Since most real estate commissions are based on a percentage and not a flat fee, the money earned by a real estate agent on the sale of a house or condo can be sizeable when the value of your house is $300,000, a half million, or more. With any other profession, trade, or service-for-hire, consumers expect a standard of customer service that matches the value paid for that service. Why is it then that so many agents get away with sub-standard service, yet still walk away with that fat paycheque? Oftentimes the client doesn't realize they got poor service. Having entered real estate late in life after 30-plus years in a number of other professional business sectors, I'm astonished at some of the things I see real estate agents doing--or NOT doing for their clients.
So you're paying your agent a good chunk of change. Are they worth it? Here are some of the problem areas and how you can spot a bad agent from a good agent.
The heart of the real estate system is the Multiple Listing Service - or "MLS" as it is known. This is a well-oiled machine that was built up by realtors and is paid for and maintained by realtors through the fees they pay. 80% of all property sales happen because of a match-up between buyers and sellers through the MLS. The system is essentially a huge database where agents submit detailed information for each property listing they receive. This information is then "syndicated" out to hundreds of other websites. A large proportion of listings also go out to individual agent and brokerage websites through something called IDX feeds - or "Information Data Exchange". Agents working with buyers have their clients subscribed to automatic searches, so listings also go out through these searches every night at midnight. Still more buyer agents keep a close watch on the MLS and see new listings just seconds after they get posted.
So naturally, each and every listing a selling agent submits to the system should be handled with extreme care, accuracy, and optimized as fully as possible so that the seller (you) gets the best opportunity to attract as many potential buyers as possible. Unfortunately, I can't tell you how many sloppy and down-right lazy listing uploads I see every day. Some of these agents just don't care or they delegate the task to a junior. Here are some of the things that can go wrong:
Bad Agent: The agent doesn't take the time to fill in complete information or, worse, the listing has inaccurate information. The agent doesn't hire a professional photographer to take photos or, worse, doesn't include any photos at all. Some agents don't even go to see the property! There are many agents in the 905 who list downtown Toronto properties for investor clients who may have bought a condo, and the agent doesn't even view the condo. They just clone information from other agents' listings and take a guess at the rest.
Good Agent: A good agent actually spends some of the commission money you are paying them to hire a REAL professional photographer. A good agent also makes sure that your property is advertised using a Virtual Tour of some kind so that people see more than the minimum photos allowed on MLS and, even better, the Virtual Tour has 360 degree views of principle rooms, plus maps and other details. A good agent also takes the time to ensure all of the information is 100% accurate on the listing.
What can you do about it? Ask any agent you hire whether they will be doing a virtual tour and using a professional photographer. The fact is over 90% of all buyers start their search on the Internet, and any agent who is not doing good photos and maximizing Internet exposure on all of their listings, is either behind the times, lazy or cheap! Secondly, ask your agent to send you a "draft" of the MLS listing BEFORE they submit it to the system. Check it over for mistakes. Remember, you are paying for this and have a right to make sure it is done correctly. You are also legally responsible for the information you are disclosing to the public about your property.
Poor Property Preparation...
If you're selling something that's worth a half million or more, you don't just sign a bunch of papers and stick a sign on the lawn. The first two weeks of a home sale are critical and it needs to be done right. That first impression when someone clicks on the photos online or steps into a showing can make or break a sale. Depending on the situation, there are all kinds of things that a good agent should be addressing with a seller. Does the property need repairs, paint colours neutralized, or does it need decluttering, staging or cleaning? Do you need to order a status certificate for a condo or do a pre-home inspection for a house? Has the agent made sure keys are available and tenants are cooperating for showings if tenanted? It's interesting how the smallest thing like keys not working, a small brokerage that is closed on Sundays or has voicemail instead of a live appointment desk, or a property that doesn't show well, can easily disrupt the flow of good buyer traffic. Once that listing starts to hit 30 or more DOM (Days on Market) it's the kiss of death! Here is the difference between a bad agent and a good agent when preparing a property for sale:
Bad Agent: A bad agent is anxious to get you to sign those listing papers. They are ready to list your house "tomorrow" and there is no talk of strategy based on the current market. They have no suggestions on how your property should look for showings. The agent really has no background or skills in marketing at all. They just follow a formula of uploading listing data, slapping down a single photo, and hoping for the best. Did you know that even in our hot market, approximately 50% of all listings posted to the Toronto MLS system expire?! The reason for this is twofold: lack of proper exposure and lack of quality representation. Poor representation affects everything critical for a successful sale from property preparation, marketing, pricing strategy, and negotiation skills.
Good Agent: You'll know when an agent is really using a professional photographer and stager because they need a few days' time to schedule those appointments. They will map out a number of activities with you that might take a week or more to get done leading up to the day that the listing is released. A good agent spends time making sure the house and listing are 100% ready to be released into the marketplace.
What can you do about it? Interview at least 3 real estate agents before you list your house for sale. Do not sign any papers at the listing presentation, but let the agent give you their sales pitch. They should outline their approach to preparing, marketing, pricing and handling the sale. Then discuss the commission fee (which is always negotiable by the way). After meeting with at least 3 agents, you should have a pretty good sense of the different ideas and strategies that can be used to sell a house or condo AND what it's going to cost you.
Goofy Marketing Skills...
I wanted to use the subheading "unprofessional marketing skills", but I think "goofy" more accurately captures the real estate sector because it's one industry in particular where I see marketing that is not only unprofessional, but downright goofy. Real estate agents are first and foremost, sales people. They are NOT marketers and they have little to no training in marketing. And yet by the very nature of their business they take on marketing a product that is worth a half million dollars or more. When it comes to marketing, most agents have no idea what they are doing. In fact, I would estimate that about 80% of any agent's marketing budget goes to marketing themselves and not their properties. And even that is done badly!
Bad Agent: I'm going to use a live example to illustrate what I mean by bad marketing skills. Some of this is captured in the above areas for preparing a property and a listing, but an agent has to be able to write advertising copy and describe a property to potential buyers. Here is an actual description written by a Toronto real estate agent:
"Location, location, location plus imagination, imagination, imagination, divided by TLC with a little work to the the square root of future equals holy cow, ***ai carumba, wowzers baby*** we're talking big dish ;O)))"
Now some of you may be thinking, "Well he's trying to make the listing stand out and be different." But in my opinion, this is just not helpful to potential buyers, NOT professional, and more importantly--do these clients KNOW that their agent wrote this on their listing??!!
Good Agent and What You Can Do About It: I'd have to give you a course on writing good marketing copy, but IMHO an agent should not risk anyone's investment with this kind of goofy, cutesy approach. Again as above, ask your agent to show you a draft of the listing, a copy of all marketing pieces, and be sure to review all links to photos and virtual tours.