The Decision-Making Process for Real Estate Agents

As a real estate agent your day to daily tasks can be challenging. You face complex decisions when guiding your clients through the buying process.

How does an estate agent make a decision?

We assume that you are, or aspire to become, an estate agent if you are reading this. For the purposes of this discussion, let us assume that you are able or willing to offer a maximum of two properties at any given time. However, you are approached by a greater number of interested parties than you are able to accommodate. As a real estate agent, you are required to make two significant types of decisions:

• Accepting an assignment
• Selecting an interested party

Accepting an assignment

For accepting an assignment it is important to consider a number of key criteria.

Your own experience

You will not take any risks and broker properties that you are not familiar with, which can be a challenging line to navigate. There are already differences between apartments and single-family homes, with the former tending to present greater challenges. In the case of an industrial building, for example, contaminated sites can be an issue. If you have no experience with this, the risk is higher than with a detached house.

This criterion should use the Likert-4 scale.

The terms of the contract

An exclusive contract is certainly a more interesting contract than a non-exclusive one.

The "Exclusive" attribute can be designated
as either "Yes" or "No.".

Commission

The level of commission is certainly a factor to consider. If there are additional benefits beyond the legal framework, the effort is worthwhile.

The commission is a number, the higher 
the better.

Costs

Additional costs should be kept to a minimum. These include expenses incurred by the estate agent, such as advertisements in the press or online. If the property can be sold without any additional costs, this is the optimal outcome.

The costs are a number, the lower the better.

Conflicts of interest

Conflicts of interest arise when there are other dependencies or relationships between the individuals involved. It is advisable to avoid such situations wherever possible.

In this context, the "true or false" option
can be used to indicate whether a conflict 
of interest exists.

Legal Framework

It is of the utmost importance to adhere to the legal framework, including the effectiveness of contracts and compliance with legal requirements, in all circumstances. Furthermore, additional contract drafting with buyers and sellers can offer additional benefits.

This criterion should use the Likert-5 scale..

Decision for a mandate

This list outlines six fundamental criteria for a mandate. Additional criteria may be included as needed. One key benefit of this approach is the ability to evaluate all criteria quantitatively. The number of options can range from two upwards.

The second decision for a real estate agent presents a more complex challenge.

Selection of a prospective buyer

As a real estate agent, you should consider the following criteria when evaluating prospective buyers for a property

Financial aspects

Creditworthiness

Check the financial situation of prospective buyers to ensure that they can afford the purchase price.

As there are gradations here, the Likert-5 
scale should be used as the attribute.

Proof of Financing

Is proof of secured financing available, e.g., a bank confirmation or a preliminary credit decision?

A "Yes/No" designation is appropriate for the
"Proof of Financing" attribute. 

General Conditions

Contact Details

Serious interested parties are expected to provide complete contact information. Please confirm that this information is complete.

The "Data available" attribute can be 
marked as "Yes" or "No." 

Questionnaire

It is recommended that interested parties complete a questionnaire in order to ascertain their motivation, price expectations, and financing options.

Motivation

This is where the process becomes more complex. It is not possible to indicate motivation with a number or a rating. It is preferable to assess prospective buyers’ motivation by comparing them in pairs.

The motivation of at least three interested
parties is evaluated in comparison to one
another. The "AHP" attribute is used to 
compare interested parties in relation to 
the "Motivation" criterion.

Accuracy of fit

In this section, we evaluate the extent to which a prospective buyer aligns with the property’s requirements.

As there are gradations for "accuracy of fit," 
the Likert-5 scale can be used as an attribute.

Intended Use

It is important to consider whether the prospective buyer’s plans align with the property in question. Does the prospective buyer’s intended use align with the seller’s intentions?

It is also possible to evaluate the relative importance 
of the intended use of at least three interested parties,
weighing their respective interests against each other.
The AHP attribute is used to compare the interested 
parties with regard to the intention to use criterion.

Family Needs

It is important to assess whether the size and layout of the property are suitable for the prospective buyers’ family needs.

As there are varying degrees of "family situation," 
the Likert scale of 4 or 5 can be utilized as 
an attribute.

Temporal aspects

What time frame can I expect?

Willingness to buy

Assess the speed with which the interested parties are prepared to make a purchase decision.

The Likert-5 attribute is also appropriate for 
the "willingness to buy" criterion.

Flexibility

Consider the flexibility of interested parties with regard to the handover date.

Furthermore, the Likert-5 attribute can be employed 
for the "flexibility" criterion.

Personal impression

Your personal impression is often decisive, but difficult to grasp

Communication

Pay attention to the quality of communication and the reliability of interested parties.

The communication of at least three interested 
parties is evaluated and compared. In order to 
evaluate the criterion of communication, the 
interested parties are compared with one another 
using the AHP attribute.

Sympathy

Consider the personal impression made by the interested parties.

In particular, likeability is a highly subjective 
criterion that cannot be easily quantified. This is 
why the AHP method is the most appropriate one to 
use in this case. The likability of at least three 
interested parties is evaluated and compared. 

Additional factors

Some more factors may be important:

Bidding procedure

If there are several serious interested parties, you can carry out a bidding process to achieve the best possible price.

The "Bidding procedure is possible" attribute can be 
evaluated with a simple "Yes" or "No" response.

Seller’s wishes

Please also indicate any special requests or criteria of the seller that extend beyond the basic sales price.

The "Yes/No" attribute can be used to indicate whether 
the seller's wishes have been taken into account.

Decision

The decision for the buyer is to provide a recommendation to the seller regarding the estate agent. It is crucial for the seller to heed the recommendation provided by the estate agent, given their extensive experience and specialized knowledge in this field. In the event that the seller does not accept the broker’s recommendation, it may be concluded that the broker made an inappropriate decision when accepting the mandate, as discussed in the initial section.