FAQs Every Home Seller Should Read Before Hiring a Real Estate Agent

Before you hire a real estate agent, read the answers to your most important questions.

Will a property I sell myself be at a competitive disadvantage compared to properties sold by real estate agents?

No-and in many ways, you’ll have an advantage. First of all, today’s buyers find their homes on the Internet on their own time. If they like your home, they’re going to contact you no matter what-and the odds are good that they’ll be happier dealing with you than with an agent. It is no secret that a huge number of homes are not selling and expire before the agent ever gets the home sold. Do a Google search and you’ll see the amount of training material the real estate industry offers to teach their agents how to persuade sellers to renew their listings for a year. There is no magic in what a real estate agent does.

To give you an example of the advantages of selling your home yourself, think about signs. When you list with an agent, they get to place a mini billboard in your yard that includes a tiny bit of advertising for your home and a huge amount of advertising for their company. The whole industry should have moved on to customized signs a long time ago-but they haven’t. You’ll have a significant advantage by tailoring your on-the-ground marketing plan to your home, including your FOR SALE sign.

Do homes sell for more when listed with a real estate agent?

That’s what the National Association of Realtors funded by real estate agents says, but there’s no independent data to support their statistics. If a real estate agent tells you they can get you more money for your home, ask them to bring you a buyer; if they can’t, they need to leave you alone to sell your house. Far too many listings handled by agents expire, unsold.

An agent’s opinion is not going to get your home sold. It’s easy for people to make guesses and conjectures, but to win in today’s market, you have to deal with hard facts.

How much time and effort is this really going to take?

It takes about as much time to sell your house as it takes to plan a long vacation. The marketing side requires the most time up front, but once you’ve gathered your facts, it shouldn’t take you more than a few hours to get your marketing plan started. You’d have to gather that same information for an agent, if you used one. And the process has been streamlined for you on sites like simpleandsold.com.

If you’re skeptical, take the amount you’d pay in commission to a real estate agent and divide it by the number of hours it takes to plan a vacation. The result should help you see that time you put into selling your house will be time well spent.

A real estate agent told me it would be dangerous to sell my own home, since I’d be letting strangers in my house all the time. Should I be worried?

Unfortunately, you’re going to have to let strangers in your home to sell it. But you would have to do this with or without a real estate agent, so this is almost a moot point. Remember that you can open your home any way you want: you can take down information for safety purposes; you can schedule your viewing appointments so that you won’t be alone in the house; and you have the right to stop the process if you ever become uncomfortable with a person’s presence. This is something even real estate agents face.

Do I need to use a Multiple Listing Service (MLS) to get the exposure I need for my home?

First, you should understand what MLS is. It was not designed as a marketing venue for homes; rather, it’s a simple way for brokers to negotiate compensation with each other, so that Real Estate Agent A can tell Real Estate Agent B, “Sell my listing and I will pay you X.” Period.

My local MLS, which was named #1 in the country, is still way behind the times. It allows me to upload approximately eight tiny (two-by-two-inch) pictures and about three sentences of description. I’m not even allowed to link to anything. How is that a viable marketing tool?

Look at Zillow, Trulia, and Yahoo! Real Estate and you’ll see how much the MLS has been eclipsed. It’s become just an outdated method for real estate agents to protect their turf. Some systems are not even Mac compatible.

With Simple and Sold, you can put your home up for viewing on hundreds of websites, and you can add up to thirty-six large, high-definition photos in your listing. You can have paragraphs of description about your home. You can attach listing brochures and other files, which interested buyers can view online or download. You can add background music or a voice-over about your property’s features; you can provide links to area schools and anything else you want.

What is the NAR?

NAR stands for the National Association of Realtors, the lobbying group listed at #4 on opensecrets.org’s list of political heavy hitters. It’s the organization about which Joe Nocera of the New York Times once wrote: “You have to wonder sometimes what they’re smoking over there at the National Association of Realtors.”

According to Bloodhound Realty Blog, The NAR has stayed under the radar while doing a monstrous amount of damage to the economy, the housing market, and most importantly, the consumer. Bloodhound Realty Blog states (this blog does a great job of exposing the NAR), “It was the NAR that lobbied for each law and rule change that resulted in the housing boom, the sub-prime lending catastrophe, the wanton bundling of fraudulent loans, the ongoing subsidization of the secondary mortgage market, etc. The villain behind all the villains in the collapse of the American economy is the National Association of Realtors.”

