Selling a house for the first time can be just as intimidating as buying a house for the first time. Our home seller series addresses all of your questions by covering every step of the process. We’ll cover: the cost to sell your home; what a listing agent does for you; how to stage, list and show your home; how to buy and sell at the same time; how to field and negotiate offers; how to prepare to move; what closing day looks on from the seller side and more. Selling your house for the first time doesn’t have to be scary. We’ll spell it all out for you so you can confidently and successfully sell your home. Read the entire series here.
Once you decide to sell your home, the most important first step is to find a listing agent, otherwise known as a seller’s agent. Why do you need a listing agent? A good real estate agent should have the market knowledge, real estate know-how and sales savvy to get top dollar for your home, negotiate a fair deal, and decipher the legal lingo that makes up real estate contracts.
While digital tools and technology have made home buying and selling easier and faster than ever, there’s no replacement for the personal connection, market knowledge and negotiation skills a good listing agent can provide. Most home sellers would likely agree, 89 percent of sellers in 2020 used a real estate agent and said they would definitely or probably recommend their agent.
So what does a listing agent do for you? We’ll cover everything you need to know, including:
- How to find a listing agent
- What to look for in a listing agent
- The six questions you should ask your agent
- The six questions listing agents wish you would ask
- What happens after you hire an agent
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Let’s dive in!
How to Find a Listing Agent
Chances are good you used a real estate agent to purchase your current home. If you had a good experience, consider using the same agent again. But if you didn’t have a good experience or you’re not still in touch with your old agent (or just want to work with someone new!), you can always find a new agent.
According to the 2020 Profile of Home Buyers and Sellers from the National Association of REALTORS® (NAR), about 21 percent of first-time sellers used the same agent who helped them buy their home while 46 percent found one by referral from a friend, neighbor or relative. The number one way most people find a real estate agent is by referral. Talk to the people you know who have sold their homes lately and ask questions about their experience.
These are some good questions to ask:
- How long did it take for your house to sell?
- How did the agent market your house?
- Did it sell for the amount you wanted?
- How did your agent handle any problems that came up?
- What did you like about your agent?
- What did you dislike about your agent?
- Did you use the same agent to buy and sell or use two different agents?
- Would you use your agent again?
The answers to these questions will give you a good idea of whether or not that real estate agent is a good fit for you. Think about what you need from your listing agent. Are you trying to move within a specific timeframe? Do you need to net a certain amount of profit in order to make a new downpayment?
There are many other ways to find a listing agent. You could use third-party sites, like Zillow or Realtor.com, to find listing agents selling homes similar to yours or attend open houses in and around your neighborhood. Keep in mind that the agents listed on these sites and hosting the open houses may not actually be the listing agent.
If you’re relocating for work, your company may have connections with local real estate agents or relocation companies.
What to Look For in a Listing Agent
As you’re looking for an agent, there are a few professional traits you should consider. The 2020 NAR Home Buyers and Sellers Generational Trends report asked home sellers what they thought an agent’s most important skills and qualities were and the resulting list is a good tool to use for evaluating the agents you interview.
Copyright ©2021 “Home Buyers and Sellers Generational Trends” NATIONAL ASSOCIATION OF REALTORS®. All rights reserved. Reprinted with permission. January 26, 2021, https://www.nar.realtor/sites/default/files/documents/2020-generational-trends-report-03-05-2020.pdf.
These are the top five traits sellers thought were most important in a real estate agent:
- The reputation of your agent can be a significant advantage for you (or a hindrance). If your agent has the reputation for being trustworthy, capable, and easy to work with, other agents are more likely to want to work with you and bring potential buyers.
- Your agent should always be honest and trustworthy. Selling a house can be stressful and emotional. You need an agent who will be honest and forthright with you every step of the way.
- If your agent is a friend or family member, you may feel more comfortable with them. Many people use relatives or good friends who are agents because they already know and trust them.
- Knowledge of the neighborhood is essential when selling your home. Your agent should know pricing trends, new developments in the area, the average sales price, factors that may affect your sale and should be able to explain all of that to you in a straightforward, honest way.
