What Questions to Ask Realtors.
If you’ve been thinking of buying or selling a home, then you’ve also probably been wondering what questions to ask realtors when you meet with them.
Although many realtors will come prepared with a pre-listing presentation, no one realtor is the same and each one has their own style as well as info they’d like to focus on when meeting prospective clients.
You can never be TOO prepared so I always think it’s a great idea to think of some things you’d like to discuss, that are important to you. It’s an even better idea to write these questions down and have them on hand for the meeting so you don’t forget anything.
After all buying and selling a home tends to be one of the biggest financial (and lifestyle) decisions you will make. Because – finding and hiring the “right” realtor to help you process this transaction quickly, but also make the process less stressful.
Another important point to remember is that it’s not just about knowing what questions to ask realtors but ensuring you get the right answers. If anything is ever unclear, make sure you reframe the question(s) so you get the information you’re truly looking for.
Let’s start out with what questions to ask realtors when you are looking to sell!
How did you come up with the list price you’re suggesting?
Now, a realtor may or may not have come up with this in time for your meeting since they haven’t yet seen the inside and outside of your home BUT they should be able to have a general range based on comps in your area. They should be looking at not only what has recently sold but also the homes for sale.
Remember, it’s not so much about what they are suggesting but how they’ve come up with it that matters. What questions to ask realtors can vary however getting to the “how” and the “why” of their work is extremely important.
As you can appreciate, setting the right list price is the key to maximizing offer prices you may receive and also selling fast.
This said, a home is really only worth what someone else is willing to pay for it – but setting the list price appropriately sets the initial tone. If you price it too low, you could leave money on the table OR you could end up with a lot of interest, multiple offers and selling far over. List too high and the home could sit for an extended period of time and you could end up with one or a few price reductions.
When you’re thinking of what questions to ask realtors, you should really be looking at two things:
– do they have the knowledge to justify the price when they are negotiating?
– are they inflating this price just to try to get your business.
The answer they give you should be backed up my market data! In the industry, this is known as a Comparative Market Analysis, or “CMA” for short. This will reflect how your property stacks up to the best recently sold homes in your area that are a good comparison (e.g. same style of home, similar number of bedrooms/bathrooms etc.). And for any major differences, the realtor will either add or subtract money from the suggested list price. These are called “value” adjustments”.
Another great tool is an appraisal report. This will include these value adjustments for any of the big differences that can impact your possible sales price.
Those with the biggest impact are:
– lot size
– square footage of the home (above grade)
– number of bedrooms and bathrooms
– proximity to schools as well as road noise (such as highways)
If the realtor you’re meeting with is able to share information such as this, it is a good indication of how prepared they are and how “savvy” they are about the industry before you give them a chance and hire them. This is important because if they give you a vague answer over one more specific than they could be inexperienced, unprepared or inflating the suggested list price to secure your business.
So, be careful!
Is there a chance you could be representing the buyer?
There is no way for a realtor to know if they will or won’t be representing a buyer for your listing, but this is an important discussion to have. It’s known as “multiple representation” and you have the control over whether or not you’re comfortable with the realtor representing you as well as a buyer.
In some cases, this could be a good thing to get the deal done – however, there is a lot of money and emotions wrapped up in real estate transactions and it can be difficult to remain completely neutral, especially if your clients are looking to you for advice.
In a multiple representation situation, the realtor has to be VERY careful to make sure they don’t breach confidentiality of their clients. For example, they can’t give away your motivation for selling or what your bottom line price is because that could give a buyer leverage to negotiate or seal a deal for less money than you’re hoping for.
So, can a realtor represent a seller as well as a buyer. Technically, yes but in some cases, it may not be a good idea for them to do so. If they are representing the buyer, it can become very challenging to negotiate on both sides.
When you’re thinking about what questions to ask realtors, it’s helpful to get to the root of how the realtor operates. If your home has been sitting for awhile and they get a sign call, if you’ve previously discussed multiple representation then they will already know if they should engage the buyer or pass them along to another realtor. Having this conversation early on helps to guide the process should this come up later.
How Do You Plan To Market My Home?
Marketing a home is a crucial component to selling a home, wouldn’t you agree?
So, with this in mind, what questions to ask realtors wouldn’t be complete if this one was not included.
Smart marketing helps drive higher demand. More buyers can result in a higher sales price and in some cases, in a shorter amount of time. Buying a home can be in many cases, an extremely emotional decision. Buyers are envisioning living their and what their future life will look like.
