The Listing Agent-Cum-Investigative Reporter

The Home Seller – Realtor Interview (aka “Listing Presentation”):  What Agents Need to Ask Homeowners

[Editor’s Note: The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway, or any other entity referenced. If you need legal advice, please consult an attorney.]

When it comes to listing presentations — essentially, a job interview to represent prospective home sellers — most people think of questions for homeowners to ask Realtors.

Things like, the Realtor’s average market time to sell a home; how many homes they sell annually; and those homes’ average sales price as a % of asking price.

But, good Realtors know it’s a two-way street.

Long before their marketing skills come into to play, prospective listing agents first need to be good investigative reporters.

What’s the first thing they need to determine?**

A. How much the owner owes on the home (i.e., what their mortgage balance is).
B. Whether they have legal authority to sell the home.
C. How much the owner wants to list for (assuming they have a price in mind).
D. What repairs are needed.

Correct Answer:  “B.”

Qualifying Prospective Sellers — and Their Timetable

Here’s the explanation:

A. That would have been the correct answer a decade ago, when short sales — so-called “underwater” properties, where the mortgage exceeded the home’s fair market value — predominated in the Twin Cities housing market.

These days . . . not so much.

While there are still underwater properties out there, the more usual explanation now is either serial refinancing, or, a short tenure in the home (less than 2-3 years) coupled with very little down when the owner bought (a feature of FHA and some other loans).

B. Correct.

Step #1 is to determine if the putative client and home seller is in title on the home they want to sell.

Step #2?

Determine if anyone else is.

All in Due Time

When a married couple is selling a home pursuant to a divorce, or multiple family members each have a partial interest (common when the owner has died, and the home becomes part of their estate), the listing agent must take care to make sure they’re hired by all stakeholders.

Alternatively, the would-be listing agent needs to wait on the sidelines until the additional owners have surrendered any interest they may have, typically by executing a quitclaim deed.

C. Even talented, experienced agents are unlikely to help Sellers fetch significantly over fair market value.

If the Seller is contemplating an unrealistic list price, the Realtor needs to flush that out as quickly as possible.

The Realtor’s two options in such a scenario?

Either: 1) prevail on the owner to list at a lower price, after sharing relevant market data with them; or 2) failing that, decide if they want to take the listing.

D. Needed, but . . . not immediately.

Unless the local municipality or the Buyer’s lender says otherwise, homeowners may typically assign responsibility for needed repairs to the Buyer, post-closing.

However, when that’s the case, the list price needs to be discounted appropriately.

Sellers and listing agents need to address this issue early on, so that everyone is on the same page regarding pre-list prep, projected list price, the local point-of-sale inspection (if applicable), and any “As Is” Addenda accompanying the sale.

**Arguably, the very first thing the prospective listing agent needs to establish is the Seller’s motivation.

That is, are they genuinely selling (vs. simply curious about their home’s fair market value), and if so, what is their timetable?

Only once that’s addressed is it appropriate to do the legwork involved in a thoughtful (vs. rote) listing presentation.

See also, “Which Projects Home Sellers Can Leave For the Buyer — and Which Ones They Can’t“; “Listing Agent Rule #1: Get the Listing“;  “The Serenity Prayer — Realtor’s Version”; and “Knowing When to Pass (on an overpriced listing).“

Plus: “Perils of Overpricing Even (Especially) in a Rising Market“; “The Centrifugal Force(s) Roiling American Politics, or, “Demographics, Self-Selection & Political Gridlock”; “Realtors vs. Politicians”; and “Political — and Real Estate — Incumbents.”

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