How to choose agents

Would your real estate agent chase a buyer down the street to get a sale? If not, choose another, is the message from Barry Plant Group boss Barry Plant when asked how prospective vendors find an agent.

"Someone who will go the extra mile, chase a buyer down the street is the person you want working for you," Mr Plant said.

It may sound like A-grade sales spin, but mother-of-two Sharon Breeze, who has sold homes three times using traditional agents and a vendor advocate, agrees.

"Absolutely. They have got to be prepared to run," Ms Breeze said.

In 2006, Ms Breeze was a "time-poor" mother who, wanting to sell her Moonee Ponds home, engaged vendor advocate Keyhole Property Investments to liaise with agents on her behalf.

Last year, she asked Brad Teal Real Estate to sell her three-bedroom house in Ascot Vale.

Three weeks ago it sold for $795,000 - $35,000 more than its reserve price when passed in at auction in December, and a result she described as "very satisfying".

How did she do it? How did she pick an agent who sold for a price beyond expectations?

Here are the experts' tips:

SPREAD THE NET

The best way to start your search is to cast your net wide.

Check local newspapers for at least three agencies: ring them and make clear you want to sell and would like to meet to hear their proposals; pay attention to how the receptionist handles your call - does he/she happily offer to pass your inquiry to the boss? In today's market, many agents are reporting big dives in listing numbers, so they should be eager to earn the right to sell your biggest asset.

"Go to at least three agents - major leading brand names - then pick a small one, too," JPP Buyer Advocates' Ian James suggests.

Ms Breeze did exactly that, approaching four local agencies before ruling out one candidate because she did not like their billboards.

"Some people contact 10 agents ... always ring at least three agents, so you can make a comparison," Mr Plant said.

LOCAL KNOWLEDGE

Nobody knows your market better than the real estate agent based in your market. They should have sold similar properties and should have a list of potential buyers on file.

"Use a local agent, do not use an Eltham agent if the property is in Bayswater," Mr James said.

Mr Plant agreed: "You want an agent who is always literally 10 minutes away."

THE INTERVIEW

You have lined up at least three face-to-face interviews with prospective agents. Watch the agent's body language. Do they look over-confident, under-confident? Do you feel rushed? Are they well-presented?

Morrell & Koren buyer's advocate Christopher Koren described the experience of a real estate agent interview as "like letting a wolf in your front door".

"You need to be well-prepared, know what to expect before you invite a selling agent into your house, what to ask, what to avoid to stay safe," Mr Koren said.

COMMISSION

An agent's sales commission depends on the property's price. It is negotiable.

Do not let it be the chief deciding factor when picking an agent, experts warn.

Expect to pay between 1.5 per cent and 2.5 per cent of the sale price if your home is valued at more than $400,000.

It is common to pay 3 per cent of the sale price for properties under $400,000.

Be wary of agents prepared to list your home for commission of 1 per cent or less.

Mr James said some agents were "desperate" for listings this year and were "basically buying them" by agreeing to lower payment.

He suggested sellers offer agents "a kicker", whereby an agent gets an extra payment if they can secure a sale above a set price: "But make it a possible bonus if you want it to prove motivating."

WHAT TO ASK

Right, grab a pen and paper.

Frank Valentic, of Advantage Property Consulting, suggested direct questions about agent marketing strategies and negotiation skills.

"Ask why should we choose your company and who will be looking after me personally?" Mr Valentic said. "Do they have much property expertise and how many other clients will my agent be managing?"

Home sellers must press agents for evidence of "runs on the board", Keyhole Property Investments director Melissa Opie said.

"Ask what similar properties the selling agent has sold recently and what was the result," Ms Opie said.

"I bet if Cathy Freeman was to compete now for gold, she wouldn't be on the podium at the end of the race."

Ms Breeze's chief question was: "What are you going to do to sell my house in this quieter economic climate?"

"The agent I ended up with was very clear from the start about their plan and could back it up with a list of prospective buyers and a solid marketing plan," she said.

Will the grants stop – market comment from Michael McNamara

The June deadline for first home buyers to cash-in on the boost to grants is fast approaching but will this be their last chance? Michael McNamara isn’t so sure.

The rush is on, many first home buyers (FHBs) will be hurrying to make their first property purchase before June 30th 2009, fearful that they will miss out on the maximum benefit from the (FHOG).

Really though, it’s not the end of the world if FHBs don’t find the right property in the next few months. Personally, I will be quite shocked if the government chooses not to extend the scheme. Let me explain.

In these challenging times, the economic need to keep an active and vibrant property market is as necessary as it has ever been. Remember, that when people buy and sell homes they support a whole bevy of service industries - real estate agents, removalists, conveyancers, pest inspectors, classified advertising and builders, to name a few. Property buyers also add retail demand by buying furniture, white goods, plants and hardware.

However, what is more front-of-mind for governments is the impact that property market health has on credit markets. Apart from the opportunity to write new business, healthy property markets ensure that the balance sheets of all our banks stay strong.

For example, if we experienced plunging property values like the US has, our banks would surely suffer write-downs to their assets. Because they are leveraged, banks would have to tighten credit markets by an even greater amount than the asset write-down as they try and maintain the same capital adequacy ratios.

Further credit rationing would, of course, affect what people can borrow, which in-turn affects house prices and then you have a classic feed-back loop that radiates throughout the whole economy. No wonder economies around the world are trying to stimulate property markets.

Just recently, the Obama administration launched a US$275bn housing market stability plan. In the plan, he launched a three-pronged strategy. The plan is to help borrowers re-finance to cheaper rates, assist those facing foreclosure with repayment relief and to provide further liquidity to credit markets.

Obviously, keeping the property market rocking along is essential if developed economies are to get back on track. So, is it really conceivable that the Rudd Government will let the extension to the FHOG expire after June 30?

I don’t think so. In fact, I wouldn’t be surprised if there are more announcements for further new programs to come. Programs that will be earmarked to encourage property transactions and put a floor under prices announced in the upcoming May budget.