“The real estate licensing laws, written in their original form by the NAR, exist to limit competition in real estate brokerage, eliminating alternative sources of real estate brokerage to artificially sustain higher commissions for NAR brokers”

John Crudele of the New York Post recently stated: “The real estate industry lives by the motto: “location, location, location.” Next week it’ll be known for “deception, deception, deception.” People want the truth and the NAR is deceiving the public all to save the sacred real estate commission. Crudele also reports: “The National Association of Realtors admitted that it has been reporting bad figures on sales… Jeez! Tell the truth!… The Realtors aren’t doing the country any favors by sugar-coating their stats… and the people at NAR don’t seem to be bothered by the practice.”

Don’t most people trust real estate agents to get them the best deal?

Unfortunately, people don’t trust them. In the most recent Gallup poll, they ranked lower than bankers but higher than congressmen in terms of ethics.

In all fairness, it’s not the behavior of real estate agents that has been unethical; it’s the way their organization, the NAR, has worked to block their competition. As I see it, and as most Americans see it, competition is for the competent. You own your home, so you should have the choice to sell it any way you choose.

The NAR got a public slap on the wrist in 2008 from the Justice Department when the organization tried to stop real estate agents without a physical office from participating in MLS. The Justice Department had to sue the NAR to allow mobile, internet-based brokers-the kind who operate from laptops and Starbucks instead of fancy offices-to practice their trade.

I think the NAR should be ashamed of making taxpayers pay for this lawsuit, which (in the words of the DOJ itself) “requires NAR to allow Internet-based residential real estate brokers to compete with traditional brokers.” The Department said the settlement would enhance competition in the real estate brokerage industry, giving consumers more choice, better service, and lower commission rates. NAR is now bound by a ten-year settlement to ensure that it continues to abide by the requirements of the agreement.

But don’t Realtors operate under a Code of Ethics?

Ironically, the NAR emphasizes a “Code of Ethics” for all its members-but at the same time, they have been called on the carpet for deceptive statistics on homes sales.

In my opinion, anyone who needs an organization to tell them how to be ethical probably doesn’t understand the code of ethics that they’re swearing to uphold.

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All About Real Estate Agents

Who Are They…

Real estate agents are professionals instrumental in connecting the buyer with the seller.
Additionally, many real estate agents manage rentals wherein they introduce tenants to landlords and oversee the maintenance of the property on behalf of the landlords.
In most areas real estate agents are required to be highly educated, licensed and are regulated by a governing body.
Some real estate agents are also Realtors.
To use the title Realtor, a real estate agent must be a member of the National Association of Realtors which in addition to a number of other requirements, requires Realtors to adhere to a strict code of ethics and offers Realtors additional educational and designation opportunities.
Though not required by rule or law, it might be a wise decision to seek the services of a Realtor.

What Do They Do….

Real estate agents bring together two or more interested parties, perform those steps necessary to successfully conclude a transaction and charge a commission for their services.
For sales transactions, they charge commission to the seller while for rentals, commission is typically charged the landlord.
Real estate agents generally calculate their fee as a percentage of the selling price (in the case of a sale) and as part of the rent for rental units.

How Do They Do It…

People who want to sell or rent their property leave details of their property with the real estate agent.
Along with all property details the real estate agent will typically have keys to the house to facilitate showings.
The other interested party (i.e. the buyer/tenant), gets access to this information and to the property by contacting the real estate agent.
That’s how the real estate agent becomes a hub of information.
Contrary to some common misconceptions, real estate agents typically represent the seller or the buyer but rarely both.

Why Should I Use One…

First and foremost, to protect yourself. Real estate transactions are highly regulated, highly paper (document) intensive transactions.
The real estate agent possesses an in depth knowledge of the laws, rules, regulations, disclosures and documentation necessary to successfully complete the transaction to the satisfaction of the buyer, the seller and the law.

