How to Get Real Estate Listings
Finding Listings as a Real Estate Agent
- Think about the market. In high end real estate markets like New York or San Francisco, you will need to spend money on meals and cards to finesse upscale clients. For low end markets, you might want to lower your commission and use the internet to find a variety of clients and focus on volume. New agents, without connections, might want to build on personal connections.
- Build a database. You should build a database of contact information for people you know who could be clients. This includes friends and family or anyone with whom you have had a business relationship in the past. Offer to provide an estimate of the value of their home.
- Most people are interested in knowing how much their home is worth. If they find that it is worth much more than they believed, they might be inclined to sell. Even if that is not the case, you have established a relationship with someone who might be inclined to get in touch with you when they do decide to sell.
- Send holiday or anniversary cards to individuals in the database. This will remind them about you and encourage them to get in touch when they want to relocate. If you send a card for the fifth or tenth year anniversary of the date on which you secured a property for a former client, you might find that they are back on the market.
- Look for expired listings. The MLS retains information for owners who have taken their property off their listings. Many of these owners might have been unable to sell their house at a reasonable price during the market downturn. If you contact them with good news about the prospects of their sale, you might find that they are interested in putting the house back on the market.
- MLS listings are available at www.MLS.com.
- Network at open houses. When you stage an open house to advertise one of your current listings, you will meet a number of potential clients. Attendees are quite probably looking for an agent to help them buy a property, but might well be looking to sell their own property as well.
- Search Zillow’s Make Me Move database. Zillow offers a service by which potential sellers indicate that they would be willing to sell their house if it reached a certain value. Search the database for people whose properties might have accrued enough value for them to sell.
- Look at rentals. Properties are often put on market for lease because the owner wasn’t able to sell the house for as much as they would have liked. Now that the market has improved, it is possible the owner will reconsider selling the property. Contact them and offer to assess the value of the property.
- Visit houses with “for sale by owner signs.” The owner here has decided to go it alone, but might be reevaluating that decision if the home has languished on the market for some time. Inform the owner that for sale by owner houses are often ignored by buying agents, and that with proper advertising you can sell the house for more than they can.
How to Cancel a Real Estate Contract
Canceling a Contract With Your Agent
- Recognize the difference between buyers and sellers. If you are in the market to buy a house, it should be easy to break off an arrangement with a real estate agent. As a seller, however, you will find that your agent has invested considerable money toward advertising your property and might be disinclined to let you go. To maintain a good record of customer service, most will allow you to end the relationship, but you could encounter some difficulties.
- Look for an opt-out clause. These clauses are common with large, national companies. They allow you to exchange one agent at the company for another. If you have a problem with the individual, but are content with the company, this is a relatively painless way to rectify the situation.
- Other contracts include a termination fee, which allow you to void the contract completely for approximately $300 to $500.
- Talk to the agent. Most sellers become dissatisfied with their agent because of a failure in communication. It is possible that issues can be resolved in a conversation. If not, the agent will likely allow you to leave contract.
- Discuss whether you want to break the contract with an agent because you have decided not to sell your home, or because you are not happy with the service the agent is providing.
- If there are no provisions in the contract for voiding the agreement, you will often need to negotiate over a termination fee. The agent might ask you to cover the expense of advertising.
- If you do negotiate an early end to the contract, be sure to get the agreement in writing that all of the stipulations of the original contract are void. Oftentimes the original contract will have provisions that would allow the broker to receive commission if you sell the house independent of him.
- Wait until the contract is voided. If the agent is unwilling to free you from your contractual obligations, you can simply wait until the contract is voided. Most such contracts are valid for no longer than 6 months.
- If you manage to sell the house during the contract period and you have an exclusive right-to-sell agreement, the agent will be owed a commission, even if you brokered the exchange without their active involvement. But, if it is an exclusive agency agreement or an open listing, you may not have to pay commission to the broker. Be sure to review the listing agreement to determine the commission liability.
- Most brokerages allow a cancellation of the listing agreement without question. If a listing agent has put considerable effort and money into it and the seller wants to cancel before the listing expires, then the listing agent may attempt to be reimbursed but if the listing agreement has no mention of that, then the seller is not obligated.
- Find violations in the contract. If the agent is unwilling to release you and you do not want to wait for the contract to expire, the only remaining option is prove a breach of contract. If you can prove that the agent did not perform tasks that are outlined in the contract, you may be able to legally break it.
