Knowing which questions to ask a real estate agent when selling is crucial.
Why?
Because the right realtor can not only sell your home faster and make you more money (especially in a shifting market) but also make the selling process much less stressful.
Choose the wrong person and it can be the complete opposite.
But how do you know if you’re hiring the right realtor?
You need to ask the right questions.
And here’s the key…
It’s not just about knowing which questions to ask a prospective realtor.
It’s about getting the right answers.
There are two questions that are so important that, in my opinion, if you don’t get the right answers, don’t hire them — no matter who they are (I’ll tell you which questions these are).
Here is a list of the best questions to ask a realtor when selling.
1. How did you arrive at your suggested list price?
Notice that this question isn’t, “What do you think my asking price should be?”
Every real estate agent will tell you what they think you should list your home for.
But the “how” is much more important.
Setting the right asking price is key to maximizing your offer price and selling quickly.
Your home is worth what someone is willing to pay for it, but the listing price sets the initial tone.
Set the price too high and you’ll discourage motivated homebuyers from even visiting.
Price too low and you could be leaving money on the table.
Why should you ask a real estate agent this question before hiring them to sell your house?
To ensure two things:
- They have the knowledge to justify this price when negotiating.
- They’re not suggesting an inflated price to secure your business.
The answer you get needs to be backed by data
The realtor you’re interviewing should present you with a comparative market analysis (also known as a CMA).
This is an analysis your potential listing agent will put together that compares your property to the best recently sold homes (also known as “comps”).
What you want to see is a breakdown of how your house compares to each recently sold property.
Here’s an example of what this comparison might look like:
This type of real estate analysis is what you’ll see on an appraisal report.
It includes home value adjustments for the key differences that can impact your potential selling price.
The ones that have the biggest impact are:
- Square footage
- Condition
- Bedrooms
- Lot size
- Schools
- Proximity to road noise
- Bathrooms
The answer you get will immediately give you a glimpse into how savvy the real estate agent is before hiring them.
This is important because if their answer is vague and doesn’t include data like this, they’re likely either inexperienced or intentionally inflating their price to secure your business.
I would consider this a red flag.
You want the answer from the listing agent you’re interviewing to include data from comparable sold homes that back up their price.
If it does, then you know they can use that same data when negotiating for you.
Pro tip: Some experienced real estate agents have the know-how to use this data against you.
They do this by convincing you that they can magically sell your home for a price too good to be true.
This is one of the reasons why disclosing what you think your house is worth is one of the things you should avoid telling a listing agent.
So be cautious if the agent is recommending an asking price that seems inflated.
This is a common tactic that can easily cause your house to sit on the market.
One of the upcoming questions will help you almost completely eliminate the possibility of this happening to you.
2. In what percentage of your sold listings have you also represented the buyer?
If there’s one question you need to make sure you ask a realtor, this is it.
Why?
Because their answer is a strong indicator of whether they’ll look out for your best interests.
Can a realtor who is selling a home also represent the buyer?
Yes.
Should they also represent the buyer?
In most cases, no.
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Here’s why…
The total commission you pay when selling your home is usually split 50/50 between your listing agent and the buyer’s agent.
This means a real estate agent doubles their commission if they represent both the seller and buyer in the same transaction.
You can probably see where this is headed.
Many real estate agents are willing to risk their integrity to make this happen.
By “risk their integrity,” I mean:
- Convince you to accept an offer that favors their buyer
- Limit the marketing of your home, without you knowing
- Not present all offers to you
- Minimize their negotiating effort with buyer agents so that you accept their buyer’s offer
I’ve seen these tactics used by experienced agents first-hand.
This happens much more often than you think.
And in most cases, the property sells for a far lower price than it would have if the agent was only representing the seller.
The realtors who have a higher than average number of sales where they represented both the seller and buyer (compared to other agents in the same area) are the agents who prioritize a higher commission above a higher selling price.
This is why this question is so important.
And it’s why we consider this the most important part of our screening process when matching local listing agents with sellers.
The acceptable percentage can sometimes be a bit above 10% in lower priced areas across the U.S.
But very rarely will we recommend a realtor who has represented both the seller and buyer in more than 10% of their sales.