Because real estate agents are most familiar with local real estate market conditions, it is wise and makes sense to seek the advice of one to get an idea of the current trends and pricing for properties within that market.
A good real estate agent will know the prices (or price range) of various properties of different types and at various locations within the region.

Because of the real estate agent’s knowledge and expertise, property sellers often get a few thousand dollars more for their property.

Many home seekers, including seasoned real estate investors use the services of real estate agents to locate the best real estate bargains in the easiest and quickest manner.

Furthermore, the best agents analyze the wants and needs of a home buyer/tenant and provide valuable input as to the kinds of properties available to them within their budget. Therefore, a good real estate agent will not just present a list of available properties to the buyer/tenant but will actually discuss their needs and make suggestions.

The good real estate agent, working in this manner benefits in at least two ways…
First and most obviously, when the real estate agent is able to successfully complete the transaction the commission is earned and the real estate agent is paid…
and secondly, if they make the customer/client happy they earn a good reputation and often receive referrals (hence more business).

Worth Noting…

It is worth noting that there is a myth floating around that real estate agents only work on behalf of the seller, buyer beware.
This is not written in stone nor is it always the case. Real estate agents are, in most regions, highly regulated.
With few exceptions, real estate agents work either for the seller (as is the case with many listing agents) or for the buyer (as is the case for a buyer’s agent).
Additionally, some areas allow for dual agency where an agent can work for both the seller and the buyer or as a transaction broker where the agent represents the transaction itself and neither the seller nor buyer individually.
However, in the case of dual agency/transaction brokerage, note that rule, regulation (law) and ethics do not permit the agent to act in favor of either party while in detriment to the other.
If you are unsure of the relationship between you and your real estate agent, do not hesitate to ask.

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Real Estate Agents – What Sellers and Buyers Should Know About Them

For most buyers and sellers the prospect of dealing with a real estate agent brings forth unknown fears. While some agents are genuine and reputable and consider their clients best interest as their top priority, there is no dearth of unscrupulous individuals either who are just trying to make a quick buck at someone else’s expense. As a buyer or sellers of a property, it is your responsibility to choose a estate agent prudently. So, here is a look at what you should know about real estate agents before you approach one.

What does a real estate agent do?

Depending on which side he is working for (the buyers or the sellers), the realtor acts as an intermediary between the buyer and the seller and helps to complete the sale of a property. For his services, he is offered a commission from his client (seller, buyer or both). When working on behalf of the seller, the agent is responsible for putting the details of a property in the multiple listing services of the area and undertaking other efforts such as home staging to market the property.

In case of a residential property, a real estate agent may start off by putting up the details of the property on his personal or company website depending on whether he is a part of a realtor firm or works on his own. The next step would be to market the property through postcards and advertisements in real estate magazines offline as well as online.

Besides marketing the property, the agent who lists your home is also responsible for following up with other agents who might have clients that may have expressed interest in the property. An agent is also supposed to help you negotiate the best deal possible. He/She is with you every step of the way till the home is sold; advising you on all matters including procuring the services of a lawyer.

The agent does not charge the client/home seller for his marketing efforts; however, you will have to incur any legal cost involved in the selling process

When working from the seller’s side, a realtor is responsible for rummaging through the property listings of an area that his client is interested in. He coordinates with the real estate agent handling the property on behalf of the seller and arranges to show the premises to his clients. A real estate agent from the buyer’s side also helps to negotiate the best deal for his client and is with the buyer through out the purchasing process. He is also responsible for approaching a professional to get a property evaluation done. Some real estate agents may also offer other services such as advice and help for procuring home loans.

Real estate agents not only earn commission from the sale and purchase of homes but also when a property is leased. Usually the commission is paid to the real estate agent at the final settlement of the deal.

Who should you choose to be your estate agent?

Real estate agent can don three mantles that of an intermediary on behalf of the seller, the buyer or a dual agent. When buying a house, it would be best to hire the services of an agent who can work on your side, the same holds true when selling a home as well; you would be better of approaching a real estate agent who works for sellers.

Although real estate agents who work from the sellers or the buyer’s side do not have different credentials, some agents choose to play on a single turf while double agents may work for both the seller and the buyer simultaneously earning commissions from both.

