How to Interview an Agent:
Smart consumers interview potential real estate agents before deciding on whom to hire. Just as you are sizing up the potential for a good fit, rest assured that the real estate agent will likely be interviewing you, too. Be wary of agents who don’t ask you questions and probe for your motivation. You wouldn’t work with just any agent off the street, and good agents are just as selective about their clients, too.
Caution: Don’t interview agents from the same company!
1. How Long Have You Been in the Business?
The standard joke is there’s nothing wrong with a new agent that a little experience won’t fix. But that’s not to say that freshly licensed agents aren’t valuable. Much depends on whether they have access to competent mentors and the level of their training. Newer agents tend to have more time to concentrate on you. Some agents with 20 years of experience repeat their first year over and over. Other 20-year agents learn something new every year.
2. What is Your Average List-Price-to-Sales-Price Ratio?
Knowing the agent’s average ratio speaks volumes. Excluding sizzling seller’s markets, a good buyer’s agent should be able to negotiate a sales price that is lower than list price for buyers. A competent listing agent should hold a track record for negotiating sales prices that are very close to list prices. Therefore, listing agents should have higher ratios closer to 100%. Buyer’s agent ratios should fall below 99%.
3. What is Your Best Marketing Plan or Strategy for My Needs?
As a buyer, you will need to know:
- How will you search for my new home?
- How many homes will I likely see before I find a home I want to buy?
- Will I be competing against other buyers?
- How do you handle multiple offers?
- Do you present offers yourself?
As a seller, you will need to know:
- Specifically, how will you sell my home?
- What is your direct mail campaign?
- Where and how often do you advertise?
- Will you show me a sample flyer?
- How do you market online?
4. Will You Please Provide References?
Everybody has references. Even new agents have references from previous employers.
- Ask to see references.
- Ask if any of the individuals providing references are related to the agent.
- Ask if you can call the references with additional questions.
5. What Are the Top Three Things That Separate You From Your Competition?
A good agent won’t hesitate to answer this question and will be ready to fire off why she is best suited for the job. Everyone has their own standards, but most consumers say they are looking for agents who say they are:
- Honest and trustworthy
- Assertive
- Excellent negotiators
- Available by phone or e-mail
- Good communicators
- Friendly
- Analytical
- Able to maintain a good sense of humor under trying circumstances
6. May I Review Documents Beforehand That I Will Be Asked to Sign?
A sign of a good real estate agent is a professional who makes forms available to you for preview before you are required to sign them. If at all possible, ask for these documents upfront.
As a buyer, ask for copies of the following:
- Buyer’s Broker Agreement (is it exclusive or non-exclusive?)
- Agency Disclosures
- Purchase Agreement
- Buyer Disclosures
As a seller, ask to see:
- Agency Disclosure
- Listing Agreement
- Seller Disclosures
7. How Will You Help Me Find Other Professionals?
Let the real estate agent explain to you who she works with and why she chooses these professionals. Your agent should be able to supply you with a written list of referring vendors such as mortgage brokers, home inspectors and title companies. Ask for an explanation if you see the term “affiliated” because it could mean that the agent and her broker are receiving compensation from one or all of vendors, and you could be paying a premium for the service.
8. How Much Do You Charge?
Don’t ask if the fee is negotiable. All real estate fees are negotiable. Typically, real estate agents charge a percentage, from 1% to 4% to represent one side of a transaction: a seller or a buyer. A listing agent may charge, for example, 3.5% for herself and another 3.5% for the buyer’s agent, for a total of 7%.
9. What Kind of Guarantee Do You Offer?
If you sign a listing or buying agreement with the agent and later find that you are unhappy with the arrangement, will the agent let you cancel the agreement? Will the agent stand behind her service to you? What is her company’s policy about canceled agreements? Has anybody ever canceled an agreement with her before?
10. What Haven’t I Asked You That I Need to Know?
Pay close attention to how the real estate agent answers this question because there is always something you need to know, always. You want an agent to take her time with you — to make sure you feel comfortable and secure with her knowledge and experience. She should know how to listen and how to counsel you, how to ask the right questions to find out what she needs to know to better serve you.
Right Answers to Your Agent Interview Questions
It’s not enough to know which questions to ask your agent. The answers to those questions are how you will figure out which agent to hire. Below are the best answers to each question.
1. How Long Have You Been in the Business?
While I am not suggesting that you hire some aging geezer with a cane, experience does count. It can mean the difference between knowing how to handle a difficult situation to ignoring it or not recognizing the signs of a potential problem before it develops into a crisis. Minimum of five years’ experience.
2. Average List-to-Sales-Price Ratio
When hiring a listing agent, expect to see list-to-sales ratio within 97% to 100% in a buyer’s market; in a seller’s market: 100% to 110% of list price.When hiring a buyer’s agent, expect to see list-to-sales ratios within 90 to 97% in a buyer’s market; in a seller’s market: 100% to 103%.
3. Best Marketing Plan / Strategy
As a buyer, you should expect to see 5 to 7 homes a day, for as long as it takes to find your home. All the homes should fit your parameters, and the agent should preview those homes for you. The agent should also agree to solely represent you and not represent other buyers who are competing for the same inventory.As a seller, you would like your agent to advertise weekly for you, do direct mail, send e-flyers, produce four-color brochures, and present you with a marketing campaign designed specifically for you.
4. References
You might find references on an agent’s Web site, but you should also ask to see letters of reference. Clients often send thank you notes or letters to the agent’s broker. Check a minimum of three references.
5. Top Three Things That Make the Agent Different
Examples can range from marketing to knowledge. Acceptable answers are:
- Strong repeat record of satisfied customers
- Extensive online marketing
- Good negotiation skills
- Assertive, doesn’t take no for an answer
- Strong communicator.
6. Review of Documents
As a buyer, ask to see a sample purchase agreement and ask the agent to point out your cancellation rights in this document. If the agent hems and haws, or hesitates to explain the purchase agreement to you, hire another agent.As a seller, ask to see the listing agreement. Ask about reserving the right to sell the home yourself. If you see a fee you do not understand, question it.
7. Affiliation with Related Professionals
Ask the agent if the title company she recommends charges competitive fees. All agents build teams of professionals, from title companies to escrow officers to mortgage lenders, home inspectors and appraisers. Ask if the agent’s company is receiving compensation for the referral. If so, you might want to choose another professional. Payment of some referral fees are against the law.
8. Agent Fees
All fees are negotiable. If you are a buyer, ask the agent if the fee stated in the buyer’s broker agreement will be adjusted if the offered seller’s compensation is lower.If you are a seller, ask about discounted fees. Sometimes agents will match fees offered by other agents.
9. Personal Guarantee
If the agent will not release you from a listing agreement prior to its expiration upon request, then you should hire another agent. Ask about it before you sign a listing agreement. Ditto with a buyer’s broker agreement. Some agents will release you; others will not.
10. Other Questions
You might ask the agent to reiterate your goals and objectives. If the agent does not appear to have a thorough understanding of what you want, despite your attempts to explain what you want, then hire somebody else. Some agents do not listen very well. You want an agent who will listen to you and communicate with you. The best way to find out if the agent comprehends your desires is to ask the agent to repeat it back to you.
You probably know that owning your own home can benefit you financially, but home ownership comes with a surprising number of health, wealth and social perks too. Check out these five ways home ownership could be making your life even better:
