Category

Choosing an Agent

Signing a Listing Agreement?

When you choose a real estate salesperson to sell your home, you will be required to sign a listing agreement – a contract in which you agree to allow the salesperson to sell your home during a given period and at a given commission rate. The agreement says that you will pay the Real Estate Professional a fee when you sell your home. Most real estate salespeople are independent contractors who work for a company operated by a licensed real estate agent. (A salesperson is licensed to sell real estate through an agent. An agent is licensed by law to sell real estate to others for a fee and employ salespeople and other brokers.)

The amount of compensation you pay an agent is negotiable, but the real estate salesperson will usually have to follow the company’s policy regarding compensation. The amount of the fee will be spelled out in the listing agreement. Make sure you understand how the fee will be paid before signing.

Exclusive listing
Most real estate salespeople will ask for an exclusive right-to-sell listing. This means that you will owe them a commission regardless of who finds a buyer during the listing period. In other words, if you decide to sell the house to your cousin, your broker still gets a commission. The advantage of this kind of arrangement is that the salesperson is motivated to work harder to sell your home.

It’s possible that a salesperson from another company will find a buyer for your home. In that case, your agent is the listing agent, and the second agent is the selling agent. In this case your listing agent will agree to pay the selling agent a fee from the amount you pay the listing agent.

It is important to clarify with your listing agent/salesperson that they are willing to “conjunct” as not all listing agents will agree to share their commission with another agent.

 Length of listing
The listing agreement will specify how long you agree to list your house with a company. In New Zealand the standard period for a listing agreement is usually 90 days. You are entitled to opt for a shorter if you wish.

Remember that the listing agreement is a contract. You should get a copy for your records. Your Real Estate Professional is bound to the terms just as you are.

If you change your mind after signing an exclusive listing agreement you can cancel the agreement, in writing, by 5pm on the first working day after having received a copy of the agreement from the salesperson.

Choosing an Agent

Q: I’m looking at selling next year and wondered if you have any advice on how to choose the best agent to sell my home? Steve H.
A: What a great question – especially to ask a real estate agent! We cover this off pretty thoroughly in our book ‘SOLD, How to Sell Your Home for the Best Price’, so I’m sending you a copy. For everyone else reading this here is a bit of a summary.
Before you choose your agent think about what is most important to you: the best price, the simplest transaction, the shortest sale time, the least stress, or probably a combination of some of these.
The next step is to interview at least two agents, preferably from different agencies, to see how they will meet your requirements in terms of what is most important to you.

Many people focus too much on the commission when in fact all agents are relatively close in terms of fees – the important thing is to get the best sale price. The same goes for marketing: Money spent on a comprehensive marketing campaign will come back in spades when you attract more people to your open homes, resulting in more bidders at auction, and a higher price.
Here are some of the questions you should ask your potential agent:

  • What is your listing to sales ratio? This is a great way to measure how good your agent is: If they sell over 90% of the properties that they take to market then you can be sure they know what they are doing, and it also means they will stick around when the going gets tough.
  • What is your marketing plan? It’s easy to do just the basics – everyone puts the property on TradeMe and realestate.co.nz, in the Property Press or the local paper. You want a plan that covers all the bases: Print, web, and social media, professional photography and video. The more people that see your property the more buyers you will have and the more money you will get.
  • How do you use technology to reach potential buyers? Facebook is especially useful for getting your property more profile and every agent should have a strategy for this.
  • How will you communicate during the sales process? This is very important. It’s easy for an agent to forget that this is a really important transaction for you, and to leave you in the dark – very frustrating for you! Make sure you have, at a minimum, a written report every week, and a call after each open home to keep you in the loop.
  • How important is it for you to like the agent? It’s very important for you to have rapport, if you don’t you won’t be able to communicate well enough and you really need to know everything that there is to know about the sale of you house.

Finally, remember, the agent works for you, the seller, and everything he/she does has to be with your best interests at heart, as long as it’s within the law of course!


Today we have the second part of our answer to Steve H’s question last week on how to select the best agent to sell your home. Point one last week was that the agent who charges the lowest fees and/or the least marketing is NOT necessarily the agent who will put the most money in your pocket at the end of the sale. Many people focus too much on the commission when in fact all agents are relatively close in terms of fees – the important thing is to get the best sale price. The same goes for marketing: Money spent on a comprehensive marketing campaign will come back in spades when you attract more people to your open homes, resulting in more bidders at auction, and a higher price.

Here are some of the questions you should ask your potential agent:

– What is your listing to sales ratio? This is a great way to measure how good your agent is: If they sell over 90% of the properties that they take to market then you can be sure they know what they are doing, and it also means they will stick around when the going gets tough.

– What is your marketing plan? It’s easy to do just the basics – everyone puts the property on TradeMe and realestate.co.nz, in the Property Press or the local paper. You want a plan that covers all the bases: Print, web, and social media, professional photography and video. The more people that see your property the more buyers you will have and the more money you will get.

– How do you use technology to reach potential buyers? Facebook is especially useful for getting your property more profile and every agent should have a strategy for this.

– How will you communicate during the sales process? This is very important. It’s easy for an agent to forget that this is a really important transaction for you, and to leave you in the dark – very frustrating for you! Make sure you have, at a minimum, a written report every week, and a call after each open home to keep you in the loop.

– How important is it for you to like the agent? It’s very important for you to have rapport, if you don’t you won’t be able to communicate well enough and you really need to know everything that there is to know about the sale of your house.

Finally, remember, the agent works for you, the seller, and everything he/she does has to be with your best interests at heart, as long as it’s within the law of course!