Looking to sell your property? Have you got the right agent to get the best price for you? Finding the right agent is a difficult task. Let’s hear what Chris Kwan has to say about what real estate agents normally do in property sales.
Finding the Right Real Estate Agent
Hello, it’s me again, Chris Kwan. Today’s topic is about finding the right real estate agent.
For a lot of people, it is probably the first time that they look for a real estate agent, either to buy a property or to sell one. So it is difficult because you would not know whether the agent is good or not. In most cases, if you’re looking for a property, you have no choice. The property agent is right in the shop. However, if you are looking to sell a property, that is different.
The way that a real estate agent works is that he will try to get a contract with the seller, exclusive contract in most cases. In some cases, he may not be able to, but anyway as a buyer you wouldn’t know that. All you know is that this agent is the person that is representing the property in the window.
If you are looking from a seller’s point of view, you need to know if the agent has been working in your area for many years. If he looks a bit ‘young’, then you should be cautious. It does not mean that old is better. What I mean by ‘old is better’ is that he or she need to have a lot of experience, knowing the area very well, as well as prices. The most common question that people ask an agent is how much they should sell the house for. Probably the agent will give it a guess, and sometimes would tell you the house prices that he has sold last month. That is one of the ways that agents attract to advertise. They always advertise that they have sold a property and they put a big face on the posters in front of the house, of course at the expense of that seller.
The seller (vendor) in fact has to spend quite a lot of money just to get the property listed online. As soon as you sign a sales contract, the agent will ask you to list on some websites and this probably will cost you about $5,000 a month (combined). You haven’t even sold a house yet. Then the other thing they will tell you is that you have to make your house look pretty, probably by vacuuming, fixing the kitchen or bathrooms etc. So the real estate agents will give you some advice.
For those people who really don’t know what to do, it is good to speak to a couple of agents before you decide. It is also very important to ask the agents how much commission they are going to charge you. It varies. I have seen 1.7%, or even 1%. There are also companies that charge at fixed prices now. So there are pros and cons.
If you find an agent who is going to charge you commission, you must understand the way commission works. Say the selling price is $1,000,000, then 1% commission is $10,000. To some agents it does not matter much if he sells it for $1,000,000 or $1,100,000, because he will still get $10,000 plus a bit more. So to him it is much more important that he goes to the next deal to get his next $10,000, rather than trying to help you to get an extra hundred thousand dollars. This is how they work and you must understand, because their time is precious.
It is the same way- if you put a price too high, the agents will advise you to put the price down. The way the agents work is that they will advise you to put at a low price first, so they always say the word ‘from’. Then when people come for open home, the agents will tell potential buyers that some people have offered at certain price and will ask them to bid a bit higher, so they will try to work their way up.
That is basically what real estate agents will do for you. The question is, can you do it yourself? That is a big question. Okay that’s it. My five-minute talk is up. Thank you for watching this. If you have any questions, as usual, you know where to find me.
Disclaimer: The opinions expressed in the above video and transcription are solely of the author, Chris Kwan. We welcome any comments and suggestions, as well as articles from other professionals in relation to real estate.
Chris Khai Kwan
Barrister & Solicitor, High Court Australia
Principal Lawyer, KhaiKwan Lawyers
E: info@khkwan.com
