA examines price per square foot, comparables, area trends, inventory, pending sales, overall market conditions and characteristics unique to your property. The CMA should be succinct and ultimately arrive at a limited price range for your home.
(3) Services. Superior realtors will come to an interview with their CMA, Referral Contacts, and an Offer of Services nicely packaged in an interview binder for your review. Just what types of services should you demand for your realtor aside from the normal MLS listing, open houses and flyers? In short, you should be very demanding. In San Carlos the majority of homes are selling for over a million dollars and your listing agent is most likely charging you close to 6% (split with the buyerâ€™s agent) for the sale. You should expect most, if not all, of the services to be compensated by your agent. I always spell out all of the services I will pay for out of my own pocket, on paper, as part of my listing presentation so that there is no ambiguity over who is paying for what. For instance I always pay for most of the staging (up to a certain length of time) or a home rearrangement if staging is not necessary, a house cleaning, yard clean up, self-catered open houses, inspection reports, high-end flyers, photography, virtual tours and more.
(4) Negotiating the Commission. Most homes in San Carlos have a list commission of between 5-6%. This commission is then split with the buyerâ€™s agent. While commissions are negotiable, most very good San Carlos agents will not go below 5%, because they are worth it. If you were to interview a number of agents you would inevitably get one agent who would cut the list commission down to 4% or possibly even lower. Beware of these discount agents. Even though many of them advertise themselves as â€œfull serviceâ€ you are likely to get â€œdiscounted serviceâ€. My advice is to hire a top San Carlos agent and agree to the 5-6% commission. They should more than make up the difference of the discount agentâ€™s prospective commission. The top San Carlos agentâ€™s knowledge, local connections and work ethic will justify their commission.
(5) Experience. Always ask the prospective agent for a list of their last 12 monthâ€™s production. Again, a good agent will have this list prepared and will have it as part of their listing presentation to you at the interview. Ask for a list of references of sellers who have listed their home with your prospective agent within the last 12 months. Call the references.