- An agent with a caring personality or who is a good listener is more likely to better understand your needs and communicate clearly with you. There should be no guessing, no confusion and no uncertainty when it comes to selling a house.
Of course, your most important traits for a real estate agent may differ so be sure to ask questions when you meet with an agent for the first time. It’s usually not difficult to tell if an agent is a right fit for you. In fact, 75 percent of sellers only meet with one agent before listing their home!
As you search for a listing agent, think about what your priorities are when it comes to selling your home. What do you want to achieve? What do you want your agent to do for you? The NAR 2020 Profile of Home Buyers and Sellers found these were the most important services sellers wanted from their listing agents in 2020:
- Sell the home within a specific timeframe
- Price the home competitively
- Market the home to potential buyers
- Help find ways to fix the home up
- Help find a buyer
Copyright ©2021 “Profile of Home Buyers and Sellers.” NATIONAL ASSOCIATION OF REALTORS®. All rights reserved. Reprinted with permission. January 15, 2021, https://www.nar.realtor/reports/highlights-from-the-profile-of-home-buyers-and-sellers.
Your priorities may differ, so be prepared to discuss your needs with your listing agent. We’ll dive deeper into how to discuss your priorities with your agent.
The 6 Questions You Should Ask Your Listing Agent
A good listing agent will do more for you than just post your home on Zillow. There’s a lot more to selling a home, including pricing, marketing, staging and showing, negotiating and leveraging relationships with other real estate agents in the market. They can also help you purchase a new home at the same time.
When you first meet with a listing agent, they may give you a listing presentation. If you’ve never met the agent before, it might be an actual presentation with data, local information and an overview of their services. If you already know your listing agent, you will likely have a more informal conversation about your priorities.
However you meet with your listing agent, there are a few key questions that should be answered before you sign a listing agreement:
- How much will my home sell for?
- How will you market/sell my home?
- What is your commission?
- Can you sell my house within a specific timeframe?
- Can you help me buy and sell at the same time?
- What is dual agency?
1. How much will my home sell for?
This is the #1 question most sellers ask their listing agent right away. It’s an important question! You need to know how much you can walk away with to make the downpayment on a new home and cover your mortgage payoff.
Your agent will likely give you a price range you could sell for, based on market data and comparable home sales in your area. Pricing is heavily dependent on the market so ask to see the data that supports the price range they give you. A good agent will go through the numbers with you, explain them clearly and give you their professional recommendation for price.
You should also research the value and sale prices of comparable homes in your area. Keep in mind that third-party sites like Zillow and Realtor.com are not always accurate when it comes to home value estimates. Your agent has access to information from the local Multiple Listing Service (MLS) which tracks homes listed in your region. Ask to see what is being bought and sold in your area. The goal is to set a realistic price range that still allows you to make top dollar on the sale.
At the end of the day, you get to set the price your home is listed at. It’s your home! So if your agent gives you a listing price you think is low, you can ask them to raise it. Be candid with your agent about how much you need to make from the sale to cover the expenses of moving, your new home and the mortgage payoff. Your agent should be your guide and trusted advisor. Depending on how much equity you have and how much your home is worth, your agent may even recommend waiting to sell.
2. How will you market and sell my home?
Almost all agents will list your home on their area’s MLS, which is a private, information-sharing platform for real estate agents maintained by the local REALTOR® association. They may even advertise it on other area’s MLS.
Every agent is a little different in how they market homes outside of the MLS. Some do most of their advertising online through social media, video marketing, virtual tours, digital ads and promotion on sites like Zillow. Some agents prefer yard signs, open houses, direct mailers and print ads.
Ask your agent how they plan to market your home and the success rate of their advertising methods. Feel free to ask questions about their methods if it’s something you’re unfamiliar with and ask about the quality of the leads that come in for each marketing tactic. If you and your agent want to hold an open house, talk to them about expectations for you and your home. If you’re not comfortable with an open house, you don’t have to have one!
