Real Estate Article: Should I hire an agent base on price or value?
03/08/2006

Selling a house is one of the most important transactions a person will undertake in a lifetime. As a seller there are many important factors you must take into account when selling a property. The first and foremost decision a seller must make is choosing an agent. Most sellers choose an agent based on the price they must pay in order to hire an agent. Statistics have shown that only about 15% of sellers sincerely want to pay a cheaper price for their agent. The other 85% actually want greater "value" over a cheaper hiring price.

    Now, a key question comes into mind. What is value? Value is a combination of both the end result and the process throughout your transaction. It is your chance of achieving a successful transaction and the number hardships you must face in order to achieve success. Many sellers are often mislead by the "bargain" price of hiring a particular agent or company. Nowadays, in addition to the traditional full service real estate agents, there are a number of alternatives to choose from. There are companies that just walk you through the process, discount rate services, and many more. What most people forget is that the price you pay for an agent ultimately constitutes the value you will receive in the end. An experienced, reputable agent will usually charge the standard full service rate because they are offering you their years of experience and professionalism. The discounted rate agents are usually either new to the field or ones that have been working for a while but haven't achieved much success. You can save good amount money hiring a cheaper agent, but you must remember that the agent offers his or her services at a cheaper price for a reason. There is a very good chance that this agent lacks experience.

    An agent's experience and professionalism determines the value you will get during your transaction process. Selling a property requires a substantial amount of worked which needs to done in a timely fashion. A cheaper, inexperienced agent will greatly lower your chances of a successful transaction for a number of reasons. First off, your ability to attract a seller is highly dependant on your agent's experience. If your agent does not have proper marketing techniques, you cannot maximize your properties exposure, and without an adequate amount of exposure, your property might not even attract any qualified buyers. Also, selling agents are usually more willing to work with reputable agents who are known to be experienced and easy to work with.  Second, even if you manage to attract a buyer, if your agent is unable to complete the steps of a real estate transaction efficiently, the buying party might get fed up and back out of the deal. If they miss any deadlines for contingencies and such, it puts you as the seller at a disadvantage, giving the buyer more opportunities to back out of the deal without any penalty.  In addition, most selling agents want to keep there options open. An experienced agent will be able to tell how serious a buyer is just because they've been put in many similar situations in the past. If you hire an inexperienced agent, who has no idea that the buyer merely sees your property as a backup option, you may end up wasting a lot of time negotiating with someone who doesn't even end up wanting your property.

    You might think that if your transaction fails, you don't end up losing anything because its not like you have to pay the agent when your property that hasn't been sold. That is definitely the wrong mentality. Not only do you lose the time you spend on trying to sell your house but you also lose the value of your property at that given point in time. The real estate market is constantly fluctuating which means that prices are continuously changing. One month your property could be worth $400,000 and the next month only $370,000. That would lead to a loss of $30000, an amount far greater than the money you would save on the price of hiring an agent. Even if an inexperienced agent does manage to sell your property, you could still lose in terms of value. If your agent lacks knowledge or experience, your transaction process could turn out to be a very stressful one filled with hassles and problems. Your property will indeed be sold in the end, but you give up a lot of time and energy that could have been better spent.

    An experienced will maximize your chance of success and make it as easy for you as possible. They won't miss deadlines or make any careless errors that lead to failed escrow. An agent who has standardized methods of helping you sell and excessive knowledge of the field and the are they work in will bring you the greatest value. They may be more expensive to hire but what would you rather have? A cheaper hiring price or an agent that will bring you value and a satisfying transaction process?

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