Selling a House - Picking an Agent

[Angelica Vargas]

Hi everyone at Bigger Pockets

My family has decided to sell our 2 family house in Queens. I have a bunch of agents interested in selling the property. One of them wants us to sign an exclusivity agreement.

I'm not opposed to the idea but I want to be sure it ends up on the MLS (which means they might have to share their commission with another agent) and the property gets sold in a timely manner at a good price.

What do you look for in a good real estate agent?

What pitfalls should we look out for with contacts?

Also, anyone in NYC area have more specific tips?

Many thanks!

[Jason Lee]

You should definitely sign an exclusive listing agreement for a couple of reasons. The main one being MLS's and many listing aggregator sites do not allow open listings to be posted. The next is that you want someone incentivized to pay for marketing (professional photography, floorplan, mailers, maybe staging, etc).

Depending on where the house is located you'll want it listed on either the REBNY/RLS (which covers western Queens closer to Manhattan) or LIBOR/MLSLI (which covers most of Queens but to the east). Most agents belong to one or the other, but there are some agents that belong to both. There are areas that have some overlap but if you get listed in the wrong MLS your potential buyer pool could be drastically reduced.

As for finding a good agent, I'd start with one that has demonstrated history of having closed deals as a listing agent. Sounds obvious, but most real estate agents in NYC make a living doing rentals. For those that do sales, it's typically the most seasoned or experienced that get exclusive listings. A quick verifiable way to gauge experience is to ask about sales volume in the prior 12 months. A seasoned agent in NYC should have sold at least a few million, especially if this is closer to Manhattan. Look at their past listings. Do they show nicely with great photography, staging, and decluttering? Do they have thoughtful, well written listing descriptions?

The two main things to look out for in the exclusive listing agreement are the commission and the length of the agreement. A shorter agreement is better for owners and vice versa. Most agents try to get one year. I usually do 6 months. I don't agree to less because I spend money on professional photography, virtual staging, and even some renovations. Commissions get tricky. There's not much transparency and most sellers don't understand how they work. Most real estate boards require agents within the board to cooperate and split commissions in half. Agents are not required to split commissions with agents outside of their board. Some do, some don't, and it's like the wild west in Queens. Obviously, it's a huge disservice if a listing broker will not offer commissions to buyers broker as that cuts down the buyer pool dramatically. Also, most boards require agents to split the commission 50/50 with other agents in the same board unless the owner agrees to something else. Some listing agents get their owners to agree to something else without explaining the pitfalls. I've seen a lot of listings in Queens where the buyers broker is offered 1% or even .5%. They're cooperating, sure, but many buyers agents probably won't bring their clients to that listing. Meanwhile the seller really has no idea what's happening. Or, there are sellers that just want to try to save money on commission and offer something really low. I get it, it can be a large sum, but as the saying goes, you often get what you pay for. Yes, you can find an inexperienced agent or bottom feeder to take a listing for next to nothing, but you're probably not going to get good results. We're in a softening market now where many developers are actually raising commissions.

I can go on and on about these topics but this hits most of it.