No matter which marketing methods your agent uses, they may want to take professional photos of your home. Your agent will discuss this further with you and how to stage your home. We’ll also dig deeper into staging your home in another post.
3. What is your commission?
Your agent will likely initiate this conversation, but if they don’t right away, you shouldn’t feel strange about bringing it up. Traditionally, both the seller’s agent and buyer’s agent are compensated by splitting six percent of the sale price of the home, which comes from the sale proceeds.
Nowadays, there can be a little more flexibility around this pay model but, by and large, most agents are still compensated by the seller. The 2020 Profile of Home Buyers and Sellers found that 77 percent of listing agents were paid with commission by the seller, while only 11 percent were paid by both the buyer and seller and six percent were paid by the buyer only. The report also found that 15 percent of clients did not know that commission is negotiable.
Not every agent will charge six percent, it depends on your market and the individual agent. Something to consider as you talk to your agent is the value that comes from an agent who knows their worth when it comes to commission.
When you are negotiating commissions with your agent be aware of their negotiation tactics. Are they willing to cut their commission immediately? If an agent is immediately willing to cut their own commission to gain your business, that should make you pause. How can they effectively negotiate for you if they won’t negotiate for themselves?
Don’t be afraid to ask questions about commission, like how your agent splits it with the buyer’s agent and how it’s broken out from there. Many agents split their commission with their brokerage and pay fees, franchise costs and any out-of-pocket costs they incurred. You might think an agent walks away with three percent of the sale, when in reality they may actually only get about one percent of it after fees and taxes.
What is a flat-fee agent?
Most agents are still paid by commission, but more real estate agents are offering their services for a flat fee. The 2020 Profile of Home Buyers and Sellers found that three percent of seller agents were compensated by a flat fee, compared to 92 percent who were paid by commission.
A flat-fee agent charges one set fee for their services. This can range from $99 to $8,000, depending on the brokerage and the price of your home. Your contract with the agent can be for an indefinite amount of time, a set number of months or some flat-fee agents offer a pay-per-day version.
While you may pay less to your agent overall, you generally receive far less in services than a commission-based agent. A regular agent will work with you on pricing, help stage your home, find and schedule a photographer, create and print marketing materials, advertise online, pay for a lockbox, list your home on the MLS, manage open houses, track showings and feedback, negotiate offers, help manage the inspection, work with your lender and closing agent, review all contracts and of course, handle anything that happens. They may also be helping you buy a house at the same time!
A flat-fee agent may only offer the basics, such as listing your home on the MLS, putting up a ‘For Sale’ sign and processing the paperwork. The additional services listed above come at an extra cost to you. Flat-fee agents might be good options for experienced sellers who just want to list their home on the MLS and don’t need any further help from an agent.
The classic adage “you get what you pay for” rings true in real estate. As a seller, you want an agent who will provide everything you need from the get-go and proactively handle any problems that might arise, regardless of whether they are paid by commission or a flat fee. Don’t be afraid to have a candid conversation with your agent about commission so you can understand it better.
4. Can you sell my home within a specific time frame?
One of the first questions your listing agent will ask you is, “What is motivating you to move?” Whether it’s building your dream home, moving to a new school district, upgrading for more space or selling it all to travel the country in an RV, almost everyone has a specific time frame in mind for selling their home.
Talk to your agent about your timeline and the non-negotiables. Are you building a new home that is closing on a set day? Do you need to be moved in somewhere new before the school year starts? Are you totally flexible and can move whenever you sell? Your agent needs to know to help guide you through the process.
Your agent can tell you, based on their experience and market knowledge, what it will take to achieve your goal in a set time. If you have to move as soon as possible, be prepared to move quickly with getting your home listed and be prepared to accept one of the first good offers you receive. If your goal is to move quickly, your agent will probably advise you to be aggressive with your pricing and that you won’t have as much time to hold out for or negotiate a really good offer.
If you don’t need to sell as quickly as possible, your agent can give you an estimate of how long it could possibly take based on how many days comparable homes stayed on the market before selling. Nothing is a guarantee, as your agent will tell you!
