The following questions should help you in your selection of a Realtor.
1. What is the commission amount that you charge? Do you charge any fees in addition to the commission amount?
Commission rates are negotiable and variable from one agent to the next. Make sure that you are getting a competitive rate and verify that there are no other additional fees than the commission rate. If an agent is attempting to charge you a higher fee than what a competing agent wants to charge, ask them what services are included to justify the additional cost.
1. How much experience do you have?
Experience matters. An active agent is likely to be more knowledgeable about the entire business – especially current market conditions and regulations. Ask your Realtor whether or not during their time as an agent they have ever been an assistant to – or partnered with – another Realtor. An agent who has worked with another Realtor in the past has accumulated tremendous amounts of experience (and actually, most assistants make more money and work more hours than most Realtors!). This is because, from day one, he or she has been completely immersed in real estate full-time, versus an agent who may struggle along by themselves – sometimes going many months without a sale. An agent who has actually hired an assistant can be an indicator of a busy agent, but sometimes it also means that they aren’t good at computers and need another person to do this for them. This could mean that the agent will not respond to your emails in a timely fashion and may not be great at using the MLS database.
3. Why is it especially important to spell the name of the neighborhood correctly in the MLS database?
The answer to this question will give you a good feel of how technically aware they are of the tools at their disposal. Some Realtors aren’t great at working with computers and this can be to your detriment. For example, if you live in a neighborhood called “Willamette” and the agent enters in the word “Willamete”, the other agent who is searching for houses in this particular neighborhood for a buyer-client will not be aware that your home is listed. It is very important that your Realtor is aware of all these technicalities.
4. If you are vetting an agent to list your real estate for sale, make sure that they have a marketing plan in writing and review it thoroughly.
Make sure that you are aware of all of the ways that the agent is going to market your home. The marketing aspect can vary considerably with one agent to the next. Some agents are evasive about what they will and will not do in marketing your home. When you review the marketing plan, you are looking for DETAILS. Is the agent going to put a flier box on the sign? What is the plan to verify that the flyer box does not run empty? How often will open houses be run and what periodicals will they be advertised in? Etc. Make sure that whoever you hire is clear and provides their marketing plan in writing.
5. What are your hours of availability? Is this your only job or do you have another?
Contrary to popular belief we do all take time off – it is impossible to work 24 hours a day, 7 days a week. It is important that you know generally what the hours of availability will be so that you know if your schedule is going to mesh with theirs or not. Some agents actually refuse to work outside business hours – which may or may not work for you. If the agent isn’t clear about when they might not be available and how business is handled when they aren’t in the office you might want to look elsewhere. I’ve heard people say on so many occasions: “I just can’t get a hold of my agent!”
6. What are your personal feelings about in-company transactions and Disclosed Limited Agency? Please see this previous post if you do not know what these terms mean.
If a situation arises where the agent may represent both you and the other party to the transaction, you want to make very certain that you are comfortable with this potential agent in such a role. And you may even want to ask them specifically – what are the ways in which you think an in-company transaction might not be to my benefit and how to you plan to verify that I am represented fairly? The answers to these questions are very important.
7. Do you have any references from clients you’ve represented in the past?
An agent who provides letters of recommendations with emails and phone numbers from previous clients is a good indicator of a quality agent.
8. What separates you from your competition?
Look for answers such as: integrity, honesty, trustworthy, up-front, ethical.
9. Do you have related industry professionals that you can recommend?
Having relationships with quality loan officers and inspectors is a must. Loan officers and home inspectors vary considerably in experience and you want to know that whoever you hire, or whoever the agent puts the buyer for your home in touch with, are business professionals who thoroughly know their business.
10. Make sure that you obtain a Comparative Market Analysis and review it thoroughly.
A Comparative Market Analysis (CMA for short) is a report of homes that are similar to yours (or the house you are considering purchasing). Included in this report will be homes that have either sold, are active on the market, have a sale pending, or are expired listings. This report is indicative of value. A CMA is most often used when a Listing Agent makes a presentation to a home-seller about putting their home on the market, but they are also used when a buyer has found a property that he or she wants to put an offer on. Here are some tips in reviewing the information:
Does the data provided make sense to you? Did the agent personally see any of the homes that are currently on the market and tell you how they relate to your home or did they just rely on the data in the computer?
When you review the CMA, make sure to ask yourself what YOU think of the comps that the agent is using. Do you think the homes are similar to yours? Why or why not?
