Interview Questions for Real Estate Agents
If you are picking an agent to sell your home, the interview should occur at home, or at least after the agent has seen the property. Invite several agents to do a comparative market analysis. Even if you have no intention of moving and simply want advice and the chance to start a relationship, a market evaluationâwhere an agent sizes up what your house is worth in its current state, based on current market conditionsâis the place to start.
It will generally take the agent a few days to put together a market evaluation, which includes checking the prices of similar properties currently on the market, as well as prices of like homes that have sold in recent months.
You can interview a real estate counselor either when he or she does the walk-through or when he or she delivers the analysis; I prefer the latter because the evaluation always brings up more questions.
The First MeetingHere are some things you will want to go over with any agent. Some apply only to seller or buyer agents, others to both; some must be altered slightly to fit both types of agents.
How long have you been in the business? Is this your full-time job?
Full-time, experienced people generally are the way to go, although there may be nothing wrong with folks who have less experience but know the area very well.
Part-time agents are the best option only if you are looking to buy a home and don't want your search to be too active, the kind of thing where you are moving slowly, happy to see the occasional home that might spur you to act. The problem with part-timers is that they are not always going to be available when you need them. Remember, too, that a real estate agent's life heats up when a sale is pending; if she squeezes in business between a lot of other activities, she may not have sufficient time to handle the demands of the deal at its most delicate time.
Are you a broker or a sales agent?
This is a minor concern, but you want to know the answer so that you can make sure a broker has sufficient time to represent you effectively. If he is too busy managing the office or keeping tabs on associates, he might be too much of an administrator to meet your day-to-day demands.
Do Name-Brand Firms Matter?All member agents have access to the Multiple Listing Service, so bigger does not necessarily mean better when it comes to your agent's firm. Supply and demand in your market, the property itself, and the initiative and energy of the agent will determine how quickly your home sells more than whether an agent runs a one-person shop or is affiliated with the local office of a giant national chain.
At the same time, one key factor for any agent is his contacts. If you are a buyer and you hire someone from the firm that has the most listings in the area, you are likely to get a chance to see those houses before they appear in the Multi-List. In a tight market, that can be an advantage.
There is no guarantee that the bigger firm does more business in your area than the mom-and-pop shop, so the agents there don't necessarily have more pull with local bankers. They may have more pull with the local media, however, if they have a big advertising budget; that can lead to better display in the paper, access to television shows spotlighting area homes, and more. And although no one at a big firm would ever admit this, it's no secret that some big firms encourage agents to show prospective buyers the firm's listings first, meaning that a pool of prospects may see your property only after all of the alternatives have been reviewed.
The brand-name shops establish their reputation in your region not because of what happens at the national office, but because of what happens right there in your town. In the area where I Iive, for example, Century 21 seemed to handle half the listings when I moved to town, right up until its primary agent hung out her own shingle with a different firm. Now that firmâwhich had no local presence when I moved to townâis a big deal. The moral of the story? It's about the people more than the firm.
Real estate sales practices keep changing. So do the laws governing many specific aspects of land ownership. You are always best off working with someone who keeps her education current and is trying to make herself a better representative for you. As long as you are asking about education and background in the business, don't be shy about asking for a resume. There is no reason for a real estate agent to withhold that information.
How far afield do you go to get clients?
If you're a buyer and want to look in a regionâlike the suburbs of a big cityâyou want someone who knows more than one community. If, however, you want to live in a specific town or neighborhood, you may want someone who really specializes in local real estate and has superior knowledge of the community you want to call home.
As a seller, your concern when someone gets spread out is time. Since an agent can't be two places at once, having listings that are spread over a 25-mile radius can be a problem, particularly if you want your advisor to attend all showings of your home.
How many listings do you work with at one time?
I know agents who say they can handle eight listings at once; I know others who claim to comfortably handle twice that many. There is no right number, but the amount of business an agent has right now does affect your service, ranging from how much time an agent might have to communicate with you to how often she will be able to show your home.
If you are working with a buyer's agent, those other clients could actually be your competition for a home. If a terrific property comes on the market, you'd like to know you will get first crack at it, and that may not happen if the buyer broker has a lot of customers and you're secondâor sixth or eighthâon his list of people to call.
