What questions should you ask a REALTOR® when you are interviewing them?
For most people their home is their largest single asset. When they hire a real estate professional they want to ensure that not only is the person well qualified, but also that the person will provide superior service. To determine the real estate professionals qualifications and service level, buyers and sellers need to ask the right questions.
I have written down the list of questions I would ask as well as why I believe the question is important.
- How long have you been working as a Realtor? – A minimum of two years of experience is a must. An experienced Realtor will have the knowledge and expertise to advise you as you make critical decisions in the purchase of your home. Without the knowledge and expertise of an experienced Realtor, you could be putting your new asset at a risk.
- Are you working in real estate full-time or part-time? – Real estate is a fast paced business that requires specific deadlines to be met. If a REALTOR® is only working part-time, I would ask how they handle conflicts between their other job and your real estate transaction.
- Do you have a written marketing plan for my home? – One of the most critical factors that determines how quickly a property will sell and at what price is the marketing that is done for a property. Your REALTOR® should provide you with a detailed marketing plan that outlines the marketing activities that will be performed while your home is on the market and a rough timeline of when these activities occur. The marketing for a property can vary substantially between REALTOR®, so this marketing plan is critical in comparing REALTOR®.
- How many real estate transactions do you close each year? – Experience is a critical factor in hiring a real estate professional. In my opinion a REALTOR® needs to close at least 16 transactions annually (4 per quarter) to stay sharp and understand the market. In metro Denver the average real estate agent closes 7 transactions a year.
- How many homes in my neighborhood that are currently on the market have you toured recently? – Your REALTOR® should have toured all of the homes that are currently on the market in your immediate neighborhood before providing you a price opinion of your home. When properly pricing a home, you not only need to understand what properties have sold for in the neighborhood recently, but you must understand the condition and pricing of other homes currently for sale. Prospective buyers will be looking at other homes in your neighborhood and you need to know the condition and pricing of these homes. You are competing against those other listings for the buyers purchasing in your neighborhood.
- What is average days on market for homes you have listed in the last two years and how does it compare to the market average?
- Most people want their property to sell quickly. An average days on market that is less than the market average normally indicates a Realtor who does a great job marketing properties and provides solid pricing information to sellers as they price their home.
- Also have the REALTOR® explain why their average days on market is better or worse than the market average. Situations do arise where a home might be on market substantially longer than the market average through no fault of the REALTOR®. A few examples of these situations are 1) homes that back to busy roads 2) homes that have structural issues 3) homes that are unique for their neighborhood.
- What is the average sales price to list price for homes you have listed in the last two years and how does it compare to the market average?
- This statistic helps provide insight into the REALTORS® pricing strategy and ability to successfully negotiate on your behalf. This statistic is stated as a percentage, such as 96%. A 96% sales price to list price ratio indicates that sellers received 96% of the listed price of the home. Ultimately the selling price depends on the home owners need and urgency to sell, but a favorable sales price to list price ratio compared to the market average shows the REALTOR’S® strength in negotiation.
- Also have the REALTOR® explain why their sales price to list price average varies favorably/unfavorably from the market average. Situations do arise where a seller might need to take an offer substantially below list price, such as a divorce situation or corporate relocation, and this is not a reflection on the REALTORS® ability to negotiate.
- Will you help me stage my home to sell? – Real Estate Staging is the art of decorating a home in a way that creates a “stage” upon which a potential buyer can imagine their life being lived. People make the decision to buy a home within the first few minutes after walking through the front door. Staging maximizes the first impression and presents the home as a warm and inviting space. Your REALTOR® should provide you a staging report on your home or hire an Accredited Staging Professional (ASP) to provide you this information. Staging is one of the best ways to differentiate your home from the others in your neighborhood, especially in a slower market.
- How do you market my home on the internet and more specifically on Realtor.com?
- This question should be answered as part of the written marketing plan, but it is a very critical piece of the marketing plan. According to the 2005 National Association of REALTOR® survey of Home Buyers and Sellers, 90% of buyers used the internet to search for homes. 75% of buyers drove by or viewed a home they found on the internet. 98% of buyers found photos of the property useful, 98% of buyers found detailed property information useful and 85% of buyers found virtual tours useful on the internet. Any marketing plan should include posting at least 5 photos of your home online (not just 1 photo), posting a virtual tour of your home online and posting detailed, customized marketing descriptions online.
- 54% of home buyers used Realtor.com during their online home search. All homes in the MLS system appear on Realtor.com, but only with 1 photo, a virtual tour and a basic bullet point description. Realtors can purchase additional features on Realtor.com that allow them to post additional pictures and customized property information. Make sure your REALTOR® has purchased these additional features on Realtor.com
- You will also want to ensure that your agent and their company has a strong presence on the internet. Go to Google.com and place the agent’s name or company in parenthesis and see how many matches show up for each. I think that an agent should have over 500 matches and the company should have over 50,000 matches.
- Do you provide a written service guarantee? – When you sign a listing contract with a REALTOR® in Colorado, you are legally bound to list your home for the time period stated in the contract. The contract does not allow you to terminate the agreement if the REALTOR® does not perform up to your expectations. You can only terminate the agreement if the REALTOR® has provided you with a separate written service guarantee. A written service guarantee allows you to terminate the listing agreement at any time if you are not satisfied with the REALTOR’S® service. If they don’t provide a service guarantee, you will be stuck with the agent regardless of the quality of work they perform during the term of your representation agreement.