When you’re talking to a realtor about marketing, make sure you cover:
– The Multiple Listing Service (“MLS)
– If the listing will also appear on other 3rd party sites such as Zolo, Zillow, Redfin etc.
– Staging and if they can include it or if you’ll need to cover the cost
– How they would describe the property
– List price and how they arrived at it
– What they will include when it comes to photos, video, virtual tour (floor plans and 3D)
– Will they send out any other advertising (paid ads on social media, flyers in the area, realtor blasts etc.)
– Open houses
You want to get a clear picture of how they will market your home. A great realtor will also provide you with a marketing plan outlining all of these elements.
What are the selling features of my home?
Every home has selling features, no matter their condition. There are always going to be select features about a home that makes it desirable. Does it sit on a big lot? Does it have a custom kitchen? Are the bedrooms spacious?
A great realtor knows how to get top dollar and will find all of the positive selling points that they can use in their marketing. Even a home that needs some work can have an optimistic twist put on the language. For example, buyer has the opportunity to add their own artistic touch, income property potential or a lower price means lowers taxes and mortgage payments.
The best realtors will do their homework before meeting with you. This doesn’t mean what questions to ask realtors should change. Don’t allow them to bulldoze you with so much information that you forget to ask what is important to you.
What kind of buyer do you think my home will attract?
If you’re wondering what questions to ask realtors, this is a great marketing focused question!
The types of buyers for various homes can be quite different when you consider the area, property type, price range, features and more. Someone looking to buy a condo in the city would be very different than someone buying a single family home in the suburbs, wouldn’t you agree?
Yes, of course, a buyer could be literally anyone, but some homes will appeal to a wider demographic than others depending on what it’s located, what features it has etc.
Now, if you get a generic answer from the realtor, than they may not have a good grasp on who they are actually selling to. When it comes to marketing, this could mean that their marketing plan won’t maximize the opportunity to promote the home to the right demographic.
Any real estate agent can put your home on the MLS. The best ones will have a plan and use the right marketing strategy.
How will you vet the buyer?
Now, just because the realtor isn’t representing the buyer in most cases, doesn’t mean there aren’t ways to vet them through their realtor when they are making an offer.
Want to reduce your chances of having your offer fall through? Make sure your realtor knows how to vet a buyer property.
When a deal falls through, there are usually two reasons why – they didn’t qualify for financing or something came up during the inspection and they decided to back out.
To ensure they don’t back out due to financing, the listing agent can ask the buyer’s realtor for a copy of their pre-approval to accompany the offer. From that point, they can also call the lender to see if financing will be a go.
One possible question to ask could be “what’s the buyer’s debt to income ratio”. If the realtor knows this then the buyer can’t use this as an excuse not to come up in price as a negotiating tool.
On the inspection front, one way to help combat issues that arise later is to invest in an inspection before the home even goes to market. This can be made available to buyer’s beforehand so there are no surprises.
This can help prevent a buyer from backing out on these grounds after the fact.
What questions to ask realtors should definitely include these to help minimize the chance of a sale falling apart after an offer comes in.
What do I need to do to get my home ready?
Your home is your home and it is completely natural to feel attached to it. This said, what appeals to you may not necessarily appeal to everyone else and in fact, it’s important that you do your best to depersonalize it as much as possible.
A very common error some sellers can make it spending time and money on things that don’t matter. A good realtor will be able to look at your home objectively to tell you what should be done to prepare it to list.
Your goal, as the seller, should be to spend the least amount of money and only invest it on what will bring you a positive return.
What questions to ask realtors should include a candid discussion about how a buyer may perceive the home and what renovations and/or repairs could be required to make it more appealing.
What costs are involved in selling?
Cost is always essential when you’re considering what questions to ask realtors. Moving is not cheap and although you should be able to earn money on the sale of your home based on equity that has accrued from years of living there, there are always factors to consider that can impact that.
Your realtor should be able to give you an expected net return based on your expected sales price less
– the mortgage balance remaining
– possible cost of breaking the mortgage term if you’re still in one
– commission
– legal fees
For example, if you sold your home for $999,000 and you had a mortgage of $200,000 then $799,000 would be left. Depending on your mortgage, there could be a penalty to break it (note that fixed tend to cost far more to break) – you should confirm this with your bank or broker. For the purpose of this example, let’s say $2,000. In addition, you should ballpark $1,500 for legal fees and based on 5% commission, another $49,950 that is split 50/50 between your realtor and the buyer’s. This would leave you with a net profit of $745,550.
