How to Choose a Seller's Agent in St. Louis
Choosing the right listing agent might not prevent your home from selling during a hot seller’s market. However, it can make a big difference in the experience a homeowner has selling his or her home. It can also affect the eventual sale price, the amount of money a homeowner pours into renovations and how quickly the home sells. Of course, there is always a cost to employing the services of a professional. Listing agents do typically charge a commission -- often between four and seven percent of the home’s sale price. Homeowners can choose to list their home as “for sale by owner” but could run into issues without professional aid. Though one might wish to avoid paying commission to a realtor or real estate agent, doing so saves the homeowner from expensive mistakes and lost time. For instance, the right seller’s agent will help weed out unqualified buyers and skillfully negotiate in a way that takes years of experience. While hiring a listing agent is usually worthwhile, picking the wrong realtor could result in an unpleasant experience. From looking in all the right places to interviewing several local options, follow below for our five tips to choosing a seller's agent in St. Louis.
Understanding the Current St. Louis Housing Market as a Homeowner
According to Zillow, “Missouri home values have gone up 11.6% over the past year.” The average home in Missouri was valued at $168k in April 2020. As of April 2021, the average home in the state was valued at $188k. St. Louis’s housing market is even hotter, according to recently released data from Redfin. Redfin -- a public real estate brokerage site -- notes that the average home in St. Louis has increased 16.8% since this time in 2020. A typical home in St. Louis spends thirteen days on the market and sells for two percent over its listing price. Redfin’s “St. Louis Housing Market” describes St. Louis’ housing market as “very competitive,” with many homes receiving multiple offers -- “some with waived contingencies.” In St. Louis, homes that receive more interest -- dubbed “hot homes” -- can sell “for about 8% above listing price and go pending in around 4 days.”
What is the Difference Between a Seller’s Agent and a Selling Agent?
Before researching the right seller’s agent for their home, homeowners should understand the difference between a selling agent and a listing agent. While both are real estate agents and some might be associated with the National Association of Realtors, they perform different functions. Listing agents -- sometimes called “seller’s agents” -- assist the homeowner while selling agents assist the buyer. According to Elizabeth Weintraub in her article “Listing Agents and Selling Agents—What's the Difference?” for The Balance, “a seller's agent (sometimes called listing agent) lists a property for sale and represents the seller.” Conversely, “a selling agent brings buyers to the table, and represents the buyer.” In some cases, listing agents will not accept a buyer’s offer but will only work directly with another agent. Occasionally, the selling agent and the listing agent -- aka “seller’s agent” -- might come from the same brokerage or firm.
What Does a Listing Agent Do?
In her article “What Is a Listing Agent and Do You Need One?” for Ownerly, Dori Zinn explains exactly how seller’s agents help homeowners sell their homes. Zinn writes that listing agents help homeowners through every step of staging, listing, marketing and -- finally -- selling their homes. Listing agents are typically local, well-versed in the surrounding housing market and ready to dedicate their time and expertise to your property. Seller’s agents will also tell you “what you need to set your home up for a successful sale and strategies for competing in a busy market.” Before selling your home, listing agents will often work with a staging company and professional photographer to put your house’s “best foot forward.”
Zinn writes that because “the vast majority of buyers use photos to gauge their interest, high-quality photos are a major factor for many listing agents.” In addition to staging and marketing your home, listing agents also help determine the listing price of the property. Towards the end of the process, the listing agent “helps navigate serious offers and works on your behalf to showcase your home and negotiate with potential buyers.” Finally, the listing agent will handle all associated “paperwork and work with you through the closing of the sale.” When the transaction closes, your listing agent will typically receive a commission between four and seven percent of the value of your home.
How Real Estate Commissions Work?
According to Jean Folger and Chip Stapleton in their article “How Much Do Real Estate Agents Make?” for Investopedia, real estate agent “commissions generally range between 4% and 6% across the country.” Commissions may be lower or higher depending on the market. Folger writes that the seller usually “pays the commission unless the buyer and seller negotiate a split.” Listing agents will often include their commission in the asking price of the home, “so it can be argued that the buyer pays at least some of the commission in either case due to the higher asking price.”