And you shouldn’t hire them if the answer you get is anything higher than that.
If you do, you’ll be selling with someone who has a proven track record of prioritizing a higher commission over their clients best interests.
Pro tip: Before meeting with the agent, ask them to bring a printout of all of their sales (for both sellers and buyers).
This will allow you to see the percentage of their transactions where they represented both parties, which will eliminate their ability to not be up front about their true percentage.
3. How will you market my home?
Marketing is key. It’s what can drive higher demand.
Higher demand means more homebuyers.
And more buyers can mean a higher selling price in a shorter amount of time.
Buying a home is an emotional decision, and the best agents incorporate emotion into their marketing plan.
When you ask a real estate agent how they’re going to market your home, most will discuss these items:
- Multiple listing service (also known as “MLS“)
- Syndication to real estate portals (Zillow, Redfin, Trulia, etc.)
- List price
- Photos
- Flyers/brochures
The experienced agents who are willing to deploy additional marketing resources might also mention some of these:
- Video
- 3D walkthrough
- 2D floor plan
- Staging
- Social media ads
- Top agent networking
Hearing about how an agent will market your home is great. You need to know how they’re going to get the word out.
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But you want to dive a bit deeper and hear about their specific approach.
What are the selling features of my home?
Every home has selling features.
It doesn’t matter if the home is in great condition or a fixer-upper.
Or if the schools have high scores on greatschools.org or below-average scores.
A realtor who knows how to get top dollar will find positive selling points and use them when marketing.
For example, the two selling features for a home in need of updating could be the following:
- Lower price compared to nearby listings, which means lower monthly payments and lower property taxes
- The opportunity for the buyer to add their “own artistic touch”
A good agent will do their homework before your initial consultation so that they can tell you which selling features they might use.
Who do you think the buyer for my home will be?
This is a great marketing question to ask a real estate agent when selling.
The type of buyer for any given home can be different depending on the area, property type, price range, selling features, etc.
For example, a buyer for a condo in San Francisco is probably going to be different than a buyer for a single-family residence in a suburban neighborhood.
A buyer for a home listed in a retirement community is going to be different than a home for sale in Downtown Austin.
The answer you’re looking for is something specific.
Of course, your buyer can be anyone, but every home will appeal to a larger demographic more than others.
A generic answer from the realtor you’re interviewing most likely means they won’t know who they’re selling to.
How do you plan on marketing to my target buyers?
The best selling agents excel at constructing a plan targeting your ideal buyer.
They do this by utilizing the right selling features that are most appealing to your target audience through the right marketing channels.
This is what you want to hear the agent talk about when answering this question.
The answer should include:
- Who your target buyers are
- Which selling features are most attractive to those buyers
- The marketing material the agent will use to showcase your property
- Which marketing channels the agent plans on using
Any agent can put your home on the MLS.
But the best real estate agents will have a plan and incorporate the right marketing strategy to get your home sold fast and for the highest price.
4. How will you vet the buyer?
Failing to properly vet a buyer is the number one reason why you’ll see a home go back on the market after it was pending.
And it almost always happens because the buyer wasn’t able to obtain financing during their contingency period.
This is why you need to ask the prospective agent how they plan on evaluating a buyer when an offer is submitted.
Ideally, you want the answer to include that the agent will…
- Require a pre-approval letter to be submitted with any offer
- Call the buyer’s lender after receiving the offer to make sure the buyer is qualified
But you also want to hear about what the realtor you’re interviewing will ask the loan officer.
For example, a key question they can ask is this:
“What’s the buyer’s debt-to-income ratio?”
All lenders have a maximum ratio. If a buyer is not able to obtain financing, this is usually the reason.
Knowing the buyer’s ratio up front lets your agent know that the buyer meets this qualification.
It can also help in negotiating because the buyer’s agent cannot say that the buyer is at the max debt-to-income ratio limit as an excuse as to why the buyer can’t come up in price.
But here’s why asking this question is important…
The answer you get will clue you in as to whether or not the real estate agent you’re interviewing knows how to qualify a buyer.
If you get the right answer, you’ll reduce the chances of your sale falling through, which means you’ll be in a better position to sell faster.