- This should be a course of last resort, because breach of contract will ultimately need to be proven in court. It is extremely rare that your agent would be inclined to take you to court over a contract. However, alleging breach of contract can quickly escalate the situation.
Canceling a Contract to Buy a Property
- Notify your agent immediately that you plan to withdraw from the contract. Whether or not you will be able to cancel your contract without substantial penalty to yourself will often be contingent upon how quickly you act. The rules for cancellation are generally specific to your particular contract. Your agent should be familiar with these provisions.
- Cancel at will before signing. Although you have offered a verbal agreement and a bid for the property, this is not binding until all parties have signed a contract. Have your agent or attorney write a formal purchase contract cancellation agreement to the representative of the seller.
- Though you should not have paid a deposit at this phase in the process, if you have, the letter ought to indicate that the money will be returned. Once the letter is received, the contract will be considered void. At this point, the rescission will state who the deposited earnest money will go to, whether it’s the buyer or someone else. Once the seller agrees to the terms of the rescission, the buyer should get the earnest money back.
- The letter should include basic identifying information about the exchange, including the address of the property, the date of the contract, and the name of the parties involved.
- Review the contract and title report closely. Ask questions of the title officer if anything is unclear. A buyer can choose to cancel a contract with a title contingency in just about any type of sale except for a sheriff’s sale. Buyers should do some advance research about these properties. A buyer will typically have 5 days to cancel the contract once they receive it, but the contract can stipulate something else.
- For instance, make sure the offer states “once received.” If it is only issued to the agent and the agent is out of town for 3 days then you now only have 2 days to review. Review the contract thoroughly for what the contingencies are protecting you for and make sure the timelines are appropriate before giving it to the seller.
- Look for “right of rescission” provisions in the contract. Most contracts specify a certain period of time during which the buyer is permitted to void the contract. Generally, the buyer will have 3 days to cancel the contract after receiving the disclosures. Other rescissions are based on specific contingencies in the contract.
- Refuse negotiations. In cases where there is some damage to the property or the assessment has come in below the purchase price, contingencies kick in and the buyer has the right to request a revision to the contract or rescind. If either of these situations occur, refuse the negotiations in order to legally get out of the contract.
- For example, with an inspection contingency, the buyer may request repairs or a reduced purchase price. If the seller disagrees, the buyer may choose to rescind. If you are a seller trying to terminate the contract with the buyer, do not allow the requests made by the buyer.
- The buyer can choose to purchase or rescind the offer based on a failed inspection but only the buyer is allowed to cancel the deal at this point and have any earnest money returned. If the seller does not do what the buyer wants, there is a good chance the contract will be rescinded by the buyer but they could still continue to purchase it and waive the inspection contingency.
- With a low appraisal, the buyer has the right to request that the seller lower the purchase price. However, the seller may refuse, in which case the buyer can decide to rescind or pay the extra amount required to make the down payment percentage required, as long as the request or rescission was made prior to the contingency expiring.
- Use contingencies. Although they vary with each contract, every real estate contract should include some contingencies upon which the buyer is able to void the contract. Most contracts allow the buyer to conduct a property inspection and ask for revisions of the contract if there is physical damage to the property. Similarly, if you are unable to get funding from the bank or the appraisal determines that the property is priced too high, the contract may be rescinded.
- However, the buyer still has a right to bring in more money if the appraisal was low, as long as they qualify with the lender at the higher purchase price and they have more money to put down. The buyer must choose to rescind the contract before it is terminated. The buyer will be given a period of time to review the regulations if they checked it off in their offer and the seller accepted it in the offer. This is one of the contingencies that are available to all buyers.
- In the case of foreclosures and REO properties, a buyer may or may not be allowed any contingencies but generally, in a traditional sale, a buyer may request this. The seller can refuse any contingency in the offer before the contract has been mutually executed.
- Keep in mind that the offer was already placed and accepted by the seller. There is no offer in place to reject. The buyer must use this contingency and rescind the contract if they take objection after reviewing the association rules and other documents requested. They are generally issued as a part of the title report but if it is new construction, the builder or agent of the builder typically provides them.
- Other contingencies that sometimes appear in contracts include: inability to find sufficient insurance at the price rate the contingency specifies (generally ½ of 1% of the purchase price) and the discovery of liens against the property that cannot be cleared, called a “Title Contingency.”