The Sellers Real Estate Agent: An agent working on behalf of the seller will have his loyalties towards his client an he/she will try his hardest to convince the seller to give his client the lowest deal. So, as a buyer if you were to ask the seller’s agent if his client would accept a higher deal, he will be obligated to not divulge this information to you.

The Buyers Real Estate Agent: Similarly agents who work on behalf of the seller owe their responsibility to their clients and will try to get their clients the highest deal possible. So, they will not be willing to offer information on how low their client will go in terms of the price.

A dual agent: A dual agent is obligated to keep the honest picture in front of both parties; since he is entitled to a commission from both parties, he owes his loyalties to both the buyer and the seller.

Most real estate agents have a list of buyers as well as sellers so it is not unusual for an agent to work on behalf of both parties or at least get another agent from his real estate firm to negotiate on behalf of the seller or the buyer.

The problem with real estate agents

While real estate agents are in the business of marketing properties, it is not uncommon for them to play up their credentials; after all, it is a dog eat dog world and there is certainly no dearth of realtors in the market. While this is acceptable, some individuals resort to lying blatantly about their accomplishments and often their customers end up paying for their tall claims.

So, make sure that you check all the claims that are being made by a potential estate agent. Do not hesitate to ask for references. If he has not mentioned his experience in the brochure, make it a point to ask him about it. Also, inquire about other properties that he may have sold which were similar to the one that you want to sell/buy; this would include properties in the sane area, of the same size and price range.

Finding a good and reliable agent can save you a lot of trouble while hanging out with the wrong guy can quickly turn into a nightmare so take your time when picking an agent to buy/sell your home.

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Indian Real Estate, Property Portals and the 21st Century Real Estate Agent

Real estate agents? Hasn’t the internet gotten rid of them yet?

I hear this question all the time. Most people assume that property portals in India are working towards eliminating agents and facilitating direct interaction between seller and buyer. Though this is partially correct, real estate agents are the biggest customers of these portals and the portals are doing their bit to facilitate their growth. We interact with agents every day and we see most of them are doing good business. I want to take some time and explain the dynamics behind Indian real estate, the role agents’ play and how the role of agents’ is going to change in the future.

Note – Throughout this article, I’ve focused only on the rental and resale market and not gone into sale of new property by builders as the dynamics of that market are radically different. Also, the scope of this article is limited to Indian Real Estate.

“MakeMyTrip has eliminated travel agents. So why hasn’t the same happened to real estate agents?”

One needs to understand that ticketing is now a point-and-click industry – travel agents have been replaced by computers. The process of getting information about the journey AND purchasing the tickets can be done on the internet. Real estate is fundamentally an offline process. Though information aggregation is an important part of it, site visits, negotiations and paperwork all need to be done offline. Even from an owner/sellers perspective, renting out/selling a home isn’t as simple as listing it online – the process can stretch for months. This is where real estate agents step in – in guiding customers through the offline part of the transaction, bringing both parties to agree to the terms and finishing off the paper work.

Why aren’t property portals trying to eliminate agents and become virtual middlemen?

A property portal provides a platform for a seller and a buyer to interact (A seller can be an owner, builder or an agent). If we eliminate agents from this equation, portals are left with a C2C platform with property owners being the only source of inventory. Though many prefer a scenario like this, we need to figure out how the platform provider is going to monetize from this setup. They have the following options -

Listing fees – They can collect a fee from the owner/seller to list their property. There are few owners who’re willing to pay for premium listings (last time I checked, about 5% of owners listing online were willing to pay) but this is simply not enough to sustain the business. Indian consumers are ready to use a service which is free (free listings) OR pay for a service once it’s rendered (brokerage) but are not OK with anything in between.

Charge property seekers to get owner information – Another option would be to charge property seekers a fee to give them information about the owner who’s listed. This also isn’t a sustainable option because owners who list online tend to list on multiple portals and you can always finds a portal which gives you the owners information for free.

Brokerage fee when the deal is closed – This would be a great monetization scheme that everyone would be willing to pay for, but is very hard to implement. To do this, portals need to keep track of every deal that closes offline and that would be next to impossible.

There might be more options, but I don’t really see them becoming huge ‘revenue making machines’. Running a real estate portal is a VERY expensive affair and portals would need a solid revenue stream to offset that cost.

