Selling or buying a house isn’t child’s play. It’s probably going to be the most significant financial transaction you’ll make in your life. Seeing as there’s lots of money involved, you wouldn’t want to mess anything up. To avoid getting ripped off by the other party during the transaction process, you need to work with a real estate agent.
If you’re a first-time home buyer, a real estate agent can, to an extent, determine the success of your house-hunting process. In 2021 alone, 88 percent of homebuyers bought their properties through real estate agents, confirming that realtors are a critical component of the home buying and sale process.
But how do you choose a great realtor? What relevant questions should you ask a realtor before making your choice? This article has all the answers.
Are you planning to buy or sell a property? The following are vital questions to ask a realtor to enable you to choose the right one for a smooth real estate transaction process. Let’s dig in!
Relevant Questions to Ask the Listing or Buying Agent
Suppose you’re considering working with a real estate agent to sell or buy a home; the following questions to ask a real estate agent will help you choose the right one.
Is This a Full-time Work for You?
While commissions are lucrative, it’s not unheard of to see real estate agents stay months without closing a deal. Hence, there are part-time real estate agents. Working with an agent who has another career or is invested in other things is detrimental to your home purchase or sale goal.
Therefore, ensuring the realtor you intend to work with is a full-time agent is important. Besides a full-time agent having expert knowledge of the real estate market than a part-time agent, they’ll likely respond to you faster and without distractions.
Suppose the agent you’re looking to hire has another career; you’ll have to work according to their schedules, not yours. The truth is that availability and speed are vital when house-hunting, especially when making an offer and negotiating.
Do You Represent Both Parties?
This question is crucial because many agents do both and serve as the seller and buyer representatives. Representing both parties in a real estate transaction is beneficial to realtors because once they get a buyer for their listed properties, they wouldn’t need to split the commission with their fellow realtors.
While this point might appear like an advantage, you’re the one being cheated. When an agent has a fiduciary duty to the two people involved in the real estate transaction process, it creates a conflict of interest.
Regardless of whether they’ve got a buyer or seller in mind if you’re the buyer, it’s in your best interest to explore all the available options. If you’re the seller, it’s your right to market your property to all potential buyers.
Not to mention that buyers agents and listing agents are two different jobs requiring unique skills. Although many agents represent both parties, it’s not uncommon to discover along the line that an agent has little experience in buying a home and vice versa.
Due to the complexity of real estate transactions, you need to work with an expert. To avoid putting your money on the line and ending up with an awful house as a homebuyer, ensure to protect yourself by working with an experienced buyer’s agent.
May I Speak With Your Past Clients?
An experienced real estate agent shouldn’t have any qualms referring you to their past satisfied clients. Ensure you contact some of their referrals to enable you to understand the realtor’s weaknesses and strengths better.
Don’t forget to check the realtor’s online reviews before contacting them. That way, you get an unfiltered view of the type of agent they’re and whether most of their clients are truly satisfied.
What’s Your Payment Structure?
Seeing as you’ll be paying the fee for both the listing and buyer agents, it’d be best to ask what the realtor’s payment structure is ahead of time. As a home seller, if you employ the services of a real estate brokerage, your commission charge will be about six percent of the home sale price, translating to three percent each for both agents.
For instance, suppose your home sale price is $500,000; the six percent agent commission will be $30,000. Due to the amount involved, which will take a significant hit on your overall sale price, you can attempt to negotiate with the agent, since a small percentage cut is thousands of dollars saved in home equity.
Depending on your location, you might choose other options, such as flat fee brokerages. On the other hand, some agents reduce their pricing and offer fewer services.
While asking about the payment structure is vital to home sellers, buyers should also prioritize this question because although you aren’t paying your agent directly as a buyer, the realtor is making money off the sale.
Simply put, if the agent handling your real estate transaction receives a commission, they might attempt to present you with properties at the high end of your budget to increase their commission. Suppose the agent hasn’t closed a sale for a long time; they might pressure you into hurrying your transaction so that they can get their cut.
Do You Have a Team?
Most established agents work with a team. Working with a group has its advantages, including ensuring no detail is overlooked and providing timely and effective communication even when the agent is unavailable.
However, ensure you understand the realtor and how their team works before choosing them.
How Experienced Are You?
Realtors have varying levels of experience. Before choosing who to work with, consider if you want a newbie in the trade or someone more experienced to help you handle one of the most significant financial transactions you might ever undertake, especially as a first-time homebuyer or seller.