As with all advisory relationships, a lot of your decision will be based on instinct and who you feel you can trust. If you hear about a workload that sounds unreasonable, ask about it.
How many homes have you listed and sold in the last year? (How many buyers have you represented in the last year?)
Ask for a list of the homes the agent has sold in the last year, with the asking and final sales prices. Real estate is not unlike financial planning or insurance in that you want to be a lot like an advisor's average client.
If you have a $200,000 home (or that amount to spend on a new home) and the agent's sales sheet includes mostly homes valued at three times that much, you may not be getting a great match. After all, the agent will be better compensated by the commissions on the other properties, which may mean you get less attention.
Similarly, you want to make sure that the agent handles your kinds of properties. If their sales in the last year have been mostly single-family homes and you have a condo (or want to buy a condo), she may not be expert at dealing with the issues you're facing.
Have any of your showings or sales included homes in my neighborhood?
Just because someone is the top agent at his firm does not make him the best for you. If he is not familiar with your neighborhood, if he can't describe it knowledgeably to a seller, you may be better off with someone else.
What is your standard commission?
You MUST ask. Enough said.
Do you accompany all would-be buyers through my home?
This is a personal preference issue, but one that you want settled in advance. Many real estate agents use a "lock box," essentially a special key holder with a combination that is given to a buyer's agent. The buyer's agent brings clients to your home, opens the box, and uses the key to show people around your empty home.
It's convenient, particularly if you live a busy life and can't always be around the house to open the door for a showing. Still, many selling agents prefer to be presentâor to send their associatesâfor walk-throughs, hanging around to answer questions about the home.
You can consider it either a service or a privacy issue, but consider it in advance so that you can let the agent know your preferences. Remember, you want the agent to hire you as a client; if trekking to your house for each showing is more work than she cares to doâbut you think their presence is importantâneither you nor the agent is going to be happy with the relationship.
What are you going to do to help the house sell?
The Multiple Listing Service is a no-brainer. You want to find out if the rest of the advertising will consist of newspaper ads, exposure on a local television show, glossy advertising giveaways or, maybe, a radio transmitter that lets passers-by get a description of the house 24 hours a day.
Agents are paid to market your house; if they don't have a marketing plan, you'd be better off doing this yourself.
You also want to know if they will help you "stage" the home for sale, either themselves or by bringing in an expert, possibly for an additional fee. There are plenty of things you may love about your house that a professional seller will tell you are turn-offs for would-be buyers. Will your agent give you suggestions, or will she get in the trenches with you and help you dress things up to put the best foot forward in an open house?
Are you going to hold a broker's open house?
A broker's open house shows your home to other agents in town. Your agent sends a notice to every firm in the area, inviting interested agents to come for lunch and a look-see.
Don't kid yourself; there are plenty of agents who just come to eat, especially if your broker is known for putting out a good spread. Still, for a few hours on a weekday afternoon, you will get some agents in your home who could decide it is perfect for someone they are working with.
Many agents choose not to do a "broker's open," particularly if the customer doesn't request it; their reasons vary, but I have heard agents say they dislike a broker's event because there is no direct possibility of making a sale. If you think it will help your house move, ask for it.
How often will you have weekend open houses?
This is both a marketing and lifestyle decision. For most busy people, there are only so many weekends in a month that they can disappear from home for five hours without falling behind on housework, yard work, or homework. You need to get people in the door and looking at the property, but too many open housesâopening the doors every week or twoâsmacks of desperation; too few, by contrast, may mean that you aren't bringing potential buyers through your doors. Find a happy medium; if you know the advisor's strategy on open houses in advance, you'll either be prepared to live with it later, or you will turn to an agent who is willing to follow the schedule you want to use.
What are the positives and negatives of this house?
Few of us have a perfect house, no matter how much we love it. Ask an agent to tell you the home's best selling points and biggest drawbacks; you want to make sure the two of you perceive the house in the same way; otherwise, you could be in for a big disagreement on pricing.
This was the key issue in my parent's situation. My parents' house in New Jersey had one very small bedroom, with an attached bathroom, in the lowest floor of a split-level house. It was my big brother's room, then it became my grandmother's room, then it became my father's office.
