Questions to Ask a Potential Realtor

[travelover]

I'm getting ready to sell my home and have read the Dummies book. Next week I will interview three Realtors. The purpose of this post is to solicit questions based on mistakes / experiences you may have had that I should be cautious about.

The house is in an upscale Midwest suburb on 1.5 acres of land. The house is OK, but 6 of 33 homes have been torn down and replaced with 5000+ sq ft homes in the last 10 years. A house two doors down just sold for $450K as a tear down on two acres.

Based on your selling experiences, what question(s) do you wish you'd asked?

 

[W2R]

I'm getting ready to sell my home and have read the Dummies book. Next week I will interview three Realtors. The purpose of this post is to solicit questions based on mistakes / experiences you may have had that I should be cautious about.

The house is in an upscale Midwest suburb on 1.5 acres of land. The house is OK, but 6 of 33 homes have been torn down and replaced with 5000+ sq ft homes in the last 10 years. A house two doors down just sold for $450K as a tear down on two acres.

Based on your selling experiences, what question(s) do you wish you'd asked?

I really like my real estate man, who I have used for a long time. He did an exemplary job for me in buying two houses and selling one over the past fifteen years. So anything I say is not based on having a poor real estate man but instead are based on thinking back about the good qualities he demonstrated for me.

You should ask him what asking price he would list the house for, and expect him to provide specific comps to back up his estimate. He should provide you with hard copies of these comps, and they should seem reasonably comparable to your home. If not, you should question him closely about them and point out differences that you see that could affect the price.

Ask him what repairs or renovations he wants you to do before putting the house on the market. Does he want you to stage the house? Move out? Or what?

Ask him how he plans to market the house.

Ask him if houses are selling well in your area, and what the average "days on the market" is.

Ask him how often he will stay in contact with you, and what he expects from you as a seller.

Ask him how many years of experience he has doing real estate in your specific suburb.

Ask him if he works full time, and how many houses he sells per year. If he claims to sell a lot of houses each year, find out tactfully if he will be handling this sale himself or if he will pass it off to assistants that are younger and less experienced realtors.

Overall, I think it's important to get somebody that you can easily communicate with and vice versa. And, he should have a lot of experience successfully selling real estate in your area, he should knock himself out marketing the house, and he should stay in contact with you.

 

[gromit]

Before hiring a Realtor, you might want to look into whether a developer was involved with building any of the new large homes. If so, approach them to see if they are interested in a direct sale, without an agent. Decide on an asking price before talking to them, rather than asking for their (lowball) offer. Zillow's property history will show you the dates a property sold, but not the owner names. Many counties have detailed property tax records that are searchable online.
Looking into this may get you nowhere, but I do know someone that sold a home in this fashion.

 

[MBAustin]

We last sold a house 6 years ago, when the market was down. We got the following advice about choosing between 3: "never believe the higher one... the lower one is usually hungry and just wants to get any commision... and the middle one is usually about 2-5k too high". What we found, though, was that the quality (or lack thereof) of the competitive market analysis and the recommendations about what upgrades to make were the distinguishing factor. We actually interviewed 4 - one a specialist in the neighborhood we lived in, one who is a fellow church member, one was a former colleague of our buyers agent, and one had a particular marketing angle that intrigued us. The neighborhood specialist surprisingly recommended some very strange upgrades (replacing perfectly good faucets for example). The market analysis from two others was seriously lacking in rigor, so we went with the colleague of our buyers agent.

Interestingly, after we had completed the upgrades (paint all rooms Kilim beige, replace upstairs carpets (downstairs was hardwood and tile), tidy up the landscaping and plant some flowers, and replace several dated light fixtures) and staged it professionally, he increased his proposed listing price quite a bit after doing more market analysis. We ended up listing it for less than he suggested because we wanted it to sell quickly, and we ended up with a full price offer within a week. Probably could have gone higher, but we were happy.

