My ideas on this subject come from watching sellers make mistakes and listing agents make mistakes—and realizing that the mistakes happen over and over again. People are people.

I’d like to start with what you need and should expect from a good listing agent.

You need above all to trust the agent.

And of course you need evidence that that trust is well placed.

If you have a “lifetime agent”—someone you have worked with before, trust, and know is full time (full time now, not five years ago)—work with that person. Otherwise, you should conduct interviews with two, or better, three agents. You need to be able to accept as true what the agent is telling you—on a whole range of topics. Do not select anybody until you have evidence that they are smart, and hardworking, and completely open with you.

Whether it is a “lifetime agent” or a candidate, the agent will (or should) spend up to two hours with you, discussing your plans and schedule, looking at the house in detail with you, and recommending a listing price and any “fix up” work. He or she should be able to explain in a way you understand a marketing plan for the house, estimate the time it will take to sell the house at the recommended price, give a proposal for the commission and explain what it means, and estimate in detail your net proceeds after payment of all costs.

You’re going to select an agent based on what you learn at this meeting and then you are going to expect him or her to spend some money (for advertisements, signs, etc) and lots of time on getting offers, negotiating, and coordinating pre-settlement activities, such as inspections.

You have some protection, since the usual deal is that the agent does not collect one dime until the process is successfully over (beware the agent who asks for a retainer fee).

This means the agent has a stake in success, and a nightmare of failure. Failure to sell your house means input of time and money with not one dime of return. So the agent has a built-in incentive to get the house sold.

On the other hand, it is hard for you as seller to protect against the most common—absolutely the most common—way in which a seller is shortchanged by a listing agent.

The agent does not spend enough time working on the listing.

This is particularly a risk in the current buyer’s market.

The problem here is that the inputs of time that are actually productive—as opposed to being strictly for show, for the seller’s benefit—are not necessarily very obvious to the you as seller. The experienced agent knows what they are, however. It does little good to demand in your conversation with the prospective listing agent that he or she itemize time inputs expected. You should however listen carefully to the agent’s description of his or her marketing plan—the plan to get viable buyers to look at and hopefully consider the house-- and ask commonsense questions about it until you fully understand it.

Here is a short course in marketing residential properties in northern Virginia.

The house will sell quicker and at a higher price and better terms with more exposure. The hardworking agent figures out ways to get more exposure and implements them.. Mostly this is not rocket science—it is spending hours doing things that are routine, repetitive, and for those reasons sometimes not very interesting in themselves.These are things like placing directional signs at nearby corners and driving by to make sure they are still in place; calling to invite all the neighbors to open houses; making follow-up calls to everybody who attended the open house; follow-up calls to every agent who visited the house (called feedback calls); calls or postcards to the agent’s own database to alert re availability of the house; writing and updating a good MLS description of the property.; and many other tasks. Agents, being people, tend to quit doing these things out of boredom or frustration, or not even get started. Teams of agents and others aren’t much better and are sometimes worse at doing these things.

Not only should these things be done, they should be done well. Lot’s of agents do some of them or all of them, but not effectively.

MOST COMMON AGENT MARKETING MISTAKES

When with buyers in my car, I relish houses that have inaccurate driving directions in the MLS listing. I have had listing agents for such houses tell me “Gee I don’t know what’s wrong, we haven’t had much traffic”. I and my buyers find it and hopefully make a below list offer to get it. A great source of possible bargains if I represent a buyer. You as seller don’t want this to happan.

I’m amazed when listing agents don’t use the entire MLS remarks section. There are five text lines available. This is the most important ad an agent will ever write, because it is seen by perhaps 1,000 agents and an elite group of prospective buyers—those who are with agents, therefore probably qualified, and deciding which houses they want to see today. Yet agents don’t take the trouble to describe the details of the house. You will also find numerous cases where these five text lines are full of typos, made-up abbreviations, and other oddities which make for hard reading. Sloppy, sloppy, sloppy marketing.

Returning all sign calls immediately is a hard habit to instill. But if you know that 50% of house sales are made to buyers who call off the sign, you need to have that habit.

I hear from prospective sellers a lot that “open houses don’t sell houses”. Others accept my argument that, in this area at least, open houses increase exposure and therefore help sell houses. The truth is that an open house property prepared for and properly carried out is a very powerful tool. Here are key elements of an effective open house: Sunday afternoon; advertised in the Washington Post, and internet sites such as Craig’s List; large number of potentially interested people personally invited by the agent to attend (calls or mailings to the agents mailing list, to neighbors, to agents active in the neighborhood, etc.); signs leading in from major streets; balloons; all lights on in the house; the agent on his or her feet greeting, chatting, answering questions at all times; a strong effort to get names, addresses, phone numbers on a register; attractive brochures which don’t run out; and, very important, follow up calls to all—that means all—who attend. Voicemail messages are not good enough, and there is a script for these calls which works, and, frankly, most agents don’t know it.

MOST COMMON SELLER MISTAKES

With the above background, you can begin to see how an effective listing agent works.
Many sellers end up hiring the wrong listing agent. Here are some of the most common mistakes.

Seller hires a part time agent, possibly a relative, possibly the protégé of the older, experienced neighborhood realtor. This agent, no matter how hard they may work, simply makes mistakes all along the line, from the big mistakes, like mis-pricing the property, to the small mistakes, like forgetting to call to order the termite inspection. A successful full time agent is immersed in the marketplace day to day and simply does not make as many mistakes—hopefully, none at all.

Seller hires a new agent or a relatively new agent. Same as above. Sure they need to get started somewhere, but at your expense? Please note that there are huge numbers of new agents in 2007 in northern Virginia, the result of very high rates of entry in the last five years. Historically only 1 of 10 new agents is still in business two years after they first get in. Many of the current crop of agents will drop out.

Seller hires a very busy agent who just doesn’t do the work to go the extra mile. I have emphasized the amount of detail work an effective agent puts in. I personally am not able to do that kind of marketing work if I have more that 3 listings going simultaneously—and that’s a stretch (recall that at the same time I will have a number of listings contracted and am doing other work to move them towards settlement.) Others may feel differently. It may be said also that other members of “the team” will do the detail work. Having had a small team—I don’t now—I have only to say that an effective team requires delegation of work, oversight, some administrative work, sick leave, and a lot of other complications. There are a few effective teams, and there a lot of teams headed by a good salesman who is not a great manager—and it shows.

Seller ends up with the wrong listing price, possibly with the collusion of agent (“I can get you a better price than that other guy”), possibly as a wish fulfillment, possibly as a result of a faulty CMA and faulty recommendation by the agent. In the current buyer’s market in northern Virginia, I often see a price that I think is too high. This is absolutely fatal. Remember, it’s your decision. Also remember, look at the comparables with a clear eye, and ask the agent lots of questions about the CMA.

Seller does the wrong fix ups, or too many fix ups, or none at all. “I’ve lived with it for 20 years, they can always change the shag carpet in the rec room.” The agent—not enough backbone there—doesn’t argue. Or the agent, having breezed through the house, says “Looks pretty much ok”. Beware the agent who breezes through the house. Deciding what to fix is requires understanding of what is going to turn off buyers really bad. And of course cost is a factor. It’s a judgment call. It’s your judgment in the end, but you need to know what the agent’s best judgment is.

All this tells you some ways to judge an agent during the interview by asking questions and observing her or his behavior.

Call Kit with any questions on how to select a listing agent.