During the summer months, buyers are eager to make offers to settle into their new homes by the start of the school year in September. The numbers back this up, as pending home sales, which tracks homes under contract, rose 6.7% in May, but fell 0.4% in June, according to the National Association of Realtors.
In this market, you need the best agent to get your home sold – here’s how to hire a realtor:
1. Know Your Realtor
Interview multiple real estate agents. Ask them how long they’ve been in the business and whether or not they have experience in both down and up markets. Hiring a realtor typically involves a four-month contract – the market could dramatically shift during that time, so you need someone who can withstand the rough patches in the market. They should also have experience selling homes specifically in your neighborhood.
2. What’s the Marketing Plan?
It’s not enough for the real estate agency to simply post an ad in the newspaper about your home. Ask for a detailed list of print and digital outlets that your home will be listed in. If you’re using a full service real estate agency (which will take 4%-6% of the selling price as a commission), the agency should cover all of the marketing/advertising expenses. Also, consider the strength of the agency’s social media presence, as you’ll need the most visibility possible.
3. Pricing is Key
Sellers usually have inflated estimates of what their property is worth. Make sure each prospective realtor presents a comparative market analysis, which is simply a compilation of prices from similar homes in your area that have sold over the past few months. The pricing of your home should ultimately be based off of this information. If the realtor simply suggests a listing price without showing you the reasoning behind that price, that’s not the agent for you. And pricing is always a delicate balance: if you’re too high, the home will sit on the market for months, but if you’re too low, a bidding war will ensue among buyers.
[Order Scott Gamm’s new book from Penguin, MORE MONEY, PLEASE: The Financial Secrets You Never Learned in School]
4. Open Houses
Open houses are critical to generate interest among buyers. Before you sign with a realtor, make sure they will be hosting the open houses on weekends. Some realtors send colleagues to conduct their open houses – and you won’t know the experience level of these agents. Bottom line: know who will be working your open houses.
5. Realtors Should Screen Prospective Buyers
Ask prospective realtors if they screen buyers before accepting offers on the home. The realtor should require the buyer to submit a pre-approval letter from a bank. This documentation from the bank will prove that the buyer can actually afford your home, since in order for the buyer to receive this letter, the bank reviews the buyer’s credit history and tax returns. This prevents buyers from wasting the time of the agents and sellers. Some buyers think they can afford the home, make an offer and then a few weeks later realize they can’t get a mortgage.