5. What do I need to do to get my home ready?
The appearance of your home will have an effect on how fast you sell and for how much.
A common mistake that many sellers make is spending too much time and money on things that don’t matter.
The goal is to spend the least amount and only on things that will bring a return on your investment.
And that’s exactly what the answer should be about when you ask a real estate agent this question.
In many cases, the answer should include low-cost (and no-cost) fixes and upgrades that have a big impact on the visual appearance for prospective buyers.
For example, can your front or back yards use a little touch-up?
Then adding some cheap, colorful plants and flowers is a great part of the answer you should get.
Their advice will tell you how experienced and savvy the realtor is.
Do you plan on living in the home while it’s listed?
Ask the realtor which items inside your home can stay and which ones should go.
6. What are the costs?
You probably want to know how much you’re going to walk away with after selling.
The equation to figure this out is simple:
(Sale price – anything owed on the property – closing costs = your net proceeds)
A chunk of the closing costs are going to be the real estate agent fees.
There are other closing costs too, such as escrow fees, title fees, and attorney fees (if you live in a state that requires this), but the agent commissions will be the largest part of your total cost.
Here’s an example of the closing costs a seller pays in California.
Depending on your area and price point, the total commission is generally in the 5-6% range (negotiable) and split between the seller and buyer’s agents.
Check with your accountant, but usually, the commission (and all other closing costs) is tax-deductible.
Asking the realtor about the costs will allow you to compare their services and fees to those of other realtors you might interview.
But you need to be careful.
Some listing agents who discount their commission are the ones who won’t fight to get you the absolute highest price.
So ask the realtor this follow-up question.
Will you lower your commission?
This question is putting your potential realtor to the test.
Pay attention to how the agent responds.
The ideal answer is an immediate explanation about why that realtor is worth the commission.
You want to hear them “put up a fight.”
The response you don’t want to hear is an immediate “yes, I’ll lower the commission,” or a very weak reply.
I’d consider this a red flag.
Why?
Because if that realtor doesn’t defend their financial interest, there’s an extremely strong chance that they won’t defend yours.
7. How many homes have you sold?
What’s the purpose of asking a prospective real estate agent this question?
To make sure you’re working with an agent who:
- Has selling experience
- Knows how to navigate the many moving parts in a real estate transaction
The key phrase there is “selling experience.”
Because working with a listing agent who has minimal experience is going to drastically reduce your chances of a successful home sale.
But knowing how to choose a real estate agent for selling takes more than experience.
You also need someone who is going to look out for your best interests (and prioritize your sale).
So don’t hire them just because they have a lot of transactions under their belt.
Ask to see their portfolio of listings sold and when. The more recent, the better.
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Here’s why…
An agent with recent selling experience will be armed with the local market data you’ll need to generate the best offer.
And make sure you confirm that the agent’s answer does not include homes they’ve helped buyer clients purchase.
The answer you’re looking for is only for the number of properties they’ve listed and sold.
8. Have you sold homes in my neighborhood?
Most sellers ask real estate agents this question when going through the interview process because they think it’s a necessity.
It’s not.
But there’s a reason why I included it.
The internet.
Today, many buyers search online and are able to find out almost everything they need to know about a neighborhood.
When I say everything, I mean everything…
- Schools
- Shopping
- Proximity to freeways
- Crime
- Recent sales
But there are some things about a neighborhood that buyers won’t be able to find online.
This is why it’s ideal if you hire a real estate agent who has at least some experience selling properties in your area.
But don’t cross an agent off your list if they don’t have experience selling within a close proximity to your home.
A savvy realtor can do their homework and get all the information they’ll need.
Plus, you’ll be able to tell them what you think the selling points about your area are.
9. Can I cancel our contract?
This is the second most important question to ask a realtor when selling your home.
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Here’s why…
A listing agreement is a binding contract that is almost always exclusive to you and your agent.
The length of this agreement is usually at least 3-6 months.
This means that you cannot fire your agent and hire another one during this time.
This also means that as long as your house sells, your realtor gets paid, whether you’re pleased with their services or not.
Because of this, some realtors will overpromise before you sign the contract.
For example, a common tactic you might hear is how they can sell your house for an unrealistic price.