One thing you can do to double-check how fastidious this particular agent is, is to search the MLS database yourself (in Oregon and some Washington this is RMLS). Unfortunately for you, the only listings that are public are those that are currently available or have a sale pending (closed and expired listings are only available to Realtors). Still, you will want to search around for homes that are similar to yours in neighborhood, bedrooms, bathrooms, square footage, lot size, garage, etc. Are there homes that YOU think are good comparables to yours, and were they included in your agents’ CMA? If they were not, ask them why the particular homes weren’t included. Perhaps the agent genuinely thinks the houses that you see do not compare to your home, but the other reason they may not have been included is that the agent wasn’t as thorough in their research as you would like them to be.
Some agents, believe it or not, refuse to do a CMA on your home until they’ve acquired a listing agreement signed by you. The reason for this is twofold: one, they are looking for the easiest clients to work with, and two: they don’t want to do a bunch of work for someone that is only fishing for a price opinion. While I can respect the motivation behind the latter, I do not think this approach serves you any purpose. You need to see, in a written report, which homes they will be comparing yours to. How would you know, if you don’t see it in writing, that the agent is going to use homes that are truly comparable with yours? How do you know they aren’t going to try and get you to list your home below what it is worth? You wouldn’t have any way of knowing, and would have to rely solely on trust – not a good idea.
11. What price do you think I should list my home?
The answer to this question is going to be a good indicator of an honest agent who’s willing to work hard for you.
If the price seems way higher than what you expected, the agent may be attempting a sales tactic called “buying the listing.” This is where the agent tries so hard to impress you with a high number that you are compelled to sign a listing agreement so that you can obtain the highest amount for your house. Unfortunately, pricing your house really high is likely to not result in many showings. Even if you drop the price considerably at a later time, it can result in a “market-worn” home – a home that was so high that no one looked at it, and now everyone assumes that something is wrong with the house because no one bought it. Don’t be fooled – everyone judges a house partly by how long it has been on the market. And, if a Realtor tries to tell you that they can just “refresh” the information in the MLS database – beware of that answer, because there is no way to truly refresh the information. Even expired listings show up easily when an agent searches for them – and a quality agent WILL.
Conversely, if the agent comes to you with a price that seems way lower than what you think the house would sell for, this agent may just be looking for an easy transaction. Low-priced homes sell very quickly.
12. How quickly do you think we should drop the price, if the house has not sold?
In my experience, the answer to this question largely depends on how many showings the house has received, whether or not I think the house has been priced competitively, whether or not there is much competition, etc. Many agents will give you a line such as: “If the house has not sold within 30 days…” If the agent has a “canned” answer to this question, I would be wary.
13. Did the agent provide you with an Initial Agency Disclosure Pamphlet?
Here in Oregon, the Oregon Real Estate Agency requires that we give this pamphlet at the first substantial contact (essentially, the first time we meet). If the agent did not provide this, you should question what other laws they are breaking and what other disclosures you will not receive in a timely manner (trust me, there are many!).
14. If you are interviewing a Buyer’s Agent: What is your plan in finding me a home? What criteria will you use in the database? And, how often will you search for new listings for me?
A Buyer’s Agent should be very transparent about how it is they plan to go about finding you your home. A simple answer such as: “I will search the MLS database” doesn’t tell you very much. You need to know what criteria they are going to use to make sure that you are on the same page. I’ve heard many complaints from buyers in the past of agents who show them houses outside of their price range! The agent needs to be clear that when you say you cannot afford more than $250,000, you really mean that a house more expensive than this isn’t going to work. Looking at homes a little higher than this isn’t going to hurt, because often times the price can be negotiated down a bit, but looking at homes over $300,000 is likely going to be a waste of your time.
Likewise, you need to know that the agent is well informed about what neighborhoods, school districts, number of bedrooms, square footage, lot size, etc., are acceptable to you.
In addition – and this is a really important point – you need an agent that is looking for new listings for you on a daily basis (if not multiple times a day). Some houses, especially if they are priced really well and very nice, sell very quickly. You need to know about houses that match your criteria THE DAY they go on the market, not a week or several days later. This market is very competitive and you need your agent to be on top of it.
15. Have you ever had an adverse decision made on an ethics violation or complaint filed with the Oregon Real Estate Agency?
The Oregon Real Estate Agency publicizes all adverse decisions. Through the years of reading these decisions I’ve seen multiple repeat offenders. Yikes! Make sure you are hiring an agent who follows the rules.
I hope these questions help you find a respectable agent and that you find an amazing house or sell your home with relative ease.