Looking for more market information about how long it can take to sell your home? Check out these local market reports for more about average sale price, days on market and number of price reductions.
5. Can you help me buy and sell at the same time?
According to the 2020 Profile of Home Buyers and Sellers from the NAR, 54 percent of recent sellers used the same agent to sell and buy at the same time. If you are selling in order to move into a new home and don’t already have a buyer’s agent, you can absolutely use the same agent to buy and sell.
Should I buy a new home first or sell my old house first? It’s a common question most sellers have to ask themselves. This is a complicated question because the answer isn’t the same for everyone. There is no right or wrong way to buy and sell at the same time, just the strategy that works best for you. Your agent can go over the pros and cons of each option and how it fits your needs. We also have a complete guide to buying and selling at the same time. It’s a deep dive into the tactics and pros and cons of buying first, then selling and selling first, then buying.
6. What is dual agency?
Dual agency is when the same real estate agent works with both the buyer and the seller in a transaction at the same time. Dual agency can also apply when the buyer’s agent and seller’s agent are members of the same brokerage. You should ask your agent if they engage in dual agency for several reasons:
- They may have buyer clients who are interested in your home. Most agents work with clients on both the sell- and the buy-side. Your agent is helping you sell your home but could have other clients who are looking to buy. If your home suits their needs, it will make it a little easier to get your home sold. Your agent may also know of potential clients from another agent in their brokerage. It can give you an advantage when it comes to finding buyers.
- Both parties have to agree to dual agency. Both you and the buyer have to sign papers agreeing to your agent representing both sides (or working with an agent from the same brokerage) to show you understand what it means.
- Your agent still has a responsibility to you. Some sellers may be uncomfortable with the idea of dual agency. If your agent is representing the buyers as well, how can they avoid a conflict of interest? It’s difficult but possible! If your agent is acting as a dual agent, they still have a legal and fiduciary responsibility to represent your best interests as the seller. Your agent cannot share privileged confidential information with the buyer- and vice versa.
Before you work with a listing agent, talk to them about dual agency, what it means and how it can affect the sale of your home. It’s essential you understand the nuances of dual agency before agreeing to it.
The 6 Questions Your Listing Agent Wishes You Would Ask
Most clients are quick to ask some of the questions listed above, especially “How much can I sell my home for?” There are a few more questions you might not think to ask your agent and we’ve listed them here.
1. How are you different from other agents?
This is a great question to ask so you can learn more about what makes your listing agent unique. It could be their knowledge of the local market, their connections to other agents, their marketing skills and any other number of factors. Asking this question gives you and your agent the chance to connect and get to know each other better.
2. How much experience do you have?
There’s nothing wrong with asking this question! It’s a great way to find out how long your agent has worked in real estate and what kind of challenges they’ve overcome for their clients. This is a chance for them to share stories about the homes they’ve sold before, especially in your market. If they are somewhat new to real estate, this is also their chance to show what else they’ll bring to the table.
3. What’s going on in my area?
All real estate is local. You might be reading about record-high home prices in your state, but your neighborhood data could tell a different story so don’t assume anything. Talk to your agent about what is happening in your area. These are some market-specific questions you can ask:
- What homes are selling and what homes are not?
- What is the average sale price?
- How many days on average are homes staying on the market?
- How many times on average are prices reduced before the homes sell?
- What’s happening in this area that could affect my home selling?
Find out as much as you can about what’s happening in your area so you can be prepared for the selling process.
4. How will I get feedback after showings?
This is not something most sellers think to ask their agents beforehand, but it’s important. After each showing to a potential buyer, your agent can reach out to the buyer’s agent and ask for feedback about your home. It’s not a given that you’ll receive feedback and the other agent won’t automatically offer it most of the time.
But it helps you understand what potential buyers are thinking as they tour your home. So ask your agent what the process is for feedback, how soon you should expect to receive it after a showing, and how to evaluate the feedback you receive.