No specific questions I wish I had asked that I didn't - we were pretty thorough with all 4 of them.

Good luck!

 

[MichaelB]

You should ask him what asking price he would list the house for, and expect him to provide specific comps to back up his estimate. He should provide you with hard copies of these comps, and they should seem reasonably comparable to your home. If not, you should question him closely about them and point out differences that you see that could affect the price.

Ask him what repairs or renovations he wants you to do before putting the house on the market. Does he want you to stage the house? Move out? Or what?

Ask him how he plans to market the house.

Ask him if houses are selling well in your area, and what the average "days on the market" is.

Ask him how often he will stay in contact with you, and what he expects from you as a seller.

Ask him how many years of experience he has doing real estate in your specific suburb.

Ask him if he works full time, and how many houses he sells per year. If he claims to sell a lot of houses each year, find out tactfully if he will be handling this sale himself or if he will pass it off to assistants that are younger and less experienced realtors.

Overall, I think it's important to get somebody that you can easily communicate with and vice versa. And, he should have a lot of experience successfully selling real estate in your area, he should knock himself out marketing the house, and he should stay in contact with you.

Excellent list, can't add much to it, and chemistry matters.

When interviewing agents I noticed big differences in the comps they presented. A few put a lot of thought and effort into them, most others very little. This is critically important, as it is the basis for your price. Thoughtful comps didn't just compare similar size homes in the same zip, they went much deeper and included the strengths and weaknesses among the different properties.

The other area I focused on was what specifically they were going to do besides list on the MLS. There were lots of non-specific and evasive responses interlaced with real estate jingo. When someone had something concrete and specific to say, it didn't take long and wasn't difficult. Would they do virtual staging, how many photos, how many 360 degree videos, how many pages of detailed home and community info?

 

[travelover]

Great responses so far - I'm taking notes.

When and how should I approach the negotiation of commission fees? I feel like 6% is excessive in my market for my house.

 

[spncity]

Ask for a list of houses he or she has sold in the past 12 months with the listing price and selling price.

 

[braumeister]

Another good technique is to visit open houses and talk with the agent. You can get a good feel for his or her personality and how the chemistry would work between you.

 

[fishndad42]

If he claims to sell a lot of houses each year, find out tactfully if he will be handling this sale himself or if he will pass it off to assistants that are younger and less experienced realtors.

Ditto. Had a neighbor realtor that sells a lot of lakefront homes in our area. Ours was lake access, across the street from the lake. I guess that wasn't good enough for him, and suddenly we were dealing with a part time ditz that apparently also had some personal issues. So even a neighbor can go awry, so you are doing a smart thing by shopping for the right realtor.

 

[Sunset]

Ask the realtor to tour the house and suggest what needs to be done and why.

I did that and 1 realtor spent 3 hrs with us talking about every room in the house, the other realtor spent 30 minutes.

I went with the one that showed a lot more interest and had suggestions of what to change/fix/leave alone.

 

[audreyh1]

We talked to three different realtors and I was glad we did. We had certain goals and found the realtor that matched. One of the realtors- the one with the fanciest resume/most experience - was shocked, shocked that we didn't pick her, and had talked to other realtors. She was absolutely convinced that we had used her for the comps and shared that info with the realtor we picked. Each realtor brought their own comps - can't imagine why she thought otherwise. The realtor we turned down kept going on about updating the house, changing light fixtures, etc. Sorry, we were simply not interested in updates and had been pretty clear that we hoped to avoid that approach.

House sold in 10 days, 2 days to closing. Cash deal, sweet! And price at least matched a recently sold identical floor plan down the street that did have some fancy upgrades (which only one of the realtors seemed to know about). But our buyer didn't care - location and size/one story (single senior compatible) were what mattered to him.

 

[athena53]

The neighborhood specialist surprisingly recommended some very strange upgrades (replacing perfectly good faucets for example).

