One crucial mistake to avoid when choosing a real estate agent

“But the main thing is just to call all the agents in and let them come and do a listings presentation to you as a seller, get a feel for the rapport that you build with them and find out what they can do for you as you sell your property,” Mr Neary said.

Investors are also strongly advised to discuss their personal and financial goals, as well as their capabilities and limitations, in order to find the agent that can cater to their needs.

Agent fees

More often than not, investors looks at discounts on fees as one of the primary considerations when choosing a real estate agent, thinking that the best agent is the one with the cheapest fee.

However, Mr Neary said that a cheap service does not always equate to a good service.

In fact, the best agents in the market sometimes come with a hefty price tag – and that is ‘absolutely okay’, according to him.

“It’s not about the discounting of the fees, it’s not about the cost of the fee. It’s about the value that they can get you in the end sale.”

“If you are selling with a good agent, you may sell your property for 10 per cent more than what you’re going to get if the agent is less adept and has less of a network in that area and brings less buyers through.”

“Definitely, they don’t want to discount on fees because they rather sell on the value that they bring,” Mr Neary highlighted.

To identify the agent that can bring you the best value, Mr Neary recommended asking the prospective agents to do a listing presentation where they could tell them why they are best equipped to sell the property, or simply ‘put the pitch in’.

What NOT to tell the agent

Apart from thinking that cheap fees equal good services, another mistake that investors usually make when selling a property is telling agents how much they think their property is worth then simply picking the agent who agrees with them.

According to Mr Neary, dictating the price of the property instead of trusting the agent’s market knowledge can prove harmful to the sales process.

For instance, if the investor’s perceived value of the property is higher than the market value, they will have a hard time selling the property, even with the help of a real estate agent.

“A good agent should know the market much more effectively than you do. Rather than tell the agent what you think it’s worth, it’s good to understand what your property’s worth. Ask them how they know. Ask them for the evidence,” Mr Neary said.

“They’ll have to bring you all of the past sales in the area and all the stats. Good agents will have all those stats at their fingertips and the evidence to back up what they're saying.”

“If an agent is saying to you, ‘This is what your property is valued at,’ and they've got the stats to back that up, listen to them.”

Investors who are persistent about selling the property based on their perceived value often have a hard time finding good agents. After all, good agents want to deliver on their promises, and they cannot uphold a good reputation without good sales.

According to Mr Neary: “A lot of agents will sit there and think, ‘This guy is so far off the ball, I don’t even want to sell their property. That’s too much of a headache for me,’ because an agent’s reputation is only as good as their last sale.”

“If they pick up a property based on a promise to the vendor that they can hit that amount, then that property languishes on market for a long time and pushes out the sell date, that’s not good for the agent’s reputation.”

At the end of the day, it’s best to trust the agents, as long as they are backed by sufficient market data, knowledge and experience.

Questions to ask

Following a review of their reputation and their knowledge of the market based on current property prices, Mr Neary also encouraged asking agents about the time on market for the last few properties they have sold.

After all, prices should not be the sole basis of the capabilities of a real estate agent.

“If they go, ‘I sell my stuff before it even hits the market,’ you’ve got a pretty talented agent. If you think they’re selling it too cheaply but they’ve got a good standard industry benchmark, time on market, great collateral and a good strategy to get the best price, these are still key tangible things to consider.”

Moreover, investors are also encouraged to find out about the size of the agent’s network.

More often than not, agents with a big network of buyers find it easier to sell properties over a short period of time, and at a good price.

Having a big network of buyer’s agents is also a sign of being in touch with the market and, thus, knowledgeable enough to make a good sale.

“A network of buyers or buyer’s agents can help them get the property into the market before it goes on market, if I can put it that way. If they have a big marketing network through which they can bring lots of buyers through, your property gets the best opportunity to sell for the best price,” Mr Neary highlighted.

Tune in to Tim Neary's episode on The Smart Property Investment Show to know more about the lessons for investors looking to capitalise on the market.

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