5. How do I prepare for showings?
We’ll talk more in-depth about staging and showing your home in another post in the Home Seller series. But this is a good question to ask your agent before you list your home. Your agent will likely tell you that you have to live like someone could turn up at your doorstep to view your home at any minute- because it really could happen!
That means your home needs to be depersonalized, clean, potentially staged, and ready to show at a moment’s notice. This also means you need to be prepared to pack up the kids and pets to leave the house whenever a potential buyer plans to see it. Your agent can talk to you more about showing expectations.
6. How flexible do I need to be?
Flexibility is key when it comes to selling your home, especially when it comes to showing. Your agent will talk to you about the best times to make your home available for showings. If you work from home Monday through Friday then you might need to be flexible about showing your home at night and on weekends. If you are working in an office or otherwise away during the day, are you able to go home to clean up and take the pets out of the house before the showing?
It can be stressful planning your work and home life around showings. But the more flexible you are the better. Buyers need to be able to see your home, even if it’s not always convenient for you.
You Chose Your Listing Agent- Now What?
Once you’ve interviewed an agent, asked all of the questions above (and more of your own!) and learned everything you can about selling your home, it’s time to sign a listing agreement.
A listing agreement, otherwise known as a seller’s agency agreement, is a document that states that you agree to work with a specific listing agent and pay a set amount of commission from the proceeds to be split between the listing agent and buyer’s agent. The agreement outlines the listing agent’s fiduciary responsibilities and obligations to you.
It also includes the initial listing price of your home, a list of excluded items that will not be sold with the home, and sets a listing term. Essentially, you are giving your agent a set amount of time to sell your home. If at the end of the term, they have not sold your home, you are free to move on and work with a different agent or renew your listing agreement with them.
Am I locked into a contract? Can I fire my listing agent?
If you decide that you no longer wish to work with your listing agent, you can stop working with them. Your listing agreement may include the terms for ending your relationship with your agent. If it doesn’t, you can talk to your agent about ending the contract or contact the broker of your agent’s firm. The broker manages the agents that belong to the firm and should be a helpful resource for discussing any issues you’re having and how to end your contract. They want to maintain their firm’s reputation and help both you and your agent avoid a bad situation. They may be able to help you find another agent within the brokerage or you can take your business to another company altogether.
There may be an early termination fee for ending the contract or the agent may ask you to cover any out-of-pocket expenses they’ve incurred for their work up to that point. Whether or not you pay can depend on your contract and how much work your agent has already done for you. If you try to terminate your contract after the agent has already found buyers, you may still have to compensate the agent with the agreed-upon commission.
Listing agreements vary by state and city so before you terminate a contract with your agent, you should speak to a lawyer to better understand your contract and options.
Once I sign a listing agreement, what comes next?
Once you’ve found a listing agent you like and have signed a listing agreement, it’s time to list your home on the MLS and get it ready to show! Your agent will work with you to create a timeline for the next steps based on your motivation and goals.
You and your agent will discuss any improvements you need to make to your home. This can range from small touch-ups, like refreshing paint or planting flowers, to redecorating your home or staging it. Don’t be offended by the changes your agent suggests! You don’t have to make all of them, but remember that they have the experience to know what will attract buyers and look best.
Your agent should also hire a photographer to take photos of your home, which will require you to clean, de-clutter and depersonalize your home. We’ll talk more about this in another post.
An important discussion to have before listing is to plan the timing of your sale. Do you need to sell before you can buy? In the low-inventory market we’re currently in, your agent may suggest you house hunt first and make a subject-to-sale offer on a new home before you try to sell your current one. If you’re selling at an affordable price point, your home is likely to sell quicker than you think. Give yourself enough time to plan your move! You and your agent can discuss the best time to list your home so that you can sell and move on a timeline that works for you.
A good listing agent is your best ally, tool and resource for navigating the stressful and sometimes emotional process of selling your home. Take the time to talk to friends and family about agents they would recommend and find a listing agent who understands your goals and timeline. The questions provided here should help you better understand your listing agent’s experience and game plan for selling your home.
In our next post in the Home Seller series, we’ll talk about buying and selling at the same time and how to strategize with your agent.