Many people have already had the need to resort to the professional services of a real estate agency for the sale of their home or another type of property. And, surely, a good part (or, perhaps, most) had doubts about how to evaluate and select the most suitable professional to sell their property. Is it your case?
I assume that your objective, as an Owner/Seller, is (i) to sell at the best possible price, (ii) in the shortest possible time (or in the most suitable time for you), and (iii) with the greater fluidity and less hassle. Did I get it right?
I leave you here a suggestion of a list of 7 questions that you should ask those interviewing, in order to obtain relevant information to make the right decision for you.
1st question: What is the market value of my property?
What you really want the Real Estate Consultant to tell you is what perspective he has on the best price at which your property can be sold. Am I right?
Bear in mind that there are Consultants who will simply indicate a recommended sale price for your property, and may even give you an estimate of the final transaction price, resulting from an estimated discount on the sale price. And there will be other Consultants who will recommend a selling price based on a Report - which they will call the Comparative Market Analysis - prepared based on a sample of 'properties of the same typology, with similar characteristics, within a radius of x meters in around the location of your property'.
All very well. However, in any of these situations, it will be important for you to realize, as Owner/Seller, whether the Consultant has a clear notion of the most commercially relevant aspects - negative or positive - of the property. It would be good for you to have him share this assessment with you, so that you can understand whether the recommended selling price is based on an effective assessment of the characteristics of your property - that is, what makes it unique - and not just a mere mathematical exercise or collection and statistical analysis. These statistics will be important, but only if the Consultant understands well what he is comparing and analyzing.
2nd question: What marketing strategy should be adopted?
You may consent to the Consultant's recommendation regarding the initial sale price of your property. However, if behind that recommended price there is no well-defined marketing and advertising strategy and a thoughtful and structured plan of action to implement it, then that price could become indefensible.
Talk to the Consultant and ask him to explain the general lines of the marketing and advertising strategy and plan that he believes are the best for marketing and selling your property.
He, most likely, will not hand you a structured and detailed Marketing Plan before establishing a partnership commitment in writing (mediation agreement), but he can and should pronounce on:
his understanding of the target buyer's profile
how your property ranks against competing properties
how your property should position in terms of pricing
what he intends to do in terms of photo and video reporting
which national real estate portals will be advertised on
which international real estate portals will be advertised on
how to physically advertise the sale on the property (signs, tarps)
e-mail marketing directed at the Consultant's contact databases
how to captivate network colleagues and other real estate mediation networks to present the property to their clients
social networks (internet) to be used in the promotion of the property
etc.
3rd question: What support do you have and will you have from your agency and respective real estate mediation network?
If the Consultant has not mentioned it yet, ask him about the size of his agency (in number of consultants) and the number of agencies in Portugal (and the respective total number of consultants). Also ask him about the existence of branches of the same network in other countries. Try to understand the degree of interaction and communication between consultants in the same network on a global scale (national and international). You can always search for this information via the internet, which will be relevant to better understand the capacity and ease of this Consultant in promoting your property through networking in the same real estate network.
The Consultant should also be able to explain to you the support he has from his agency in terms of:
Marketing and advertising, that is, what resources exist or are contracted to increase the disclosure of the property for sale?
Documentary and procedural analysis, that is, does he have permanent support from lawyers or solicitors to monitor the process (from the listing process, to the promissory contract and the deed)?
Bank financing intermediation, that is, does he have someone specialized in obtaining bank financing, in case there are buyers interested in the property, whose acquisition depends on this support?
Education, training and coaching, that is, does the Consultant have someone to turn to in his agency to help him overcome more complex situations?
The answer to these questions will give you a better idea of the support structure that the Consultant has and will have to better achieve the goals of selling your property.
4th question: What contractual conditions do you need to achieve the objectives we propose?
The answer to this question should be consistent with the answers to the previous questions, so it is expected that the Consultant will talk to you about:
1. The need to formalize the partnership – with a view to achieving the proposed objectives – by signing a real estate mediation agreement (with a model regulated by law), in which the second party is you, as Owner/Seller, the first being the Agency (or 'broker') that has the license (AMI) to carry out the real estate activity, to which the Real Estate Consultant is associated.
