Working with an agent: the discussions you’ll need to have
Here are some standard house-selling conversations to prepare for.
Choosing an agent isn’t the end of the story. In fact, it’s just the beginning.
This person, or team of people, will be a trusted partner going forward, but you’re still going to play an important part in the sale itself.
Even with the perfect agent, it’s inevitable some disagreements will crop up. To help, we’ve produced this handy guide to negotiating some of the most common decisions you’ll have to make with your agent.
Note, we aren’t going to talk about how to negotiate commission with a real estate agent here, we’ve got specific advice for that in another post.
Decision 1: the method of sale
There are different methods of selling a property in New Zealand, including auctions, tenders, deadline sales and sales by negotiation. One of the first things your newly hired agent will ask you, is which of these you’d prefer.
Chances are, based on their industry knowledge and impression of your home, they’ll already have an idea of what they think is right. However, they should be able to explain how each of the sales techniques work, their pros and cons and give you examples of previous results from different methods.
The things you should consider when negotiating a method of sale with your agent include:
1. Do you have a strong opinion?
If you really don’t mind how your house is sold, it’s probably best to go with the agent’s suggestion. If they’re promoting one method over the others, there will be a reason for that, most likely linked to getting the best price.
If this opposite is true, and you really don’t see yourself enjoying one method of sale (auctions spring to mind!) then make sure to communicate this to the agent from the outset.
Your agent should be able to run through the different methods of sale with you.
2. What’s popular in your market?
Do some research – an important step in selling a house is getting a feel for the local market. How much have similar properties sold for, and what methods of sale did they use?
3. Where do your agents’ skills lie?
Even if you’re not particularly keen on a specific method of sale, consider compromising if the agent has an amazing track record of selling in this way. Of course, don’t put yourself in a position where you feel really uncomfortable, but be open to the conversation.
Be warned, some agents will feel very strongly about selling in a particular way, and might try to pressure you into going their route. Sometimes, this is because selling in a certain way will increase the amount of commission they get from their agency (note, it won’t impact the amount of commission you pay them). But the agent is obliged to tell you if a certain way of selling will earn them extra money.
What do the experts say?
Unlimited Potential agent, Jennifer Temm Munns, says: ”There are a lot of vendors who don’t like auction, and there’s nothing wrong with selling by negotiation, but just make sure that the agent you choose has that expertise.”
Another Herne Bay agent comments, “I always ask the owners if they have a preference. For some, they’ve auctioned and it was fabulous. For others, they say: “No it didn’t work for us.” He’ll give them the market statistics for the different choices and leave the decision with them.
Decision 2: setting the sale price
Depending on which method of sale you choose, you’ll likely need to set a sale price or reserve price.
When you first met the agent, they should have provided you with a written estimate of your sale price. From here, they’ll usually give you a range of prices to consider as well as info on recent sales in the area. These are known as “comps”, and will help you with price setting.
You may have decided on price, but remember your agent won’t be emotionally attached to your home as you are and may be more clear-eyed about naming a price which will encourage people through the door.
If there are differences of opinion between you and your agent on the sale price, it’s important to have a full and frank discussion about where you’re both coming from. This way you’ll hopefully be able to reach a happy middle-ground where everyone feels comfortable.
Setting the sale price is one of the most important decisions you'll make when selling a house.
Decision 3: the marketing strategy
Early on, you’ll discuss the strategy for the vendor paid advertising (VPA) which you’ll have to agree on with your agent. This is when you decide on which channels you’ll market your home to, depending on the buyers you’re targeting.
You’ll likely look at a mixture of digital advertising and specialist property publications among others, depending on the groups likely to find your home of interest. Any information you can bring to the table on the types of people who’ve expressed interest in your home in the past, will help, so come well-equipped.
Whether or not you have open homes is another decision you’ll negotiate with your agent. Vendors liked having private viewings with pre-qualified buyers during Alert Level 3 of Covid-19 and enjoyed not having to vacate their homes every weekend. Certain vendors may want to continue with this, but most agents will push for a return to open homes.
A tech savvy agent will be able to leverage a range of marketing channels to sell your home.
Decision 4: when offers start coming in
Lastly, but very importantly, responding to the offers that come in for your home, is a key time when your agent shows their negotiating nous. As the offers go to and fro, it could be that the buyer asks for certain things to be paid for following an inspection, or for you to throw in certain chattels, such as curtains or whiteware, as a sweetener. You’ll be having many conversations throughout this process with your agent and your relationship will be truly tested.
It’s a good idea to come up with a list of items that you’d be open to throwing in the pot during this period, as this will speed up the process of responding to offers and negotiating.
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