Here’s the thought process for the realtors who do this. Their plan is to:
- Get you excited about a higher price
- Sign the listing agreement with you
- Let the home sit on the market (they know this will happen)
- Tell you to reduce the price
- Sell the home at a lower price, but they still get an agent commission
When this happens, the listing becomes “stale” and buyers start to wonder what’s wrong with the property.
And the final selling price is usually much lower than it would have been if the home had been priced right from the start.
Want to reduce the chances of this happening to you?
Ensure the realtor’s answer to this question is “yes”
There is absolutely zero reason why you should be locked into a contract.
Even though you may not cancel the agreement, having the option to do so means the agent’s commission check is not “guaranteed.”
This means they’ll be more motivated to sell your house quickly and for a price that you’re happy with.
That’s why this is one of the most important things to know before signing a listing agreement.
How important?
If they don’t give you an immediate “yes,” then you shouldn’t hire them.
10. What’s your sale-to-list price ratio?
Any realtor can show you how much they’ve sold homes for.
But you want to see what the original listing price of those homes was.
This number is calculated by taking the selling price of all of the homes a real estate agent has sold and then dividing them by the listing prices of those homes.
For example, if a realtor has an average selling price of $1,000,000 and an average asking price of $950,000, then their sale-to-list price ratio would be 105%.
You can take this number and compare it to other realtors you might interview.
Be leery of listing agents with a number that is much higher or lower than others.
A ratio that is on the higher end means that the realtor tends to underprice the homes they sell.
Some agents do this intentionally so that they can market the home they just sold to nearby homeowners with something like, “Just sold for $$$ over the asking price!”
Usually, the listing agents who do this have a sale-to-list price ratio of ~110% or higher.
Ones with a ratio on the lower end tend to overprice the homes they sell.
They do this either because of a lack of experience or because they intentionally overpromise on their suggested listing price.
In my opinion, anything under 95% can be a red flag.
11. What’s your average number of days on market?
The average days on market is the number of days from when your home is first listed on the MLS to when you accept an offer (not when the sale is closed).
This can give you a rough idea of how long your home might take to sell (although there are many other factors that can impact this).
Similar to the sale-to-list price ratio, this is another number you can compare to other realtors.
A higher-than-average number of days to sell means that the realtor tends to overprice their listings.
And a lower-than-average number can mean they tend to underprice the homes they sell.
12. What percentage of your listings have fallen through?
I particularly like this question because if an agent’s number is higher than usual, it can mean the agent doesn’t do a great job vetting the buyer.
A transaction can fall apart for many reasons, but an agent who has a track record of not having to put their listings back on the market knows how to make sure the sale closes.
For me, anything over 5% is concerning.
Of course, the total number of listings the agent has needs to be factored in.
The more homes they’ve sold, the better this number will represent how well they do their job.
13. How often will we communicate?
There are many steps to selling a house with a realtor, which means you’re about to embark on a journey.
So knowing how often you’re going to communicate with your agent is key.
Will they be updating you every few days? Once a week?
The ideal answer is something like, “As often as you’d like.”
The last thing you want is an agent who isn’t committed to communicating with you from start to finish.
Because not all transactions are smooth sailing. Sometimes there are bumps in the road.
You want a real estate agent who has no problem discussing the good, the bad, and the ugly.
It’s important they commit to how often they’ll be in touch, no matter how good or bad it’s going.
And confirm the method of communication so you’re on the same page (email, phone, text).
The final word
The questions you ask a realtor when selling are important.
It’s your opportunity to make sure you’re hiring someone who will care about making you the most money in the shortest amount of time.
This is the real estate professional you’re going to need.
Looking for assistance?
You can tap into our no-cost service to ensure you sell with the right realtor (we can also provide unbiased feedback about a prospective realtor you’re considering).
We utilize a unique screening process that analyzes agents in your area who:
- Are experienced selling in your area and near your price range
- Have highly positive online reviews from sellers
- Maintain a good history of only representing the seller (and not both seller and buyer in the same sale)
- Will let you cancel your listing agreement
Remember, it’s not just about knowing which questions to ask a realtor when selling.
It’s about getting the right answers.
Source: https://t-tees.com
Category: WHEN
