A real estate broker, real estate agent or realtor is a person who represents sellers or buyers of real estate or real property. While a broker may work independently, an agent usually works under a licensed broker to represent clients. Brokers and agents are licensed by the state to negotiate sales agreements and manage the documentation required for closing real estate transactions. Buyers and sellers are generally advised to consult a licensed real estate professional for a written definition of an individual state’s laws of agency, and many states require written disclosures to be signed by all parties outlining the duties and obligations. A real estate broker typically receives a real estate commission for successfully completing a sale. Across the U.S. this commission can generally range between 5-6% of the property’s sale price for a full service broker but this percentage varies by state and even region. This commission can be divided up with other participating real estate brokers or agents. Flat-fee brokers and Fee-for-Service brokers can charge significantly less depending on the type of services offered.
Do I have to pay a Realtor to sell my house?
Real estate agents get paid a commission when you sell your home, as a percent of the property’s sale price.
Does it cost money to talk to a Realtor?
No, it does not cost money to talk to a Realtor. Real estate agents don’t get paid until your home closes. You can interview real estate agents and they will not charge you anything for it. They know that this will be part of their business generating process, and that some clients will end up hiring them, and others won’t. A Realtor will likely even walk through a home with you and provide you with a recommended price as part of their listing presentation (aka sales pitch) to you. Once you decide to hire an agent, you’ll receive paperwork and likely sign a listing agreement. Most listing agreements are the “exclusive right to sell” kind meaning that for a designated period of time (usually 2-6 months) this agent will receive the agreed-upon commission if and when the home sells. Absolutely. Interviewing real estate agents is a great idea and an important step in your ultimate goal of hiring one. If you’re not outgoing by nature or just don’t have a lot of practice in this role, the idea of interviewing strangers can be a little intimidating.
When should I contact a Realtor to sell?
The ideal window for contacting an agent is around three months prior to selling, and no sooner than six months before you aim to list the property. By connecting with an agent early on, however, you can get professional input on which upgrades and repairs to invest in, and which ones to skip so you don’t waste time or money on unnecessary fixes. For example, an agent might advise you to focus on curb appeal rather than updating the kitchen countertops, as buyers in the area will be likely to gut and remodel the whole kitchen anyway. It all depends on area trends, though, and how hot the market is. If you’ve identified a few real estate agents who seem like good candidates to sell your house and have checked out their websites the next step is to arrange an in-person meeting. Allow at least one hour to show the agent your home and discuss possible prices and issues in the sale. Here are the topics you want to discuss:
The agent’s training and background
You should only consider someone who is licensed by your state, meaning the agent has met minimum levels of education, training, and testing. You’ll get someone with even more education if you hire a “broker” (someone with the power to oversee ordinary agents). Ask whether the agent is a member of a respected trade association such as the National Association of Realtors (NAR), or has special credentials, such as “CRS” (Certified Residential Specialist).
The agent’s experience
Look for at someone who has at least three years’ experience selling residential real estate, and a track record selling homes like yours—both in terms of geographic area and type of property. For example, someone who has sold lots of new homes in a planned unit development might not be the best match for your 50-year old suburban ranch house.
Recommended sales price for your home
Each real estate agent should come to your meeting with a comparable market analysis (CMA) of homes similar to yours (in size, amenities, and location) that are either on the market or have sold within a reasonable recent time period (ideally three months, but no more than six). The CMA should also include comparable houses that were listed but expired (most likely because the house was priced too high and no one bought). When it’s close to the date you actually list your house, the agent will update the CMA and suggest a range of prices. You’ll want to ask lots of questions about the CMA and make sure you feel the listing price seems reasonable. Unless it’s a seller’s market, with little competition and lots of buyer demand, you’ll want to be careful not to overprice the house. Under pricing is usually less of a concern, as prospective buyers will spot a bargain, swarm in, and drive the price up. Whatever you do, don’t choose the agent who thinks they can get the highest price for your house! They may be just trying to get your business with big promises. Also do your own homework on home sales, by checking out websites containing real estate listings, such as www.realtor.com, by the National Association of Realtors (NAR), and websites that collect data on actual selling prices, such as Zillow or Trulia.