It was a bit cluttered with a bed, his big desk, and a dresser. The first agent suggested removing the bed and basically calling it an office. My parents disagreed (they could have removed the desk or the dresser to open up the space); they felt that someone who might want an in-law apartment or a space for a nanny or au pair would look at the small bedroom and reconditioned bath next to itâdownstairs and away from the main bedroomsâand feel like he or she had found a house that served the purpose. Moreover, they could better justify the asking price with four bedrooms.
It turned out that my parents were right, and the first agent's ideas were wrong; had any of the discussion happened in advanceâperhaps when my mother was planning at the bathroom remodeling project and wondering if she'd get the money back from the upgradeâthey could have avoided the trouble that came up when they were anxious to get the house on the market.
What to Ask ReferencesAside from the standard list of questions you ask about any advisor (see Chapter ), there are some specific questions about real estate agents where a client's perspective is important, such as:
- Did you feel the same about the agent after the sale was done as you did after you signed the agreement to work together? What, if anything, changed?
- Did the advisor's suggestions pay off?
- If there were troubles with the buyer (or seller), how do you feel they were handled?
- Were there any times during the process that you were frustrated? If so, what set you off?
- To professional referencesâespecially other real estate agents in your area who might also be on your list of candidatesâask, "If you were selling (or buying) a home and couldn't do the deal yourself, would this agent be one of the three top candidates to get the job?" You can't expect him to say that this person is "the one," because he has many professional ties to maintain. If he says your candidate would be one of, say, a half dozen candidates, as why he'd have so many people; listen for whether the answer is trying not to break wide-ranging ties, or if he is hemming and hawing, trying not to say that your prospective agent does not have his full faith and confidence.
No one likes dumping money into a home she is about to move out of, but a coat of paint can do a lot to refresh an older home. And while prospective buyers generally don't purchase your furniture, they do notice the way you live; cluttered closets, for example, look small and make people wonder if they will run out of space.
Ask what can be done to get your house in the best condition to be shown. Plan to do the work early, so you don't have to rush around at the last minute before a prospective buyer shows up.
The earlier you meet with an agent, the more valuable her input can be, and the more you can enjoy some changes that may have to be made. Again using my parents as an example, the agent who handled the sale told my folks when she first saw the home that there were certain issues that would have to be resolved, such as changing an old glass sliding door. My parents might have enjoyed the family room for the last few years they lived in the house with the upgraded door that they put in to meet the buyer's demand for an upgrade. Instead, they spent the money to make the fix, but never really got to enjoy it.
What price range would you suggest for my home and why? If the house stays on the market, when and by how much will we lower the asking price?
This is where the agent details the comparative market analysis and tells you what he thinks you can get for your house. Obviously, some level of agreement between you and the advisor is necessary.
What you are listening for is a fair market price based upon current market conditions and the urgency of your need to sell, as well as a strategy that makes sense if the house doesn't attract buyers and you need to cut your price to get more interest.
Don't be impressed by big numbers; some agents price everything high in order to impress potential clients. After the contract is signed, the house goes on the market at an inflated price before dropping to the more reasonable price suggested by less-aggressive (or, perhaps, more scrupulous) agents.
If the projected price is below your expectations, find out whether the agent's calculations or your impressions of the home are what is askew.
Make sure you know the agent's feelings about how long a home should sit on the market before dropping a price because you do not want the relationship with the agent to deteriorate later if there are pricing surprises. Many homeowner-broker relationships sour when the parties disagree on the next pricing move; since you both make money on the sale of the home, you are teammates, and you'll function best if you agree on strategies before the game begins.
Who are the best agents in townâbesides yourselfâand why?
Unlike virtually every other form of financial advisor, real estate agents are in a cooperative situation. A lawyer can sit in a corner office and write and file paperwork for you, an accountant can crunch numbers, and a financial planner can develop a strategy all without consulting anyone.
But real estate agents can't close the deal without working with their peers. Real estate is a small community where most of the local players know of each other (at least by reputation). If your agent can't say a nice thing about anyone else in the field, then chances are that he doesn't work well with those people. That is not good.