Referencing data from Bankrate.com,ListingBidder.com notes that “a total commission of 6.0% is typically asked for by ‘full service’ agents working for the big national real estate firms in St. Louis, Missouri.” However, commissions are not set in stone. In his article “The Real Estate Commission: A Guide to Who Pays, How Much, and More” for Realtor.com, Daniel Bortz writes that “there are no federal or state laws that set commission rates—meaning commission is negotiable.” Though paying a lower commission might seem more attractive initially, homeowners should keep in mind that lower commissions might result in less marketing and lower effort from the agent.
Is Hiring a Real Estate Agent Worth the Cost?
Working with a listing agent might cost some homeowners more in the long run due to the commission owed upon sale, but it might end up costing other homeowners less. Emma Diehl explains in her article “The Cost of Selling a House With a Realtor: We Did the Math” for Homelight. Diehl writes that listing your home with an agent “is like hiring an accountant to do your taxes or getting a lawyer to draft up your estate plan.” Homeowners are essentially paying “a professional for their skills and services to accomplish a task where otherwise you might be a little (OK, a lot) over your head.” This is why the vast majority -- almost 90% -- of homeowners choose to sell with an agent rather than listing for sale by owner. When determining whether it is worth it to them to work with a listing agent, homeowners should keep in mind that their agent will not get paid until -- and unless -- the house sells. Once the home sells, your agent will likely split his or her commission with their broker and with the buyer’s agent. In addition to closing costs and agent costs, homeowners should expect to also pay title fees, real estate transfer taxes, escrow fees, taxes on the property and potentially reconveyance fees as well. In general, the value of hiring a listing agent versus selling on your own comes down to the expertise of the agent. All in all, Diehl writes that Homelight’s data “indicates that the more expertise your agent brings to the table, the more likely they will be to fetch you a higher sale price, offsetting what you spend on commission.”
Risks of Listing Your Home FSBO
In her article “8 Reasons to Choose a Real Estate Agent Over ‘For Sale By Owner’” for Investopedia, Amy Fontinelle underscores the value of hiring a listing agent to help with the sale of your home. She writes that “in most cases the risks of going it alone likely outweigh the benefits.” These risks include “having few potential buyers (let alone qualified buyers), making emotional decisions, not knowing how to negotiate properly, and not having enough free time to dedicate to finding a buyer.” The largest risk Fontinelle identifies when trying to sell without an agent is “not having the experience or expertise to navigate all of the legal and regulatory requirements that come with selling a home.”
In addition to the above, listing agents usually have a much wider network of connections than the average homeowner. Quoting NYC real estate broker Pej Barlavi, Fontinelle writes that “‘a good real estate agent should have a Rolodex of names and contact information.’” Because of this, “‘they can quickly spread the word about the property they just listed.” However, homeowners typically have “a smaller pool of potential buyers” because of their lack of connections. This smaller pool “means less demand for your property, which can translate into waiting longer to sell your home and possibly not getting as much money as your house is worth.”
Five Steps to Choosing a Seller's Agent in St. Louis
#1 Search for Agents in the Right Places
When trying to find the best representative for your home, explore every avenue and take advantage of every open opportunity. Ask friends and neighbors about their experiences. Go on social media, exploring Instagram and Facebook for realtors, real estate agents and brokerages in your area. Read online reviews and look for special designations when appropriate. The Zillow post “How to Find a Good Real Estate Agent to Sell Your House” suggests relying heavily on recommendations from friends, family and neighbors -- especially those who recently sold their homes. Zillow’s post explains that “a referral is the most common way sellers find their agent, at 31 percent of sellers.” Referrals offer insider information and create a more comfortable environment in which to ask questions. For instance, homeowners might feel more at ease to ask someone they “trust about the specific agent, their style, what they liked about them and what they didn’t.”
