1. How Long Have You Been in the Business?
While I am not suggesting that you hire some aging geezer with a cane, experience does count. It can mean the difference between knowing how to handle a difficult situation to ignoring it or not recognizing the signs of a potential problem before it develops into a crisis. Minimum of five years’ experience and 60 transaction.
2. Average List-to-Sales-Price Ratio
When hiring a listing agent, expect to see list-to-sales ratio within 97% to 100% in a buyer’s market; in a seller’s market: 100% to 110% of list price. When hiring a buyer’s agent, expect to see list-to-sales ratios within 90 to 97% in a buyer’s market; in a seller’s market: 100% to 105%.
3. Best Marketing Plan / Strategy
As a buyer, you should expect to see 5 to 10 homes a day, for as long as it takes to find your home. All the homes should fit your parameters, and the agent should preview those homes for you. The agent should also agree to solely represent you and not represent other buyers who are competing for the same inventory. As a seller, you would like your agent to advertise weekly for you, send e-flyers, produce color brochures, and present you with a marketing campaign designed specifically for you. These days internet presence is critically important. Ask for a list of where your home will be advertised online and if they will be using Virtual Tours.
Test their presence on the internet by placing their first and last name into Google. If they appear one or two times they have some presence. If they monopolize the first search page and maybe more, then that’s what you need, especially in a buyers market. When you score their Marketing Campaign, their e-Marketing should carry 80% of the weighted score. It’s that important to getting your home sold.
You should be able to find references on an agent’s Web site. Ask if any of their clients would be willing to talk to them by phone. Some will and others like their privacy. Look for a Testimonial page on their website.
5. Top Items That Make the Agent Different
Examples can range from marketing to knowledge. Acceptable answers are:
- Strong repeat record of satisfied customers
- Extensive online marketing
- Good negotiation skills
- Assertive but knows when to take no for an answer
- Strong communicator.
- Excellent formal education (In some states you can obtain a real estate license without a high school diploma)
- Excellent real estate education
- Good business background
6. Review of Documents
As a buyer, ask to see a sample purchase agreement and ask the agent to point out your cancellation rights in this document. If the agent hems and haws, or hesitates to explain the purchase agreement to you, hire another agent. As a seller, ask to see the listing agreement. Ask about reserving the right to sell the home yourself. If you see a fee you do not understand, question it.
7. Affiliation with Related Professionals
Ask the agent if the title company she recommends charges competitive fees. All agents build teams of professionals, from title companies to escrow officers to mortgage lenders, home inspectors and appraisers. Ask if the agent’s company is receiving compensation for the referral. If so, you might want to choose another professional. Payment of some referral fees are against the law.
8. Agent Fees
All fees are negotiable. If you are a buyer, ask the agent if the fee stated in the buyer’s broker agreement will be adjusted if the offered seller’s compensation is lower. If you are a seller, ask about discounted fees. Sometimes agents will match fees offered by other agents. Use a little caution here. Not all agents and skill sets are the same. Your working with a lot of money as part of this investment. It can be analogous to needing an operation and choosing the orderly for the operation or a Surgeon that has performed the operation countless number of times successfully.
9. Personal Guarantee
If the agent will not release you from a listing agreement prior to its expiration upon request, then you should hire another agent. Ask about it before you sign a listing agreement. Ditto with a buyer’s broker agreement. Some agents will release you; others will not.
10. Other Questions
You might ask the agent to reiterate your goals and objectives. If the agent does not appear to have a thorough understanding of what you want, despite your attempts to explain what you want, then hire somebody else.
Some agents do not listen very well. You want an agent who will listen to you and communicate with you. The best way to find out if the agent comprehends your desires is to ask the agent to repeat it back to you. Go Back to Hiring a REALTOR®: Questions That Need Asking.