There are several ways you can lose money by picking the wrong Realtor. Before we get into some detailed ways you can lose money by picking the wrong Realtor, let’s start with how you can lose money by not picking a Realtor at all.
In Berkshire Hathaway’s 2008 annual report Warren Buffett stated:
“I made at least one major mistake of commission and several lesser ones that also hurt… Furthermore, I made some errors of omission, sucking my thumb when new facts came in that should have caused me to re-examine my thinking and promptly take action.”
To clarify – by not choosing a Realtor you can lose thousands due to liability and losing the deal.
This article is going to focus on choosing a Realtor to sell your house.
So let’s get started.
Mistake 1: Choosing a Realtor with limited marketing and exposure.
The two most “popular” marketing tools – open houses and classified ads – are only moderately effective. Surprisingly, less than 1% of homes are sold at an open house.
Advertising accounts for less than 3% of purchases.
The right Realtor will employ a broad spectrum of marketing activities, emphasizing the ones believed will work best for you and your particular property. Find a Realtor that uses several marketing options to assist you in selling your home.
Mistake 2: Choosing a Realtor just because you know them
It’s likely that you don’t interview people very often. An yet in order to find the Realtor who is right for you, you may need to interview several. The quality of your home-selling experience is dependent upon your skill at selecting the best qualified agent.
It’s interesting that in the real estate business, someone with many successfully closed transactions usually costs the same as someone who is inexperienced. Bringing that experience to bear on your transaction could mean a higher price at the negotiating table, selling in less time, and with a minimal amount of hassles.
The sale of your home could well be the most important financial transaction that you have ever been involved with. The person you select can make it a satisfying and profitable activity, or a terrible experience. It’s your home, and your money. Take your time and choose your listing Realtor based on solid information and character research.
Mistake 3: Choosing a Realtor because they say your house will sell for an inflated value.
Every seller wants to earn as much as possible when they sell their home. But a listing price that is too high often results in a selling price thousands less than the current market price. If your house is not priced competitively, people looking in your price range will reject your house in favor of other, larger homes for the same price. At the same time, the people who should be looking at your house will not see it because it is priced over their heads!
Overpricing usually increases time on the market, and that could cost you thousands. Ultimately, many overpriced properties sell below market value so stay away from agents that inflate list prices just to win listings.
Mistake 4: Not knowing your rights and obligations
Real estate law is extensive and complex; the contract for sale and purchase is a legally binding document. An improperly written contract, or a missed item can cause the sale to fall through, or cost you thousands of dollars for repairs, inspections, and remedies for title defects.
You must be certain which repairs and closing costs are your responsibility. Your Realtor should inform you of all zoning and deed restrictions and of the required disclosures of condition. If there are defects in your title, or if your property is in conflict with local restrictions, you or your Realtor must remedy them. Otherwise, you could lose thousands!
Mistake 5: Signing the listing agreement without reading everything in the contract.
The Realtor you hire to sell your home should be a marketing specialist – not just a convincing salesman. Many times an agent will have good intentions about marketing your house, but don’t have the marketing skills needed in today’s sophisticated market. You should always have the right to fire your agent if they aren’t performing as you expect. Always protect yourself by getting a guarantee of performance with the right to cancel! You deserve performance, and peace of mind with a minimum of risk.
In summary, choosing the wrong Realtor can cost you thousands. Even worse, it can delay the sale of your home costing you additional holding costs with your existing house. As Warren Buffet said, there are errors of omission and commission. Both types of these errors can be made when choosing a Realtor, so choose wisely.