In her article “How to pick the best real estate agent to sell your home” for The Washington Post, Amanda Abrams suggests searching online. Abrams recommends homeowners read through “agents’ online reviews.” Homeowners should “look to see whether the agent works full time, because a full-timer will conduct more transactions than a part-timer.” They should also keep an eye out for designations like “CRS” after each agent’s name. Though not required, these designations could speak to the agent’s experience and expertise. Abrams writes that the CRS designation in particular is awarded by the National Association of Realtors. It signifies that the real estate agent has “a large volume of home sales and a reservoir of real estate knowledge.”
#2 Determine Which Type of Agent You Want to Hire
Next, determine which type of agent you want to hire to help sell your home. In the article “How To Find The Best Real Estate Agent For Buying Or Selling” for Money Under 30, Zina Kumok explains the difference. She writes that “a real estate agent is a licensed professional who has to take an exam in order to sell and buy homes on behalf of a client.” Real estate agents could become real estate brokers by receiving extra training and taking the brokers’ licensing exam. Agents always work under a broker and brokers might have more than one agent under their license at one time. Realtors are similar but different to both real estate agents and brokers.
While a realtor will always be either an agent or a broker, “an agent or broker is not necessarily a realtor.” Kumok notes that realtors are specifically defined as members of the National Association of REALTORS®. The NAR is “a specific group that has their own set of standards” beyond state and local regulations. The value of hiring a realtor is that “these rules include disclosing any potential conflicts of interest, not interfering in a transaction and disclosing all fees and commissions ahead of time.” Such requirements might not apply to real estate agents.
#3 Don’t Be Scared Away by a High Commission
Next, homeowners should never shy away from a realtor, broker or real estate agent because he or she charges a high commission. In her article “How to Choose a Listing Agent” for The Balance, Elizabeth Weintraub explains why. She writes that “the biggest mistake home sellers make when choosing a listing agent is selecting an agent based solely on two factors.” These are “the highest list price for your home and the lowest commission.” While Weintraub writes that sellers typically “want the highest possible price and to pay the lowest commission,” this is not always beneficial to the seller. Weintraub notes that the two have “very little to do with hiring a competent agent and, in many instances, are completely irrelevant.” First of all, listing agents hoping for a higher commission based solely on the sale price of the home -- not on their percentage -- might “distort the truth” about your home’s potential. To avoid a scammer, Weintraub suggests opting only for agents who offer a range of potential sale prices.
Just as agents charging a lower commission might actually end up costing you more, agents charging a higher commission might end up costing you less. Choosing an agent who charges a higher commission can very well be an advantage. According to Weintraub, “by choosing an agent with a large advertising budget and company dollars to match it, you might gain greater exposure to a larger number of buyers.” This could result in more competition and a higher sale price. To make a long story short, homeowners should do their homework, speak with agents and never turn away a potential hire just because of their commission fee.
#4 Interview Several Local Options
Fourth, avoid hiring the first agent you meet. In her article “How to Find the Best Listing Agent” for NerdWallet, Linda Bell recommends each homeowner “interview at least three agents.” Opting for a less experienced agent could end up costing homeowners a lot of cash in the long run. Writing for Homelight in the article “How to Choose a Real Estate Agent for Selling Your Home: Finding the Perfect Match,” Presley Attardo writes that “the top 5% of real estate agents across the U.S. sell homes for as much as 10% more than the average real estate agent.” Despite this, “75% of recent sellers hired the first agent they interviewed to sell their home.” Instead of hiring the first agent recommended by a friend or discovered online, interview a few agents before making a decision. This way, you can “choose the best real estate agent based on experience and personal connection.”
#5 Ask Lots of Questions
Lastly, ask lots of questions when interviewing each potential listing agent -- and keep asking questions throughout the entire process whenever necessary. In her article “How to Choose a Great Listing Agent” for HGTV, Jennie L. Phipps offers a series of vetting questions to sellers. Her list is based on one created by Alison Rogers -- real estate agent and author of Diary of a Real Estate Rookie. First, Phipps suggests asking each interviewee “how much they think they can sell your home for” and how they will market the home. Next, ask about their personal work experiences. Ask both how their business and the market have evolved, what their specialties are and how long they have been working in the industry. Finally, ask what they expect of the homeowner during each stage of the process and how much they charge on commission. Homeowners might also ask to speak with a prior client of each agent to better gage the agent’s working style and personality.