Keep in mind that commissions are negotiable but most brokerage won’t lower the commission that goes to the cooperating brokerage (the buyer’s realtor) so there is some wiggle room, but maybe not as much as you’d expect. Also, keep in mind that some realtors who charge a lower fee may not be able to or willing to go to bat for you. As a follow up to the current question, you can also ask…
Are you able to lower your commission at all?
Although this question will put any realtor to the test, it’s helpful to see how they negotiate with you.
You want to hear them put up a fight of some kind. If they cave immediately, then that is a possible red flag. Why? Because if they can’t defend the income they stand to earn, how are they going to negotiate on your behalf?
Also, keep in mind if they offer you 0.25% or 0.5% off their commission, it may not sound like a lot but since they are splitting with the cooperating brokerage in most cases, this actually reflects 10-20% off their total commission which is a fair amount.
Next up, what questions to ask realtors should also encompass their past experience which brings us to –
How many homes have you sold?
Experience is important, but as a “newer” realtor, I can say that it’s not everything. While I personally only have a year of experience trading real estate, I ran my own business for close to 20 years and have thousands of sales for hundreds of clients under my belt. Yes, it’s different but I think that stands for something.
It’s a good idea to get a clear picture of a realtor’s complete background, not only in real estate but overall in their career.
Keep in mind that there are many moving parts in a real estate transaction. You’ll want to work with someone with the experience needed to maximize a successful sale.
Ask to see their portfolio of homes sold and when. The more recent, the better.
Have you sold homes in my area?
What questions to ask realtors are pretty wide ranging and while this isn’t as important a question to ask now than it used to be, it’s still a good idea to ask it.
The reality of our day and age is that the internet gives buyers A LOT of information. As such, realtors need to know about an area but chances are, a buyer has already done their homework before deciding where they want to live.
This said, there are still some things that a buyer won’t be able to find online such as selling points in the area. This isn’t a necessity but it is helpful. If they haven’t worked in your area a lot, then follow up by asking them how they’ll gather the info they will need to promote the home and sell it.
In addition, you can provide some selling points as well 😊.
Can I cancel our agreement?
Hopefully you won’t have to – but the last thing you’ll want to find yourself in is a contract you can’t get out of. Things happen, life happens. You should have an exit plan if you need one.
And, how a realtor answers this question will tell you a lot about their integrity.
The average agreement spans 6 months. During this time, you can’t hire another realtor. As long as your house sells, your realtor gets paid whether you’ve been happy with the service they’ve offered or not.
In spite of the fact that many realtors depend on repeat business and referrals, there are a slim few who will over promise and under deliver. The biggest one tends to be inflating the price they think they can fetch for your home. This is especially common among “top” real estate agents.
Be cautious of realtors who give you an unrealistic expectation on your sales price. Their plan is likely to:
- Get you excited about a higher price than you thought you’d get
- Sign the listing agreement with you on the spot
- Let the home sit on the market (they know this will happen)
- Tell you to reduce the price to attract more buyers
- Sell the home at a lower price, but they still get commission
When this happens, the listing becomes “stale” and buyers may start to wonder what’s wrong with the property. The final selling price is usually much lower than it should have been if the home had been priced right from the start.
Want to reduce the chances of this happening to you?
Then the realtor’s answer to this question should be “yes.” Without any hesitation. There is absolutely zero reason why you should be locked into a contract. And you need to get in writing.
Do not skip this question.
It’s extremely important to the sale of your home.
How important? If they don’t give you an immediate “yes,” then you shouldn’t hire them.
What’s your average days on market for all of your listings?
In case you’re not familiar with the term “average days on market”, this is the number of days when your home is first listed on MLS to when an offer is accepted (not closed). This gives you an idea of how long it may take for your home to sell. This is a good sales point to compare to other realtors you’re interviewing.
What percentage of your listings have fallen through? And why?
In terms of what questions to ask realtors, this one is great because a higher number than usual could mean a realtor isn’t going a good job vetting a buyer OR they aren’t servicing their sellers properly. While a transaction can fall apart for many reasons, but ideally they should be able to close their listings most of the time. Anything over 5% is concerning but the total number of listings the realtor had also needs to be factored in.
How often will we communicate?
Selling a home can be a lengthy process and it’s also extremely personal. Before you embark on this journey, you want to get a clear picture of how often you’ll be communicating and with regards to what.