- Be prepared to lose your deposit. If you have allowed your contingencies and right of rescission to expire before breaking your contract, you may lose the earnest money deposit that you put in escrow. The purchase and sale agreement will state what the remedy is if the buyer defaults on the contract. Typically, the earnest money will go to the seller, but it can be the seller’s choice if that’s what is stated.
- Though losing the deposit will be painful, in some sense it protects you by freeing you of any further obligations. The alternative is that the seller can sue for “specific performance.” Although rare, this would force you to do what you promised in the contract, essentially making you go through with the purchase of the property.
- Because real estate contracts are generally solidly written, those who break them will invariably lose if the case goes to court.
- Consult with a lawyer about cancellation. If you have decided that you can cancel the contract on acceptable terms, you should immediately consult a lawyer or your agent. Have them void the deal under terms defined by the contract. Act quickly to save your opportunity to claim contingencies.
Cancel a Contract to Sell a Property
- Consult your attorney and real estate agent. As a seller, you have fewer opportunities to cancel a contract than a buyer. The consequences of breaking the contract can also be more severe. You should immediately seek professional assistance.
- Review the contract for a “kick-out clause.” These are relatively rare. However, some contracts include clauses that stipulate that the seller can escape from her contract if she manages to find a buyer willing to pay more for the property. Such clauses are only valid for a period of time specified in the contract.
- This clause will only, however, allow you to replace one buyer with another. If you have changed your mind about selling the property, this clause might not be the escape route you need.
- Be attentive to buyer failures. Often the contract stipulates that the buyer is supposed to fulfill a contingency by a specific date. You can use this to your advantage. If, for example, the buyer fails to get financing within a particular time span, you can use this as justification to void the contract.
- In order to successfully employ this strategy, you’ll need to request that the buyer prove that there’s a loan commitment in place. If the buyer has defaulted on this contingency, then the seller can demand a default and termination of the contract.
- If the contingency has passed already, the buyer will not be able to use it to rescind and get the earnest money back.
- The seller can demand a two day waiver of financing once the contingency has passed and demand a rescission if the buyer will not waive it. A buyer can still buy the property though if they waive the financing. They may have someone give them cash to purchase it. A seller can only demand a rescission when the buyer is in default of the contract terms.
- Be prepared to pay. If none of the aforementioned strategies are available to you, you will need to offer a financial settlement. The buyer has the full legal right to sue you, forcing you to sell the house and pay damages. However, depending on her disposition, she might not be inclined to engage in the necessary legal battle. You will need to offer a settlement large enough to dissuade her from following such a course of action.
- In these cases, the buyer has good standing to sue for “specific performance,” which would compel you to proceed with the sale. However, such cases often take years and are extremely expensive. Most buyers would prefer to take a payout. You will need to negotiate over a specific sum.[
How to Find a Good Real Estate Agent
Finding an Agent with the Right Credentials
- Look for someone who does at least 1 or 2 transactions every month. When reviewing an agent’s credentials, look for someone who’s been working in sales, negotiations, and contracts for at least five years, preferably in real estate or property management. Five years experience and a regular stream of transactions means an agent likely has a good feel for the process and can help find you the best deals.
- Agents with less experience can still be a good choice if they know you and the area well, especially if they demonstrate a great work ethic and strong customer service skills.
- Find someone who works in your area. The agent you work with should know the area in which you’re looking to buy or sell. Agents who live and work in your area will be aware of the best neighborhoods and trends regarding prices. A local agent will also know small details, like where the best schools are, commute times, and so on.
- Check the agent’s license. Obviously, you want an agent who’s properly licensed. Every state should have a list of licensed agents online. While making a list of agents to contact, check to ensure every agent you interview has a legal license to buy and sell real estate in your state. You can also see the continuing education classes they are taking which will help you to know what their focus is.
- Look for awards and honors to help narrow your choices. Check a real estate’s website and resume for awards, honors, and other signs of recognition. Things like a “Realtor of the Year” award can be a sign of a quality agent who’s likely to exceed your personal needs. However, realize that it may also indicate a very busy Realtor who may not be the right choice if you’d like more individual attention and you may need to base your decision on other indicators.
- Ask friends and family members for referrals. If you know someone who recently bought or sold a home, reach out to them. Friends and family members are likely to give you honest assessments of their experience with a particular agent.
