When Steve Murray put his house on the market two years ago, he had no trouble finding a broker eager to take the job. Four different firms competed to list his $420,000 Denver home, with three offering to accept less than their usual commission to win his business. In just 20 days, Murray had a buyer--paying the full asking price.
Just because brokers are jumping through hoops to sign you up in these days of speedy sales doesn't mean you should rush into a decision. Marketing a home for maximum price, then evaluating multiple offers (which can happen now) takes a certain sophistication.
There's no dearth of real estate salespeople in any given area. But most homes are sold by the go-getter minority--and you want to enlist one of them. Take the time to interview two or three. Ask how many houses like yours they have sold in the past year, and get names of former clients. You don't want to list a luxury home with an agent who deals with young buyers and entry-level houses or, worse yet, someone who sells an occasional property as a sideline.
Most agents will bring along a comparative market analysis--a look at what homes like yours have sold for recently. Don't simply go with the one suggesting the highest asking price. Brokers know you'll be tempted to do that and may steer you to an inappropriately high number to win your business. That could turn into a big mistake, as your property languishes on the market for months.
Get a marketing plan describing what the broker will do to sell your house, advises Julie Garton-Good, author of Real Estate à la Carte: Selecting the Services You Need, Paying What They're Worth (Dearborn Trade, $17.95). It need be only a page. Don't worry if a weekend open house isn't part of that plan. Open houses do more to drum up prospective clients for the agent than they do to find a buyer for you, says Garton-Good. Unless you go with a discount broker (one that charges less but may require you to show the house yourself, for example), make sure the property will be listed in the local Realtor association's Multiple Listing Service, a constantly updated list of properties that goes to member brokers.
Look for an agent savvy enough to suggest ways to make your house more appealing, from repairing the driveway to removing clutter and storing furniture that makes your rooms seem smaller. Ask yourself if this is a person capable of leveling with you about such (sometimes sensitive) problems. Pick someone you'll feel comfortable talking to for the next three months and who you think will be honest--then call the state licensing agency just to make sure.
Speaking of three months, that's the longest contract you'll normally want to sign. Find out how long houses in your area are taking to sell and try not to go much beyond that.
Cost has become one of the negotiating points. With houses selling quickly, for more than ever before, and with a dearth of inventory in many areas, brokers are competing for listings. Murray, as a co-editor of the real estate newsletter REAL Trends, had an edge when he got an agent to list his house for a 4% commission. Such discounts are common these days, he says. In 1992, the average commission was 6.1%. Now, Murray says, it's 5.4%.
If you get a broker to take less, make sure the difference comes out of his or her pocket--not the half that traditionally goes to the broker who brings your buyer. You don't want to build in a disincentive for others to show your property. (And, of course, your broker could get it all by being the one to find the buyer.)
Tens of thousands of dollars are often involved. Even more is at stake for you. This isn't one of those times when your wife's slacker brother will do.
By Carol Marie Cropper