HGTV is my channel of choice in the gym and people can be VERY superficial. Having been through this process myself in the last year, I'd say do anything that's cheap and superficial. Our realtor noticed that the light by the garage was corroded and suggested painting it a flat black or white. Done in 10 minutes for the cost of the paint. I also replaced our door/cabinet hardware. That was more time and money, but the originals were worn and dated.

Negotiating commission is a real challenge. This is ancient history but a realtor who worked with me on buying my first house in 1979 said that her agency had a policy against it. When I divorced in 1997, the realtor offered without asking to cut her fee by a percentage point because I was selling and buying the new one with her, but asked that I keep it confidential. It all reeks of collusion to me, but that's what I've seen.

I agree with the advice to ask what they do besides put the house on MLS. This is actually related to the commission question. Ours brought in a stager (she used our furniture but told us what to remove, what to rearrange, etc.) and a professional photographer. Both were at her expense. If they cut the commission you may get less. The house we bought had been on the market a couple of months and had been shown only 4 times even though it was a beautifully-maintained architect's original on a small lake. Our realtor said the place hadn't been marketed very well.

I also tend to look for a realtor who's been though a down cycle. Sadly, that cuts out a lot of beginners who might be good and who need to start somewhere, but if they've been through a bad cycle and are still there, you're getting a lot more wisdom and insight. That helps when you're trying to set a listing price, making decisions about whether to lower it, or deciding how much to offer on a house you're buying.

 

[travelover]

..........
Negotiating commission is a real challenge. This is ancient history but a realtor who worked with me on buying my first house in 1979 said that her agency had a policy against it. When I divorced in 1997, the realtor offered without asking to cut her fee by a percentage point because I was selling and buying the new one with her, but asked that I keep it confidential. It all reeks of collusion to me, but that's what I've seen.
...........

Thanks. I'm scratching my head over this. It doesn't seem like it is twice as much work to sell a $400,000 house as a $200,000 house, but I'm sure agents think differently.

The Dummies book maintains that the buyer's agent should get 3% regardless, in order to encourage all prospects. I can see where the seller's agent might not like this, but it makes sense to me.

 

[MichaelB]

With our recent sale the commissions varied between 4.5% to 6%. The realtor I chose charged 5% if the home took longer than 30 days from list to contract and 4.5% if less. The selling agent defines how the commission will be split, that info needs to be included in the listing. When we worked with a buyers agent (many moons ago) he required an agreement that we would guarantee 2% to him, that seems to be the minimum that buyer agents need to see. If evenly split (most likely), you would be paying 4%.

 

[gcgang]

We just accepted an offer on our house, although it is now contingent on the seller selling their house, so we are still officially on the market.

The strange thing about it, in the offer/counter offer stuff, our realtor urged us not to negotiate further, and offered to cut her commission to zero! Why would she do this?

We Werent comfortable not paying her anything, and told the realtor we would split the difference, still giving her 1.5%.

Anyone have any insight into why she'd make this offer?

 

[travelover]

..........
Anyone have any insight into why she'd make this offer?

Is she also representing the buyer?

 

[W2R]

We just accepted an offer on our house, although it is now contingent on the seller selling their house, so we are still officially on the market.

The strange thing about it, in the offer/counter offer stuff, our realtor urged us not to negotiate further, and offered to cut her commission to zero! Why would she do this?

We Werent comfortable not paying her anything, and told the realtor we would split the difference, still giving her 1.5%.

Anyone have any insight into why she'd make this offer?

She apparently was totally convinced that the buyer would not budge a dollar on the price.

My guess is that she likes you a LOT, or else she knows the buyer, or else she just wanted to improve her sales statistics for some reason. Did you ask her?

Here, normally the percentage that goes to the realtors is divided 4 ways; 1/4 each to buyer's agent and seller's agent, plus the other 1/2 is equally divided between both agents' real estate agencies for overhead. So, even if she was willing to forgo her own fee, somebody had to be paying her agency I would think.