A real estate agent’s training and background can be helpful when assessing properties during showings or negotiations. Ensure to work with an experienced and knowledgeable realtor that can discover defects you might have missed while protecting you throughout the arduous process.
What’s Your Cancellation Policy?
While you don’t pray to halt using the services of a real estate agent before the transaction process ends, some circumstances might be beyond your control, and you might need to stop working with an agent.
For instance, if a realtor performs below your expectations or acts unethically, you might sever the working relationship. Therefore, before signing a legal contract with the realtor, always inquire about your cancellation options.
Home sellers can request for agreement cancellation before expiration (three to six months). Although a listing agent doesn’t need to cancel a contract if there was no violation of its terms, most agents do so in a bid to protect their reputation.
Keeping a seller in a contract for months might lead to negative reviews, not to mention a report to the local association. However, the listing agent will charge a cancellation fee to recover some money spent on marketing. Note that the cancellation fee will be in your listing contract.
Buyers also can easily lay off their agents if they don’t sign a contract. However, if, as a buyer, you signed a three months agreement with your buyer’s agent, you can always request cancellation.
Like the seller’s agent, the realtor might agree to the cancellation to save face and not because they’re under any obligation. However, some will charge you a cancellation fee.
Questions to Ask Your Real Estate Agent When Selling a House
Most homeowners don’t know the right questions to ask a realtor when selling their property. After a few generic questions, they rely on gut feelings. While we won’t downplay the importance of following your gut feelings when choosing someone to work with, asking vital questions and receiving the right answers are more important.
A real estate agent possesses the power to make or mar your home sale. Hiring the wrong realtor because you didn’t bother to ask the right questions will negatively affect your property sale.
Even if you know and trust them, don’t avoid going through the interview process. The following are some vital questions to ask your listing agents:
Do You Have Experience Selling Houses In This Area?
Some real estate agents specialize in specific regions and neighborhoods. A realtor specializing in a particular community has extensive experience of what’s standard for properties there, including what makes a house desirable and valuable and how to make properties in that location sell faster.
What’s Your Marketing Plan?
A professional and experienced realtor will surely have a marketing plan for selling your home.
Some realtors utilize virtual tours and professional photographers to ensure their listed properties attract buyers scrolling through a multiple listing service.
Ask if the agent utilizes modern real estate marketing strategies like social media marketing, email marketing, and direct mail. Also, enquire if the realtor organizes open houses and would help give you ideas for staging your home to attract prospective buyers. An experienced agent can easily explain this process.
What Techniques Will You Adopt for Vetting the Buyers?
Look out for a great agent that has experience vetting buyers by asking this question to reduce your chances of offers falling through.
Most homes go back to the market after pending because the offer fell through. The reason for a bid falling through could be because the buyer discovers defects during the inspection or contingency period and backs out, or the buyer couldn’t get financing.
You need to ensure your agent can thoroughly vet a buyer, especially regarding financing. The realtor should be able to outline the techniques they’ll use, including discovering the buyer’s debt-to-income ratio to enable them to know if the buyer meets the lender’s qualifications.
That way, the buyer can’t use it as an excuse to pull out of the deal. Selling with an agent experienced in vetting buyers dramatically increases your chance of a successful and fast sale.
Can You Recommend How to Increase the Home Selling Price?
Your home appearance will significantly determine the amount you’ll sell the property and how fast the sale process will be. However, most sellers commonly make the mistake of spending lots of money and time on irrelevant things.
The goal should be to spend little money on things and places to give you a significant return on investment (ROI). Ask your realtor how to achieve this and gauge their experience from the answer.
The best real estate agents know what you need to do to make your house more appealing to prospective buyers. Experienced realtors can provide you with what you have to do to prepare your home for sale by simply walking around the house.
They’ll also advise you to forgo costly renovations and improvements to avoid running into a loss. Thus, be wary of any realtor recommending extensive home updates to increase the home price and indirectly, their commission. A great real estate agent who shares your goals will advise you on making smart updates that won’t have you breaking the bank.
Is the Listing Price Appropriate?
Most property owners overlook old and outdated countertops and cabinets to overvalue their homes. Some go as far as checking recently sold homes in their neighborhood to set their prices without considering that those homes might have had newer amenities, more bedrooms, or a bigger yard.
While asking your realtor the best listing price for your home, don’t focus too much on the number they provide; enquire about what prompted the amount, how many comps they considered, and the competitive market data that helped them reach the price.
