You are about to hire someone to handle one of the biggest financial transactions of your life. How do you interview that person?
If you are selling a home, choosing the right real estate agent can make the difference between an efficient, cost-effective process or one of the most expensive and excruciating experiences of your life. In other words, you don't just want to pick whoever answered the phone when you called a nearby real estate office, or the guy your Aunt Tillie recommended. Selling a home the right way is a serious job, and you need to approach choosing a real estate agent like conducting a job interview.
What to Ask
What should you ask when interviewing possible real estate agents? The ten questions that follow will help you find out if the agent you are interviewing has the right skills to help you and is a good fit for your situation. These questions may also help you contain the cost of the agent's services.
- Full-time job? People often view real estate as a second career, something you dabble in on a semi-retired basis, or try once the kids have grown up and left home. That's nice for them, but you want somebody who views it as a primary career. When interviewing real estate agents, find out if this is their full-time job and how long they've been doing it.
- How many listings do you currently have? The answer to this is one of those numbers you want to be big, but not too big. A successful, active real estate agent should have at least a dozen listings at any given time. However, if the number is several times that, you have to wonder how much individual attention you are going to get.
- How many sales have you completed in the past six months? Some numbers illustrate how inactive many real estate agents are. According to the National Association of Realtors, as of 2013 there were about two million real estate licensees in the United States. That year, about 5.5 million homes sold (combined new and existing properties). That means the average real estate agent sold less than three homes a year. That would not be enough to make a living on, so clearly the bulk of the sales are concentrated in the hands of above-average real estate agents. Look for someone who is completing ten or more sales every six months.
- What is the typical turnaround time for a sale? The National Association of Realtors reported that as of the end of 2014, there was an inventory of roughly 4.4 months' worth of homes on the market at the current pace of sales. That 4.4 months is a good starting point for how quickly a real estate agent should be able to sell a home, though you will need to adjust this figure for how hot or cold your local market is.
- How much of your business is representing homes like mine? Ideally, you want a real estate agent who has been successful selling homes in your neighborhood, with characteristics and price points similar to yours.
- What is the game plan? Selling a home on a timely basis and at a competitive price takes a multi-faceted strategy. Look for a real estate agent who has a clear and coordinated plan in mind which includes how to advertise the property, how to network with other professionals, and how to show your home to its best advantage.
- What technological tools do you employ? Face it - these days, you don't want to end up with a real estate agent whose idea of promotion is limited to taking out a classified ad in the local paper's real estate section. Find out what they can do in terms of things like setting up virtual tours online and using social media to get the property in front of their colleagues. By the way, the less technologically inclined you are, the more you should look for a real estate agent who is tech savvy. That's known as hiring complementary skills.
- What expectations do you have for how the process will go? The answer to this should include when they expect to start driving buyer traffic to your home, how much traffic you should expect to see, and how long the property should take to sell. Having a shared understanding of these things up front will help you know later on whether the process is on track, or if you should be starting to worry.
- What is the lowest commission you've worked on in the past year? Hiring the cheapest real estate agent can be a big mistake, but once you identify someone who can do the job, you will want to know whether they ever discount their commissions. If they have some flexibility on commissions, you should benefit from it.
- Are there any fees for your services beyond the commission? There are a variety of services a real estate agent can charge for above and beyond the commission, from staging a home to creating photographic presentations. The agent may be able to justify these fees, but remember, if the home sells the agent will be in line for a healthy commission that should cover most routine expenses. At the very least, you should know what any added costs are going to be before you commit.
If possible, get these responses in writing. This may be more likely to happen if you have a more expensive home to sell, but in any case a real estate agent's willingness to answer these questions in writing will demonstrate that they are serious about wanting your business. Also, if later on you have to refer back to a representation that was made when the process started, having written answers to these questions will make the discussion more than just he-said, she-said.
Thoroughly interviewing real estate agents takes some work, but if you hire the right one it will more than pay off in the time and effort it saves you in the process of selling your home.