Principal/Agent Issues – Commission-based compensation – Dual agency issues – where agents represent both buyer and seller – Owner/agent transaction – What happens when agents are also selling their own properties – Terms of listing contract – What you should know about listing contract duration – Impacts of transactions costs on marketing outcomes
Given that most homeowners are infrequent participants in real estate transactions, here are five things you should ask your agent before signing a listing contract?
- How many properties are currently listed by the agent?
As agent inventory increases, effort may be diluted over a larger number of properties. The busiest agent may not always be your best option.
- Does the agent have any personal properties which they are currently trying to sell (owner/agent properties)?
If an agent is concurrently marketing their own properties, they may allocate a disproportionate amount of effort to their property and not the client’s property.
- What percent of the agent’s listings are dual agency sales?
Dual agency sales can be a double-edged sword. It may offer a more efficient transaction if the listing agent is aware of potential buyers. However, dual agency sales are more lucrative and may entice agents to advise the seller to lower price in order to get “both sides of the transaction”
- How many of the agent’s listings are comparable to your property?
This will help the seller understand what other properties the agent has listed for sale that will compete against their property. Remember that real estate agents are compensated on commission and obviously want to sell their complete inventory.
- Is selling real estate the agent’s full-time job?
Part-time agents are generally not as dedicated as full-time agents. Many times they have other priorities. More experienced agents are typically more knowledgeable about the marketplace and have a broader network of resources including potential buyers for your property.
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