This is where Real Estate Agents step in: Agents are willing to spend good money to market their properties on a platform which would give them good leads. Property portals see this as a steady, sustainable revenue stream. This, seemingly, is a match made in heaven.

So, you’re saying property portals have made no dent in the brokerage industry?

Undoubtedly, they have. In a BIG way! With many owners listing their properties online, agents are starting to feel the heat. Coupled with the fact that the number of real estate agents has almost tripled in the last few years, you’ll see that the average real estate agent earned a LOT less in 2014 that he did in 2011. Agents are beginning to realize that there’s a paradigm shift and it’s time to mend their ways, before the game gets taken out of their hands. There needs to be a shift in their mentality and it needs to happen NOW.

Role of the 21st century real estate agent

10 years back, agents pretty much charged money for information arbitrage – “I have the contact information of the owner/tenant and you need to pay me money to get this contact” was the mantra and it has worked. A disproportionate amount of money was charged for this seemingly simple service and the world went on without a qualm primarily because there was no alternative. But now there is. Increased owner listings on portals, multifold increase in number of real estate agents, internal portals in corporate companies which help employees find accommodation, Facebook groups, etc. have all impacted the brokerage industry and there needs to be an overhaul.

“What’s dangerous is to not evolve, not invent and not continuously improve customer experience” – Every Realtor in the country needs to latch these words said by Jeff Bezos, CEO Amazon. Information arbitrage can no longer be the game real estate agents play – We’re moving towards a world where access to information is getting easier and this cannot remain the USP of why a property seeker goes to a real estate agent. I believe agents need to adopt the following practices -

Save time for your customers – In today’s world, nobody has time to do things (even if they do have time, people don’t want to spend their time house hunting). Saving time for your customers is probably the best value-add an agent can provide. Be up-to-date on the latest inventory that is available in the locality. If you’re not confident if the customer will like your property, just tell them so! Don’t drag them to a dingy apartment they’ll never never be interested in – they’ll lose trust in your sense of judgment and never come back to you again. Learn to truly understand what your customer wants, be equipped to find the most relevant inventory, accompany them during site visits and close the deal. A really good agent should be able to close a rental requirement in 7 days and a resale requirement in 1 month, tops.

Give as much information as possible – Instead of hoarding information, agents need to freely part with it. Tell your customers exactly which apartment society the property is in, tell them exactly how far from the bus-stop it is and tell them if the owner/tenant is not comfortable with someone from their demographic. In the longer run, this helps build a better rapport with customers. Sure, other agents (or your customers themselves) might get to the owner/seller without you, but in the longer run, this is what will work.

Adopt technology, don’t fight it – Apart from Whatsapp, agents don’t use their smart phones for any business related activities. Why is this so? For starters, there’re many CRM applications on the app store which they can use. This alone will improve their productivity 100 times over! Other applications for maintaining inventory, marketing, etc. are available but are not being consumed by agents.

Develop skills a computer/technology can’t do – A computer can never negotiate a good deal for the client – that’s a job that requires a human touch. A computer can never get a feel of what the customer truly wants – Agents can do that given you’re always with the customer. This is a relationship driven industry, make sure you always remember that.

Use social media as a marketing platform – When owners are using Facebook as a platform for marketing, why shouldn’t agents? Creating a Facebook group to marketing their listings is a great way to reach new customers. There are some agents who do this already and are getting good response from the same.

Be professional – Cliche as it may sound, going back to the basics is something every agent needs to do. Being punctual, dressing in formals and talking politely to customers are some key skills that agents need to practice. Again, there are agents who’re well mannered, but the number seems to be shrinking.

The list can keep extending, but I can summarize it this way – If you’re a real estate agent, think of what you were doing for your business 5 years back and compare that to what you’re doing today. If nothing much has changed, understand that you’ll become redundant within the next few years. The world is changing and only those who change with it will live to fight another day. Portals have evolved, house hunting has changed for end customers and it’s about time the role of the real estate agent changes as well.

How are we positioned in this complicated market?

