I made the decision to hire my first real estate agent in five minutes: less time than it took me to pick out a nail polish shade at my last pedicure. I didn’t interview anyone else, I didn’t question the five per cent commission she charged and I didn’t ask for any references. After all, she was a family friend – so I figured she’d do a good job. Turns out, like so many people out there, I made a lot of mistakes. People don’t always realize how much you end up paying for an agent’s services and why it’s important to be careful who you hire – consider that the fee on a $600,000 house sold by an agent charging a five per cent fee is $30,000 (split between the buying and selling agents). Luckily, my agent ended up doing a great job; however, not everyone is so lucky. If you’re looking for an agent to buy or sell your house, here are five mistakes to avoid (note: I made most of them!).
1. Don’t hire the first person you see
You run into an agent at an open house and, bang, you hire them to find you the perfect place or sell your home. Is this a good idea? No way. As with anything, you should shop around. Interview two or three different people and find out how much they charge in commissions, how experienced they are in the market you’re buying or selling in, and how hard they’re willing to work to get and keep your business. Your home is your biggest asset in all likelihood – take the time to make a good decision.
2. Don’t be afraid to negotiate
The average real estate commission in Canada is five per cent. Just because an agent charges a higher fee doesn’t mean they’re better; however, some agents have higher overhead and need to charge more to cover them. If you’d like a lower commission, ask for it – the worst they can say is no. You could also suggest a staged approach based on how much your house sells for. But don’t let commissions be the only driving force behind your hire: some agents might charge a lower fee, but they might do less work in exchange.
3. Don’t hire based on suggested list price
It can be pretty flattering to hear someone tell you your house is worth more than other houses on your street. But this is no reason to hire an agent if you’re selling your home – if he or she lists your house at too high a price, it could sit on the market for months. Make sure you look for someone with experience in your neighbourhood and who can set a realistic price.
4. Don’t hire a friend
It’s never a good idea to mix family, friends and business. If you do hire a friend or family member, make sure you interview other people and make the choice based on the job they can do, not on your relationship.