Asking this question lets you see what an agent admires in his peers. It's also a pretty good list of professional references, because the names you get represent the competition. If you call, say, a lawyer whom the agent works with, there is a potential bias because the agent may routinely refer clients and the lawyer doesn't want to lose that business. The competition has no reason to say something nice, especially if they might be interested in your business for themselves.
Could I get the names of a few recent sellers (or buyers) who you have worked with?
Unlike many other financial advisory relationships, where confidentiality and privacy are major concerns, you should have little trouble getting the names of references from a real estate agent. Property transactions are public record, so the confidentiality issue is moot.
Don't just accept the names of friends or relatives who referred you in the first place, as in "Why don't you just talk to your Uncle Morty about that? You know how he feels about me." This is your biggest investment and a bad advisor can cost you a lot of money, so make sure you talk to more than one reference. In fact, try to find references who had to deal with this agent in different circumstances, possibly one whose home sold quickly and another whose house sat on the market for months.
What can I do to make myself a better buyer?
If you are buying a home, there are ways to make bids more attractive, such as being preapproved for a mortgage so that the deal can be written without a mortgage contingency. This question will give you insight into the kinds of strategies a buyer broker thinks will work, both with lenders and sellers.
Can you assist with financing?
Real estate agents often track interest rates and have contacts with favorite lenders who can speed the application process. That not only comes in handy when you buy a home but, years later, when your agent may be able to say who can help you pursue refinancing, home equity lines of credit, reverse mortgages, and other options. (A good real estate agent knows which bankers bend the rules, flexing standard industry formulas to improve your chances of getting, say, a home-equity loan.)
Do I need a "reality check"?
A reality check is where an agent puts you in the car and drives you around to look at other properties. As a seller, she is showing you that your expectations are unreasonable compared to similar homes in similar neighborhoods. For buyers, a reality check may be to prove that you have too little money to afford the neighborhood and that perhaps you need to adjust your hopes and dreams down to the size of your wallet.
How often will I hear from you?
Obviously, the agent should contact you the moment she has an offer (or a home she thinks might be right for you). The question is what happens when nothing is happening.
You should hear from your agent enough to quell your fears and to strategize about the price and marketing strategy (or whether to widen your search area because no homes are available in neighborhoods you desire). Generally, those conversations take place weekly, but you should know what to expect because lack of communication is where real estate relationships falter.
Are you planning a vacation soon?
Yes, it's a personal question. Brokers and agents are entitled to vacations like everyone else, but the hot time for activity on a home is when the listing is new, generally in the first three to four weeks after it is listed. That's when every buyer in your price range and interested in your communityâand every broker working with a prospective client in your areaâwill want to see the house. If you are putting your house on the market and need it to sell quickly, you may not be comfortable having your agent on the road during the first few weeks.
Does a vacation automatically disqualify an agent? Absolutely not. There is an adage in the real estate business that when brokers go on vacation, all of their listings sell.
If I sign a contract, how long is the listing agreement good for? Can I change agents without paying a double commission (or would you get a piece of the deal no matter what)? How can I terminate the listing, and for how long after that are you entitled to payment?
The listing agreement is fraught with terms that are to the agent's advantage. Ask about them and read the agreement carefully. Picking the wrong agent is bad enough, but signing a restrictive contract can actually make the situation worse.
Some contracts force you to list with the agent for six monthsâtry to get that cut to no more than threeâand have no termination clause. Before signing a contract, you should know exactly how you get out of it if you change your mind or dislike the service.
Paying a double commission can occur when you switch brokers. Brokers know that lost listings mean lost commissions, and they want to cash in on their work even if you didn't think it was so great. Say someone sees the house today and comes back to see it again in six months, when you have a new agent. If this person buys the home, the first agent may try to get paid for having "brought you the buyer." This is the kind of language you do not want in your listing agreement.
Similarly, say you decide to test the watersâhoping, perhaps, to move to a better place in townâand put your home on the market. A few people come through, but no one makes a worthy offer, and you decide to terminate the listing. Five months later, one of the prospective buyers knocks on your door, wondering if you are still interested in selling, and you like her improved offer. If your listing agreement specifies that the agent gets a commission for six months after termination, you are going to pay that fee on this deal.
