1. How much will it cost?
This first step is key. Many sellers that use real estate agents, don’t work out how much it’s going to cost them. They simply agree to pay 5% commission because “It’s standard for the area”. If you are agreeing to pay 5% commission, then calculate how much that will cost you (plus GST). Remember that when you sell your home, it’s tax free money. If you are paying $15,000 to $20,000 to an agent, then also calculate how long would it take you to work to earn that (after tax). For example, if $1,000 is deposited into your bank by your employer on a weekly basis, that means, for a $20,000 commission, it would take you 20 weeks to earn that (5 months!).
Tip: If you think it’s outragous to pay an agent $20,000 to sell your home (which could be like you working full time for 5 months) then look for an alternative.
2. Is the listing contract breakable?

Before signing your rights away, make sure you understand if the listing contract is breakable or not. Most are not. This means that if you sign with an agent for 3 months, and he does nothing, then you have no way of breaking the contract. This could be very costly.
Tip: Make sure that the agent adds a clause that says that the listing contract is breakable, by you, at any time. The agent shouldn’t worry because they still will maintain rights to a buyer that saw the home while it was listed (hold over period), so there is no reason that they would object to the clause.
3. What will the agent do for their commission?
You should ask for a detailed, written, list of items that the agent will do in order to sell your home. Remember that if you are agreeing to pay 5%, which will amount to a lot of money, you should know what the agent will do to earn that money. Will your agent be present when buyers come to the home? If not, how will the buyers know about the important qualities of you home?
Tip: Try to put a value on the items that the real estate agent will do. Ask yourself is it worth it or is there an alternative?
4. When will appointments be scheduled?
Your agent will most likely provide a lock box so that a different agent can show the buyers around your home. Your agent will call you before the other agent arrives. You will want to know how much “warning” time will your agent provide. Will the appointments be anytime? Anyday? Does this mean that you have to keep your home clean 24 hours a day, 7 days a week?
Tip: When you sell privately, you control the visits and appointment. Many private sellers simply schedule visits on the weekend during set times. This allows them to live their life during the week, clean their home Sat/Sun morning and then accept buyers at a convenient time.
5. What price will be asked for the home?
If you are asking $400,000 and then sell for $390,000, then that means that you will take home $369,525 (assuming 5% commission). When you are using an agent, you really need to calculate how much you will keep from the sale of your home. You need to know your “bottom price”. Remember, if you drop your price by $10,000, then it costs you more than $10,000, but it only reduces your agent’s commission by $500. Large drops in price affect the seller a lot more than the agent. Sellers also need to understand that if they agree to sell their home with an agent for $400,000 and an agent brings a solid offer at that price, then they have done their job. The agent might have a right to the commission whether you accept that offer or not (check the fine print of the listing contract).
Tip: When you sell privately there is no commission to pay and you are in complete control. If you don’t want to accept an offer, you are under no obligation to do so. You also have more flexibility on price. If you wanted to sell your home for $400,000 with an agent, you would only take home less than $380,000. If you sold privately, you could sell for $400,000 and keep $400,000. You could even sell for $390,000 and you would still save $10,000.