Houses that the agent has sold within the last year (addresses and prices)
Listing and sales dates and prices will give you a good sense of the agent’s success selling homes. If there’s a big gap (in a negative way) between the listing price and the selling price of homes the agent sold in the past year, the agent might be unrealistic when recommending a listing price. Or if the agent’s listings took an unusually long time to sell (if at all), this may tell you the house wasn’t priced appropriately (or marketed enough). Of course, if none of the agent’s properties are similar to yours, this might not be a good match.
Suggested marketing plan
Find out how the agent plans to bring your house to the attention of interested buyers and why the agent believes past strategies will work for your home. If the agent doesn’t do open houses or take out ads in local newspapers, and you think those would be good ways to sell your house, find out why. Recommended prep work you’ll need to do before listing the house. A good agent will provide specific advice on what would make your house more marketable such as a major downsizing of house furniture, yard cleanup, painting, and other spiffing up. In cases of older properties, the agent may suggest you arrange a professional inspection by an experienced contractor so that you are aware of any hidden problems. Ask the agent to provide at least three names of current or former clients who sold their homes within the last year. Then call these people and ask how they liked working with the agent, whether there were any problems, and any other relevant questions.
The agent’s commission
Expect to pay somewhere 5% to 6% of the home’s sales price (to be split between your agent and the buyer’s agent), but this may vary depending on many factors, including the selling price of your home.
Your final decision should be based on the above factors as well as intangibles, such as how easy you feel it will be to work with a particular agent and how organized and detail-oriented the agent seems. If an agent comes late to your initial meeting and is interrupted by constant phone calls, think twice. (Of course, if the agent is in the middle of closing a deal, there may be urgent calls the agent needs to take, but the agent should explain this before you start your interview.) If you sense an agent seems overbooked with clients and won’t spend the time and attention you need, keep looking. You don’t want your agent to push you off to a less experienced associate because he or she doesn’t have time to handle key details of your house sale.
Benefits of using a real estate agent to sell your house
List at the right price
Listing your home at the right market price is a rule that Realtors must live by. Ok, it’s not really a rule but we all have to follow the current market trends. A Real Estate Agent will work to get the best comparable that will ensure that your home is marketed at top dollar.
Better home presentations
Showings, showings, showings! Showings are worth their weight in gold. Typically a Realtor will be present with any party that enters your home whether it be a buyer looking on an appointment or if your agent is holding an open house during the day. When you have a professional Realtor present they can discuss concerns and answer questions to potential buyers.
Get more buyer exposure
When you hire a Realtor to sell your home you should ask them about their marketing strategy. Every Realtor should have a good marketing strategy. Generally that strategy is in 3 phases. Internet exposure, canvassing the neighborhood, inviting neighbors to open houses or broker opens, and a good social media presence. Some Realtors go above and beyond and get drone videos which is awesome!
Higher offers from buyers
When you use a Realtor to sell your home they come equipped with the ability and power to negotiate contracts. A good Realtor will know how to work a deal and come out with the top market price that the market will allow. Sometimes buyers get into a bidding war which can really drive up the price of your home if the right buyers come around and they really want the property. All Realtors have marketing strategies that they implement to get the right exposure to your property.
Negotiates inspection results
Inspections are a thing. People want to feel secure and good about purchasing a home that can cost anywhere from $150.00 and beyond. And I don’t blame them. Depending on what information comes out of the inspection will determine where the deal goes. Perhaps there is a foundation problem that needs to be fixed or perhaps the property got appraised at a higher value etc. etc. Whatever happens a Realtor should be there to negotiate the contract for you.
Speeds up time to close
A good Realtor will have knowledge on how loans and transactions close when they go through the motions. There are many do’s and don’ts when it comes to purchasing or selling a property. A lender will tell you not to make any large purchases or not to quit your job when you are looking to buy. When selling, a good Realtor will be proactive with paperwork so that things and processes get finished in a timely manner. Always ask for updates from your Realtor as well so you know where the transaction is going.
Home sells at top dollar
This point is linked to receiving higher offers from buyers. When you use a Realtor to sell your home they will input it into the Multiple Listing Service (MLS) which all Realtors have access to. This means that you will gain exposure and other Realtors will basically be working for you to get your home sold. When you have more people looking at your listing you increase the chances of finding someone who is determined to purchase your home which is the exact type of person you are looking for to make sure your home sells at top dollar.