There are even listing agreements who can force you to pay a commission without selling the home, rewarding the agent for landing a "ready, willing, and able buyer." If that buyer backs outâsay he gets a job offer or transfer or just cold feetâyou could be on the hook for the commission. Make sure the agreement language does not force you to pay if the deal collapses.
If you go over a standard agreement line by line, you can find at least the potential for unfavorable terms.
In general, listing agreements are designed to discourage you from taking advantage of an agent's time, then bolting to stiff the agent and do the deal on your own. That's fair and reasonable, up to a point; there's a fine line between the planning to stiff a brokerâwhich presumably you will not doâand protecting yourself and your options.
What happens when there is an offer? What's the drill when we find a house to bid on?
For sellers, you want to be walked through the process of will happen once a bid comes in, how the agent feels about counter-offers and pricing strategy, and what he does to get the deal from startâthe first contract with an acceptable offerâto closing.
Buyers, too, want to go over the way a bid works and what the broker's responsibility is when it comes to helping push the deal through.
Describe your nightmare client/house.
This is a good opportunity to hear some funny stories about the agent's worst client, the house that had the ugly shag carpeting that was badly soiled by pets, and so on. In between cringing and laughing, however, listen carefully to hear if the agent is describing you and/or your house.
If you might fit the description of her worst nightmare, find someone else to work with.
Danger SignsBig problems in real estate relationships often involve personality, communication, and interest. Don't sign on with an agentâno matter how highly recommendedâif you don't click. Chemistry is important, because it is hard to build a trusting relationship when the person across the table from you creeps you out.
While personality clashes account for the major problems, they are not the only warning signs to consider. Others include:
- Loss of interest. Almost every broker is excited about your business after first getting you as a client. But he may not be so excited when there is no movement. If your house isn't selling (or you, as a buyer, are extremely picky and not willing to bid on any number of houses that meet your own definition of what you're looking for), keep an eye on whether your broker or agent is doing everything possible to make things work.
- Lack of communication. During your interview, you set a standard for how often you should hear from the agent. Even if nothing is happening, there should be contact on the schedule you agreed to. Even if infrequent calls are acceptable, there could be a communication problemâand a loss of interest, for that matterâif your agent does not return phone calls within six hours. And, obviously, you do not want any surprises. If you call and find out that your broker has gone on vacation without telling you, that's a problem.
- Failure to follow instructions. If you are buying a home and the first few houses the agent shows you are out of your price range or not even close to the description of what you want, the agent is trying to make you more like her average client and fit you into her own comfort zone. Don't go there; you control the relationship.
- In Pennsylvania, Susan and I once worked with an agentâvery brieflyâwhen we were just starting to search for a home. We had little time, a very specific price range, no need to rush into a purchase, finite resources, and definite tastes; when the agent wanted to show us four homes a weekâall slightly above our price rangeâand kept trying to convince us that we could find a way to finance these homes, we felt pressured. The agent had stopped listening to what we wanted and was trying to bring us around to what she wanted, which was to sell a house in her favored price range.
- Maximum commission at your expense. It's understandable that agents hate the idea of reducing commissions, but it's shameful the way some unscrupulous agents nickel-and-dime buyers and sellers. Say you have agreed on a deal, but the home inspection brings up a few issues. The buyer wants the price reduced, the seller agrees to make up the difference, but the real estate agent pushes to keep the original selling price and to have the seller "credit back" money at the closing. That keeps the agent's commission the same, but benefits neither the buyer nor seller. The buyer is not only taking a bigger mortgage to meet the higher price, but could face higher property taxes, since many communities use sales price as part of their valuation of the home. The seller faces a larger capital gain on the home, plus the higher commission. If you have problems like this one, contact the managing broker and complain.
- Incomplete disclosure or conflicts of interest. Interviewing a Real Estate Agent has covered several potential conflicts of interest. If those problems show up, and you were unaware or unprepared, that's a problem. An advisor has a responsibility to remind you that he works for the sellerâunless you have contracted with him as a buyer brokerâand also must tell you if he is acting as a dual agent, representing you as a buyer and the seller as a conventional agent. Failing to disclose these kinds of conflicts is an enormous breach of both your trust and professional ethics.