What is the single worst way to choose a broker?
As has been said may times, the purchase or sale of a home is one of the most significant financial transactions that most of us will ever be involved with and, in some ways, the most complex. It requires a set of skills that is somewhat unique in our daily lives and can often both try our sanity and challenge our perceptions.
Having said that, the service that you need and deserve begins with finding a broker that you have faith in, can trust and who will be your working partner and counselor during the sales process.
I am always chagrined when people seem to start off very positively step by interviewing several brokers, only to eventually make their choice for the absolutely wrong reasons. In reality, the choice should revolve around criteria like past performance, rapport, knowledge of the market, honesty, etc. However, instead, it appears that it is often made (at least on the listing side of a transaction) based on what the broker said they could get for the property.
A sample scenario might often run something like this: a prospective seller will speak to four Realtors. Three of them will suggest a probable price between $320K & $330K based on extensive analysis and investigation. However, the fourth suggests that they "could" get $350K based on a hunch. After due deliberation, they elect to list their home with that person’s hunch rather than the professionalism of the others. The sad part of the story is that the last agent may often be the least qualified of those interviewed and may well be engaging in the rather tawdry practice of "buying a listing" (a simple strategy built around telling a homeowner what they want to hear, not what they need to hear).
The truth is that most homes ultimately sell for what the market will pay and that no broker can really promise to get a better price than another. Frankly, there is simply no broker who has a special cache of naïve buyers who will be willing to pay above market value for a home (although I do remember that one time, back in ‘93, when…….). However, what a good broker may be able to do is to improve a seller’s yield during negotiations if the situation provides the opportunity and certainly improve the speed of the sale.
The saddest part of the story for those who select a broker based on price is that they may ultimately settle for less than they could have gotten initially, had they followed better advice. This often occurs because their home will likely languish on the market for a while after Realtors "file it" as overpriced. Eventually the homeowner, either short on time or under other pressures will then accept a lesser offer. Unfortunately, in the interim, they will have incurred added months of carrying costs and suffered other impacts as well.
The moral, hire a broker for the right reasons. Those that start with performance history & honesty.