- However, be cautious about choosing an agent ONLY because a friend or family member recommended them. Your real estate needs and what you desire in a Realtor may be different so make sure you understand what exactly your friends or family’s objectives were and what specifically they liked about their Realtor. Ask about any hesitations the person has recommending the agent as well. This way, you’ll get a sense if the agent has any major flaws that would be a deal breaker for you.
Interviewing Real Estate Agents
- Ask how long they’ve been in business. When interviewing a real estate agent, one of the first questions to ask is how long they’ve been handling sales, contracts and negotiations for clients. They should be able to answer the question quickly and accurately. Remember, while five years of experience is ideal, someone with less experience who otherwise meets your needs may still work if you’ve developed a good rapport with them.
- Also, ask how long the agent’s been working in your area. Even better, ask if they live near the area. An agent with extensive experience may not be the best choice if they are not familiar with your particular area.
- Ask if they work alone or in a team. Agents who work alone are best if you want a lot of personal contact with the agent. Agents who work on a team are good if you like the idea of specialists for each step. The agent you hire may actually be a team leader who will then introduce you to a transaction coordinator, assistant, or buyer’s agent who will handle those parts of the transaction.
- Agents who work alone are more likely to walk you through each step themselves and more likely to reach out frequently by phone or even in person.
- Ask about any planned vacations or other commitments. Real estate often requires quick action and response time. If a Realtor has a vacation planned soon or some other commitment that might interfere with their availability, you need to decide whether this will affect you buying or selling a property. Make sure they have someone to help you out if they will have an extended absence.
- Ask about what other properties they’ve sold. In addition to looking at current properties online, have the agent show you some of the other properties they’ve sold. Make sure these properties are similar to what you’re looking to buy or sell. It’s vital to pick an agent who works with the right properties for your needs. If the agent is typically used to working at a higher, or lower, price point, they may not understand your particular transaction as well.
- If you’re selling a home, ask where the home will be featured. The main places you’ll need to be is on the MLS and the big online sites (Realtor.com, Zillow, Trulia, etc…). Other sites, including the agent’s personal website aren’t as important. Also, beware of an agent who wants to keep your house off the MLS for any reason. Unless you are selling a luxury home, the MLS is where most buyers, and their agents, are. “Pocket” listings or similar are generally suggested when an agent wants to market your house first to their own investor clients or to others in their brokerage, but limiting the exposure is almost never a good option for you as a seller.
- Contact their recent clients. Ask for a list of references after meeting with an agent. A quality agent will not hesitate to hand you a list of recent clients for you to call to ask about their experience. Call a few references for every agent you interview to make sure they have stellar reviews. Don’t put too much stock in online reviews. Most people will give a 5 star review in exchange for a Starbucks gift card and a single bad review may not tell the whole story (ask the agent if you’re concerned).
- Make sure you get along with the agent. Chemistry is important in real estate. If you’re working with someone who you don’t get along with, this can cause unnecessary tension during an already stressful process. Make sure you click with the agent and feel comfortable in their presence.[
Watching for Red Flags
- Avoid agents who don’t answer their phone or return calls. A good real estate agent considers their work a full-time job and knows that weekends and evenings can be the busiest times. In real estate, every day is a “business day” and if crucial items come up on evenings or weekends, you need an agent whom you can reach. An agent who isn’t available throughout the day may not be your best option.
- If an agent does not answer during “regular business hours,” you may have an agent who is doing real estate on the side. Their “day job” may not allow them to give you the attention you deserve.
- Conversely, an agent who doesn’t answer evening or weekend calls, or worse yet, has a voicemail that states anything about “the next business day,” may not be available when you need them.
- Stay away from agents who don’t know the area. If an agent does not work in your area, or cannot readily provide information about the area, this is a bad sign. A quality agent should be able to quickly rattle off things like neighborhoods, general price ranges, nearby businesses, and so on. If an agent cannot provide specific details about an area, you may want to find someone who knows it better.
- Check that lower commissions don’t mean fewer services. Typical commissions are usually between five and seven percent. When agent offers a lower commission, make sure they aren’t offering you less service than higher commissioned agents. Before signing a contract, verify that all of their promises are in writing.[
- When buying, you don’t usually have to worry about the commission because the seller generally pays both sides (buyer and seller) so focus instead on customer service and contract knowledge.