Dealing with a listing agent, either as a vendor selling a property, or as a prospective buyer, keen to purchase, can be challenging and stressful.
So how do you find out who the real estate agent is working for, and how can you protect your interests in the property?
In this article, we will look at your options as a vendor selling your home and also what you can do as a prospective purchaser.
What you may not know is not all real estate agents are honest some go rogue, and work outside the rules at their client’s expense.
Over the years, agents have been reported to authorities, for all sorts of dodgy activity. The most common include: encouraging vendors to sell their property for less than market value and persuading motivated buyers to pay more for a property than it’s worth.
When you’re the vendor who has engaged the Agent, most likely you believe you’ve chosen well, and your agent is working for you not a prospective purchaser so it would be a shock to learn otherwise.
In most situations, this is the way it works, however not always and too often the agent’s personal agenda gets in the way of doing the right thing and playing the rules.
Property market conditions can and do change the motivations of all parties involved in property sales.
Therefore as the Vendor, you need to make sure you have gone the extra mile in your agent selection process. Where the market is in the property cycle does impact on the well-being of the agents and their actions accordingly.
In a buoyant property market, sales prices are rising, and there are lots of listings, therefore even the less successful agents can make a living during this phase. This usually means they’re not desperate for the sales commission, so arguably you can probably escape a bad deal being done during the boom.
In a slump, there are generally fewer property listings as property owners hold until the market turns and they can get a better price. Less successful agents can go weeks if not months with a sale, and it’s during the tough times that desperation can make some people take extraordinary risks. Vendors need to know markets can change quickly, so it’s your job to choose your agent and their agency wisely.
Do your research on the agent and their agency every time you sell a property. Ask better questions when you’re interviewing them. Seek to learn what they are good at, how they plan to market and sell your property. What you’re looking for is non-standard sales speak. They should also have come prepared so they can show you their success with selling properties similar to yours.
Most important is sounding out their knowledge of the market’s phase in the property cycle and their specific local knowledge of listings and sales. Here are a few questions:
- How well do they know their area and what’s happening in it?
- When did they last sell a property similar to yours?
- How long did it take?
- What could be done to shorten the time your property is on the market?
Strategy and Plan
Finally, as a vendor, make sure the agent’s goals for your house sale align with your own. An agreement needs to be reached between you and the agent on the condition of your property, and the expected sales price. Agents may suggest some cosmetic work, to modernise or refresh the property. Painting walls, home staging, and maybe landscaping to create a welcoming entrance.
Condition of the property
At the same time, the agent should be able to give you a guesstimate on how much you need to spend and how much more profit is likely to achieve due to the investment. Of course, you’re not going to hold them to it, and you’d get quotes from the service providers doing the work, but this extra input does separate the good from the average or extraordinary from the ordinary.
Understand how your home will be marketed, both offline and online. Review the marketing copy and photos, and make sure it’s what you expect from it. Remember the plan is to get your home sold, in good time for the right price.
Prospective Purchaser Relationship
From a purchaser’s perspective it’s best to assume the listing Agent is working for the vendor, not you. Their commission comes from the property sale, and it is the vendor that has chosen the agent over his or her peers. This doesn’t mean you’ll have no influence, remember the property cycle does change how an Agent may interact with purchasers. Quieter times call for a different approach, therefore, know where the market is in the property cycle.
What happening in the area you are looking to buy a property? Not all cities or regions are in the same phase of the property cycle.
Property sales prices can be going upwards in one city (boom phase) and dropping in another area (slump phase). So it’s important to know what’s happening where you’re looking to buy as well as have a broader view of the national and global environment. Consider everything that may change the stability of the house price so you can purchase well.
Property Sales Analysis
‘Knowledge is power’, and you can use it before you deal with listing agents.
Do your research before you find the home you want to buy.
The more you understand the local area and recent sales activity as well as what’s on the market for sale; the easier it is, to make sure you pay the right price irrespective of whom you deal with as part of the sales process.
Buying a home is a big ticket item, so it’s not the time to be seen as a novice. Yes, it may be your first home purchase, but you can be confident when you know what’s happening.
Finally, always seek professional legal advice, and it’s always a good idea to communicate with your accountant too before you sign an agreement to buy a property.
Being a vendor or a buyer is no guarantee you’ll be on the right side of a property deal.
The more you know about the property market, and your circumstances, the more confidence you will have in making the right decision. The aim is to avoid asking the question: Did my agent just rip me off?
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