Our vision has always been to build A Technology Powered Real Estate agency that works towards helping our customers find a home they truly love. We do that by mixing cutting edge technology and expertise brokerage. We’re adding great real estate agents to our team, giving them next-gen mobile applications/desktop products to better run their business, helping them understand the market as it is today, providing training sessions and learning material and eventually, helping them serve customers better. Given the amazing response we’ve received from customers and agents so far, we’re confident of the road ahead.

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Real Estate Agents and the Internet – How to Buy and Sell Real Estate Today

Then and Now

Ten years ago, a search for real estate would have started in the office of a local real estate agent or by just driving around town. At the agent’s office, you would spend an afternoon flipping through pages of active property listings from the local Multiple Listing Service (MLS). After choosing properties of interest, you would spend many weeks touring each property until you found the right one. Finding market data to enable you to assess the asking price would take more time and a lot more driving, and you still might not be able to find all of the information you needed to get really comfortable with a fair market value.

Today, most property searches start on the Internet. A quick keyword search on Google by location will likely get you thousands of results. If you spot a property of interest on a real estate web site, you can typically view photos online and maybe even take a virtual tour. You can then check other Web sites, such as the local county assessor, to get an idea of the property’s value, see what the current owner paid for the property, check the real estate taxes, get census data, school information, and even check out what shops are within walking distance-all without leaving your house!

While the resources on the Internet are convenient and helpful, using them properly can be a challenge because of the volume of information and the difficulty in verifying its accuracy. At the time of writing, a search of “Denver real estate” returned 2,670,000 Web sites. Even a neighborhood specific search for real estate can easily return thousands of Web sites. With so many resources online how does an investor effectively use them without getting bogged down or winding up with incomplete or bad information? Believe it or not, understanding how the business of real estate works offline makes it easier to understand online real estate information and strategies.

The Business of Real Estate

Real estate is typically bought and sold either through a licensed real estate agent or directly by the owner. The vast majority is bought and sold through real estate brokers. (We use “agent” and “broker” to refer to the same professional.) This is due to their real estate knowledge and experience and, at least historically, their exclusive access to a database of active properties for sale. Access to this database of property listings provided the most efficient way to search for properties.

The MLS (and CIE)

The database of residential, land, and smaller income producing properties (including some commercial properties) is commonly referred to as a multiple listing service (MLS). In most cases, only properties listed by member real estate agents can be added to an MLS. The primary purpose of an MLS is to enable the member real estate agents to make offers of compensation to other member agents if they find a buyer for a property.

This purposes did not include enabling the direct publishing of the MLS information to the public; times change. Today, most MLS information is directly accessible to the public over the Internet in many different forms.

Commercial property listings are also displayed online but aggregated commercial property information is more elusive. Larger MLSs often operate a commercial information exchange (CIE). A CIE is similar to an MLS but the agents adding the listings to the database are not required to offer any specific type of compensation to the other members. Compensation is negotiated outside the CIE.

In most cases, for-sale-by-owner properties cannot be directly added to an MLS and CIE, which are typically maintained by REALTOR associations. The lack of a managed centralized database can make these properties more difficult to locate. Traditionally, these properties are found by driving around or looking for ads in the local newspaper’s real estate listings. A more efficient way to locate for-sale-by-owner properties is to search for a for-sale-by-owner Web site in the geographic area.

What is a REALTOR? Sometimes the terms real estate agent and REALTOR are used interchangeably; however, they are not the same. A REALTOR is a licensed real estate agent who is also a member of the NATIONAL ASSOCIATION OF REALTORS. REALTORS are required to comply with a strict code of ethics and conduct.

MLS and CIE property listing information was historically only available in hard copy, and as we mentioned, only directly available to real estate agents members of an MLS or CIE. About ten years ago, this valuable property information started to trickle out to the Internet. This trickle is now a flood!

One reason is that most of the 1 million or so REALTORS have Web sites, and most of those Web sites have varying amounts of the local MLS or CIE property information displayed on them. Another reason is that there are many non-real estate agent Web sites that also offer real estate information, including, for-sale-by-owner sites, foreclosure sites, regional and international listing sites, County assessor sites, and valuation and market information sites. The flood of real estate information to the Internet definitely makes the information more accessible but also more confusing and subject to misunderstanding and misuse.

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