Some realtors will inflate the price to tell you what you’ll love to hear. Run away from such agents, as the inflated price will discourage potential buyers. Ensure to go for an agent that understands the importance of building a competitive pricing strategy, knows how to do it, and will also explain how they arrived at the number they did.
Your realtor shouldn’t be afraid to help you see reasons and tell you the truth even if you wouldn’t like it.
What’s Your Preferred Listing Agreement Option?
Although the popular listing contract most sellers and agents prefer is the exclusive right to sell agreement, other alternatives still exist, so it’d be best to ask your realtor to ensure you know what you’re getting into.
The exclusive right to sell agreement is popular because:
– There’s a set contract duration (between three to six months)
– It contains contract cancellation details and possible fees
– It includes the agent’s duties to the seller
– The agent is guaranteed commission from the sale
However, there are alternative listing agreements for sellers depending on the situation. Suppose you don’t prefer the exclusive right to sell contract; ask the agent if they offer other options.
Will You Also Serve as the Buyer’s Agent?
This question is imperative because, unless you’re working with a team of agents, you’d need someone who will represent your interests wholly. Sometimes, an agent might argue that they have buyers lined up and therefore is the best hand for selling your house.
The truth is, it’s often hard for a realtor to represent both a buyer’s and seller’s interests in a real estate transaction, especially when negotiating the price. You’ll want someone who will put your interest first and be accountable to only you.
Often, most agents serve as both buyers’ and sellers’ agents due to the full commission they’ll receive.
Vital Questions to Ask a Real Estate Agent When Buying a House
If you’re a first-time homebuyer, the following questions will help you make the best choice when hiring a realtor.
What’s the Current Market Trend, and Would it Affect Home Prices?
Ask your real estate agent to give you the latest local real estate update and whether it will affect home prices. Whether it’s a school closing, a new construction, or a supermarket opening, your realtor should be aware of these significant changes and if they’ll work against the neighborhood or make it more attractive.
What’s Your List-price-to-sales-price Ratio?
Most times, homes sell for less than their asking price. Therefore, before hiring a realtor, ask for their list-price-to-sales-price ratio to enable you to discover their negotiation skill while being mindful that every home sale is unique.
However, a hot seller’s market will significantly affect the numbers in areas where bidding wars tend to happen frequently.
Can You Recommend Some Local Professionals?
The home purchase involves lots of people: escrow agents, contractors, appraisers, inspectors, and loan officers, amongst others. Working with an agent with connections to these professionals will undoubtedly make your transaction easier and faster.
For example, if you need to conduct a home inspection before closing on a property, the agent can connect you to a local property inspector they’ve used in the past. However, note that the agent’s recommendations might not always be affordable considering their relationship with the realtor.
Consider comparing prices if you have the time, but if you’re working on a tight deadline, you can use the agent’s connections to beat the deadline.
How Available and Accessible Are You?
Availability and communication are vital factors to consider when looking for a real estate agent. Suppose you’re only free during the weekend to view properties; working with an agent who prefers weekday showings won’t be a great match.
At the same time, you also want a realtor who responds quickly to your concerns and questions, as waiting multiple days for a response to your query will extend the home search duration.
How Soon Do Your Clients Sign the Buyer’s Agency Agreement?
Most buyer’s agents will allow you to tour one or two houses before requesting you to sign a buyer’s agency agreement. On the other hand, some states or brokers require you to sign the agreement upfront.
Don’t get pressured into signing the agreement. It’d be best if you tour some houses with different agents before committing to one to enable you to compare their real estate knowledge and styles before making a choice.
However, it wouldn’t be nice to string agents along. If you see who ticks your boxes, go ahead and sign the agreement. A buyer’s agent that sees you’re committed to working with them will put in extra effort to help you find your dream house, and the commission they will receive at the sale’s end is all the extra motivation they need.
Hiring the right top real estate agent is crucial whether you’re a first-time homebuyer or seller. The best agent will ensure you find your dream home and represent your interests to get the best deal.
Similarly, a great listing agent will ensure you sell your house quickly and at the best price.
However, the problem lies in finding the perfect buyer’s agent or the listing agent. Hopefully, these questions to ask a realtor will help you make the best choice so you can enjoy a seamless and fast real estate transaction.
Are you looking to sell your home or buy a new property? Homes by Ardor is the leading real estate agency offering both listing agents and buyer agents. Our listing agents will help you market your properties and employ tried and true techniques to ensure a fast sale.
On the other hand, our buyer’s agents are available to help you find your dream home. Go through our website today to see available homes for sale that might suit your preference, or speak to one of our agents to help you with your search.