Evidence shows that estate agents can sell property at a higher price. So it’s hardly surprising that most homeowners looking to sell rely on their support. We’ve partnered Bestag to compile a list of pointers and potential pitfalls to note when choosing an agent.
Isn’t it enough to shop around a bit?
It sounds foolproof: Provided you ask around a few professional estate agents in your area and have the chance to compare and choose, you’re good - right? Unfortunately, not quite...
Scope to compare and choose doesn’t guarantee success. There are many, many estate agents out there, all of whom will promise you a successful sale.
But this makes choosing carefully all the more crucial. And due diligence is a must! As a general rule, we suggest selecting three agents should suffice to ensure good competition.
Generalists or specialists?
Always pick the latter! Unfortunately, estate agents tend to over-stretch themselves. The decisive criteria include how well they know the region and whether they keep a list of potential buyers there. Experience matters too - that goes without saying.
Is it worth considering flat-rate estate agents?
At first, the commission model leaves many sellers cold. After all, why should they give the agent a sizeable chunk of the sale price? And it’s precisely this reluctance that those behind the fixed-price offers seize on. They’re well aware of how tempting the (supposedly) lower fixed price for the placement is for many.
But there’s a catch. Agents working for a lump sum have little incentive to go the extra mile and get the best sale price possible. Quite the opposite - they even tend to rush the sale and probably also at too low a price.
Compounding the issue, agents like this leave the showing around to the seller – to keep their expenses low. Needless to say, its annoying and tedious. At the end of the day, the homeowner selling loses out. They get less from the sale than what their home is actually worth and the whole thing takes much more work.
You’re going to get the best out of your agent if you agree on a performance-based commission model. And this commission - normally 2 to 5% of the purchase price - is only paid out if the target price is reached. The lower the end price, the lower the commission. But it works both ways, too. The estate agent gains from a higher price, so they will go all out to get one. So ultimately, all parties benefit.
Get the agent to sell and value it all-in-one?
However stellar your agent’s reputation, it’s still best to play safe and combine their estimate with other methods. The gold standard here is a so-called hedonic valuation, which banks also use.
How about relying on private word of mouth?
Private recommendations deserve closer scrutiny:
Based on what quality criterion is the recommendation made or how is it justified?
How close are the person recommending and the person being recommended? Familiarity alone is no guarantee of quality.
Might the person doing the recommending be getting a backhander from the person they are recommending? This often happens in industry - especially if the latter is a lawyer or architect.
If you rely on just only agent, however highly recommended they come, you are risking undervaluation needlessly. It’s simple: without any competition, the estate agent has every reason to wrap up the property sale as swiftly and efficiently as possible, hence the risk of under-pricing increases. After all, finding would-be homebuyers is not difficult.
This is how Bestag supports you:
Your Bestag client advisor will meet you for a personal on-site viewing appointment and get multiple agents to take part on the same day.
They are screened carefully and objectively, with criteria like these in mind:
How many sales has this estate agent completed in your region in the past few months?
What was the average sale price compared to the list price and how long did the sale take?
How many interested parties in their portfolio?
Bestag compiles a report for you, including three agent valuations and two hedonic valuations, and draws up a contract including a performance-based commission model.