Carefully research your agent before you hire the "Mega Agent"
It's incredibly important that you fully research your real estate agent before you blindly hire him or her to help you with one of the biggest financial transactions you’ll ever deal with. Keep in mind that just because you may see an agent’s name around town on a lot of for sale sign signs, that doesn't necessarily mean they will do the best job for you.
Before we get into the more technical information you should discuss with your agent, you should start with a simple webs search for your agent’s name. You should also include a search for reviews of that agent that are on independent websites and definitely run a search to see if they've been involved in any lawsuits. You would be surprised at the amount of information that is available with a simple search but many consumers don’t bother.
Once you finish with the simple internet search, the next step is to ask the agent about their track record. I pulled some statistics from the MLS which is the go to source for real estate agents for one of the biggest agents in the area. There are certain areas in Maryland where you practically can’t drive down a residential street without seeing this agent’s picture.
I chose a time frame of two to six months in the past. I chose those dates because it gives the agent enough time to have each property on the market for a full 30 days and also allows for another 30 days for settlement after a contract has been received and negotiated. I also left out new construction and short sale listings because those are typically reported differently and would have unfairly skewed his statistics negatively.
During that period this agent listed 435 homes. Yes, that’s correct, over the course of those four months he listed more than 100 homes per month. That’s almost three houses a day. You would think with that kind of record it would be an easy choice to list your home to sell with him. But let’s dig into those statistics a little more. Of those 435 homes, only 210 have actually gone to settlement. That’s 48%. If you’re not fond of math, that’s less than half. That means if you had listed your home with this mega agent six months ago you had a better chance of your home NOT selling than selling.
Now, after having their properties listed with this agent, 83 of those home owners already decided to withdraw their listings or their listing agreements with this agent had expired without the homes selling. 92 of these homeowners still have their homes on the market six months later which means for 6 long months they’ve had to endure open houses, agent showings and the uncertainty of whether or when their home will sell. And those homes are still on the market.
So hopefully this is a useful illustration to show you how important it is to research your agent more thoroughly. If you’re interviewing agents to help sell your home, the most important statistics you want to ask are what percentage of homes they list actually make it to settlement, how long does it take them to sell those homes, and what percentage of the original list price do they sell for.
Also, be sure you ask the final percentage of the original list price. I say that because some agents are known to “buy” listings by telling sellers they can sell their homes for much more than other agents but then just keep reducing the price until it finally sells. Some agents will show you the sales price in relation to the final reduced price, but that won’t show you the actual amount that the sellers had to reduce their price before the home sold.