Unfortunately, not all transactions are smooth sailing. It’s to be expected that there could be bumps in the road along the way. You want to know the realtor will contact you as often as required to discuss both the good and the bad.
When you’re considering what questions to ask realtors, communication is right up there in order of importance. You need to know they are committed to staying in touch and keeping you updated.
Now that we’ve covered the top 12 questions to ask a realtor when you’re selling your home, let’s also take a look at some of those you should go over if you’re hiring a realtor to help you find a home.
Since buyers are generally not responsible for paying commission (unless you’ve agreed to a commission higher than the seller is willing to offer), most buyers don’t worry too much about the questions to ask, say compared to a seller. This doesn’t mean you shouldn’t still conduct some due diligence before signing with a representative.
First off when it comes to what questions to ask realtors…
How long have you been a realtor?
Similar to hiring a listing agent, experience matters. Again keep in mind the scope of their career experience if they haven’t been in the industry long and allow them to give details regarding their past, recent clients.
On average, how many homes do you help buyers purchase in year and overall, how many homes have you closed?
An average realtor closes about 8-12 homes per year. If the realtor that you’re speaking to has many homes below this number, it could be a red flag and you should ask for more details. If they are only working part-time because they have a young family for example, this could explain the lower number.
Do you work with more buyers or sellers?
When you’re thinking of what questions to ask realtors, it’s a good idea to understand the mix of their clients. Are they more focused on buyers or sellers or both? In many cases, realtors prefer to specialize and most realtors who work with sellers tend to take on more clients as the work load per client tends not to be as heavy, but they are generally not as easy to land as clients compared to buyers.
How many buyers are you working with at the moment?
You want to make sure they have the bandwidth to take you on with a client. If they are working with a lot of clients, they may not have time for you, even if they say they do.
How long does it typically take for your buyers to find and secure a home?
From the first time you go out seeing houses to landing an accepted offer takes time, but how much time? It’s not common to find your dream home immediately, but a few weeks to a few weeks is normal. Anything over 6 months can be concerning.
Can I verify your real estate license?
Any realtor working with a client needs to be licensed and although this should be a given, it’s never a bad idea among what questions to ask realtors is to verify their license with the Real Estate Council of Ontario (RECO). There are lots of scams so buyer beware.
Do you have any references I can contact?
Buying a home is a big deal! If you’d feel more comfortable speaking to a couple of references before moving ahead, don’t hesitate to ask for the contact information of their past clients. If they can’t or won’t offer this to you, be cautious. You can check out online reviews as well.
Have you helped buyers find homes in ______ area or in ______ price range?
It’s a good idea to work with a realtor who has experience in the area you’re looking for. If you’re not familiar with the area yourself, then you want to be able to lean on them for input. In addition, price ranges can alter the way a home Is marketed as well as how realtors view them.
Will we be working together directly or do you have a team you work with?
The last thing you want is to get comfortable with a realtor, then you find yourself passed off to someone else. Be very clear about who you will be primarily dealing with and what else could be delegated off.
Do they have a database of third party professionals they can refer you to?
It “takes a village” so to speak. When you’re buying a home, you’ll need financing, an inspection, an appraiser, a lawyer and potentially a contractor, moving company or other professionals. Your realtor should have established relationships and if they can’t refer you to one, then they can also help you source one through their network.
Can you explain how your commission works?
In most cases, the seller will pay the buyer’s realtor – but there could be some instances where the sellers has offered an amount lower then you’ve agreed with your realtor. For example, if you’ve agreed to 2.5% and the seller has offered 2%, you would be responsible to compensate the difference. It’s important to understand what this could mean for you as there could be thousands of dollars on the line that will have to come out of your pocket.
How do you help your buyers compete in this market?
Although the seller’s market has died down quite a bit, that doesn’t mean there is no competition. What questions to ask realtors should definitely include this one. You want to see if they suggest anything creative or outside the box to help you land your home.
Can you explain the home buying process from start to finish so I’m not missing anything?
If you’re a first time home buyer, then this is a super important question to make sure you don’t miss anything! As how showings work as well as offers, what to expect from a home inspection and after an offer is expected as well as closing, the timeline from start to finish and more. In addition to the process itself, you’ll also want to understand costs involved.
Buying and selling a home is a lot of work and it can be stressful. Hopefully these questions will help you in your search to find a realtor who is the right fit for you.
In the market for a new home in Durham region or Toronto? I’d love to help! I can be reached at 647-896-6584, by email at info@serenaholmesrealtor.com or by filling in this simple contact form.
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