In life there are lots and lots of small to medium sized financial decisions to be made, like can we afford to go on vacation? Should we buy that new dishwasher? Do we really want a fourth dog?
And then there are big decisions, with large financial implications, the biggest of which is often whether or not to sell your home. Besides deciding to sell your home, the second biggest decision is which real estate agent to choose to help you with the entire sale process, and keep reading, because I’m not saying this just to conclude you should hire me.
Sometimes that’s an easy decision to move, if, for instance, you are being transferred for work and have to move; but sometimes it’s very hard. Is it really time to break up housekeeping? Do we really want to sell and move into assisted living? Should we sell and move to North Carolina, so we can be nearer the kids? Can we afford that new house we like so much if we sell our current house?
The trickiest part about hiring a real estate agent is when you have a relative or close friend who is a realtor, but may not be who you’d want to hire, for whatever reason, yet you feel obligated. If you were selling a bike on Facebook Marketplace, or even perhaps a used car, it would be a much easier decision, but because for 90% of us our house is our biggest financial asset, and we want to get top dollar for it, it’s sometimes an extremely difficult decision. Do we want to let Aunt Judy sell our house for us, although it’s just her second job and she’s only ever sold one house?
Jay personally had an issue like that, a number of years ago, before we even knew each other, when he was responsible for selling a home in a suburb of Denver, Colorado; and by the time he was involved, the realtor had already been chosen–a relative who was a part time realtor. The decision to hire a different realtor, who came with great references, was easy, because by this time the house had languished on the market for months. The realtor switch was made, and the house was under agreement in a few weeks. However, that is definitely not how you want to pick your realtor.
There isn’t an absolute answer to this quandary, as all situations are unique, but here are some thoughts:
You need to think of yourself first, due to the money involved. Every successful realtor has had a first sale, thanks to someone who took a chance on him or her. I had a neighbor who trusted me enough that she gave me a chance to help her seller her home and buy her next home, and that was instrumental in my future success.
- When choosing someone to list your house for sale, experience and track record are very important.
- Experience breeds success, so you very probably will get substantially more money for your home by hiring someone with experience, particularly in your area.
- Real estate is an extremely demanding career, and most people aren’t good at it.
- The statistics on the internet are that 87% of real estate agents fail (leave the industry) within five years. To last 5 years and beyond you must have done well for a lot of people, because new business comes almost exclusively from referrals and references.
As a “keep everyone at least semi-happy” approach, note that real estate agents often get business from other agents outside their areas, and for this they typically pay a referral fee. If, for instance, your cousin just got her real estate license, you could still hire a different agent but have your cousin refer the potential listing to the other agent. The listing agent you work with would likely be amenable to paying a portion of the listing agent commission to your cousin as long as she is a a real estate licensee. *We can’t pay referral fees to cousins unless they also hold a real estate license.
Why the photo above? This is the group at a recent family reunion at my house. It’s important to me to maintain good family relations. In this group there’s a real estate attorney, two builders, a sign guy, and a cousin who recently sold their home–I don’t approach any of them for business. It’s just easier to be able to sit at the family reunion, Thanksgiving, etc. letting personal relationships be just that. And I don’t take it personally if any of them decide to hire another realtor. Some people want their transaction to be ‘all business’ and others don’t want friends or extended family underneath the hood of their personal finances.