2. The responsibility will be handed over to the Consultant with regard to the definition and implementation of a marketing and commercialization strategy and plan (in line with you), which involves exclusivity in the promotion of the property, under sole coordination of the Consultant.
3. It will be very important for you that he refers and and shows that - in order to ensure the widest possible promotion and dissemination of your property and, thus, boost a greater number of interested parties (and consequent more visits and proposals) and competition for the acquisition (and consequent better proposals) - the real estate mediation agreement shall explicitly mention the obligation to share the agency's remuneration with other consultants or agencies, duly qualified to do so, that present buyer clients who carry out the acquisition of your property.
4. The marketing and commercialization strategy and plan that the Consultant adopts, in line with you, need time to bear fruit (visits, proposals, closing of the deal). Hence, taking into account the average market time for the sale of a residential property, it is common practice to establish a minimum contractual term of 6 months.
5. Although the Consultant may develop a lot of good preparatory work (pre-marketing) and a very good marketing work, the truth is that the real estate brokerage activity is based on remuneration based on a 'success fee', that is , there is only remuneration for the work carried out by the Real Estate Consultant, if an agreement is reached between the parties (Seller and Buyer) regarding the conditions of sale of the property. There are several commissions on the market, but the most frequently practiced commission percentages are between 5%-6% (plus VAT at the legal rate) on the effective price of the transaction.
6. The Consultant should also mention that, given that most of his work (90% or more) is carried out up to the signing of the promissory purchase and sale agreement, it is common practice in the market to establish that the payment of the brokerage fee is carried out immediately after signing the promissory contract of purchase and sale, provided that there is payment of an amount, as a down payment, by the Buyer and provided that this down payment reaches an amount equal to or greater than 10% of the agreed price for the transaction of the property.
These will be the conditions that guarantee the creation of a satisfactory work base so that the Real Estate Consultant can better develop his work in favor of the objectives that you established with him.
5th question: What do you need from me to achieve the goals we set for ourselves?
It is very possible that the Consultant you interview will tell you that in order to achieve the goals you both set out to achieve - the sale of your property at the best possible price, in the most suitable time frame for you, as a Seller, and with the greatest fluidity and lowest hassle - will need your collaboration on this:
Provision of documentation relating to the property and the Owner(s)
Preparation of the property for sale, namely with some repairs and painting, if necessary
Preparation of the property for the photo and video report
Preparing the property for visits with interested parties
Availability of the property for visits (hourly flexibility, as much as possible)
And still:
Transparent communication (doubts, changes in objectives, changes to the property)
Trust (the Consultant is a partner who is only remunerated if and when the Seller's objectives are met)
Objectivity (as much as possible)
Commitment (from both)
6th question: What kind of communication will you have with me about the process and the results obtained and how regularly will you do it?
A Real Estate Consultant acting in a professional, responsible and competent manner will ensure communication with you on a basis similar to this:
Every 2 weeks (unless you want another regularity) he must inform you about the compliance with the Marketing Plan and its results in terms of visibility and contacts.
At the end of each day of visits, he should let you know about the results of the visits.
Immediately upon receipt, he must report you on the content of the proposals received.
After all, it is a partnership, where regular and transparent communication between you and the Consultant is essential for the successful development of the sales process.
7th question: What differentiates you from any other Real Estate Consultant that justifies my choosing to work with you?
If the Consultant answered the previous questions to your satisfaction or dissatisfaction, then I believe your decision is made, whether or not to hire the Consultant you interviewed. However, the answer to this question may help you to understand how the Consultant positions himself (or wants to position himself) as a professional at your service.
Finally, I leave here, not an additional question, but rather a recommendation:
Mr. Owner/Seller, even if it is about selling a good, a property, this is a business between people, from people to people. Additionally, it should not be forgotten that the sale of a property, especially if it is a dwelling, means partially exposing the private life of the owner(s) to the Real Estate Consultant and third parties. If we also add the fact that this is a sales process that may take a few months, and is not free of difficulties, anxieties and emotions, try to understand when I tell you that the relationship with your Real Estate Consultant must be one of respect, transparency and trust, so it will be important to understand, even during the interview, if you can establish this 'chemistry' with the Consultant to be hired.
Have a property to sell? Do you want to ask me these (and other) questions?
Do not hesitate to contact me:
Marco Moura Marques
+351 967 035 966
marcomouramarques@kwportugal.pt
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