Good luck! Those contingency offers can be such a headache. I hope it has a time limit.

 

[gcgang]

She said she just wanted us to be happy.


No, she's not representing the buyer, who is also a real estate agent for another firm. The final agreement lists 3% to buyers agent, who is the buyer, and 1.5% to our agent.

Our realtor is not just an agent, she Is one of two main partners in her firm.

 

[Fishingmn]

Thanks. I'm scratching my head over this. It doesn't seem like it is twice as much work to sell a $400,000 house as a $200,000 house, but I'm sure agents think differently.

The Dummies book maintains that the buyer's agent should get 3% regardless, in order to encourage all prospects. I can see where the seller's agent might not like this, but it makes sense to me.

Full disclosure - I'm a Realtor.

Wouldn't your logic on the $400k vs $200k house actually then lead you all the way down to whatever the lowest price homes are in your market?

I totally agree that changes are coming to the way real estate is sold but for the time being the structure is what it is. Maybe some day Realtors will just get paid $50-100/hour whether they sell the house or not but I think a lot of sellers wouldn't really like that structure either.

That said, I think commissions are too high. I think there's a concerted effort among brokers to try and keep them as high as possible. Mainly that helps more agents stay in the business in order to keep paying splits and monthly fees to the brokers. I really don't think there's often a connection between what you pay the agent and the quality of the agent. So often people just blindly charge 6% in my market.

Also, your 2nd paragraph above is not right. Every market is different and you should probably pay the buyer's agent close to the going rate in that market but that changes wildly. In the Twin Cities the split is 2.7%, in Rochester MN it's 3% and in Red Wing MN it's 2.4%. Even with these splits you can probably get away with offering a little less (unless the agent's broker mandates a certain split like mine does at 2.7%). For example, I just sold my parents house in Rochester. The going split there is 3% but I only offered 2.7% which is the going rate in my Twin Cities area. Your Dummies book may maintain that this was dumb since agents will steer their clients away from the home but I believe that agents these days have much less power to do that since buyers have taken over so much control of deciding which houses they want to see and buy.

My standard commission rate is 5.5% which includes a staging consultation with designer & professional photographer. I have actually started a new offering which says you get a 4.7% commission if you pay $500 of non-refundable commission up front. The idea is for the seller to cover my costs regarding the stager, photographer, sign installation and marketing. In so doing, I will offer a lower commission knowing I won't end up losing money if the house doesn't sell. Maybe see if you can negotiate something like that? Most agents will probably say no (I know of no one else doing this) but worth a shot to be creative.

In reality I think my biggest opportunity to influence the sale price is help the seller get it staged well and attract clients to see it via great pictures. Beyond that, the market and a willing buyer will dictate the price.

YMMV

 

[athena53]

I have actually started a new offering which says you get a 4.7% commission if you pay $500 of non-refundable commission up front. The idea is for the seller to cover my costs regarding the stager, photographer, sign installation and marketing. In so doing, I will offer a lower commission knowing I won't end up losing money if the house doesn't sell.

DH and I would have loved an offer like that! We were serious about downsizing and had confidence in the realtor because we'd worked with her before.

One thought in the question about whether it takes any more work to market a $400K house than a $200K house- I think that the larger potential commission (in $$) gives the realtor leeway to do a few more things that might cost money such as staging or a professional photographer. When I sold a house in NJ ($400K range in 1997), the realtor had an Open House just for brokers, with munchies from the local caterers, to get their thoughts on the marketability of the house and to let them see it before it went on the market. Although Open Houses have fallen out of favor, I think the house we just bought would have benefited from a realtor Open House because of its beautiful lakefront setting in an area not known for lakes. I found it while browsing MLS and DH and I are still marveling at our good fortune in finding it!

 

[travelover]

Thanks for all the input. Interviewed three agents.

#1 is about 70, a broker and an agent, has high ratings for integrity and satisfaction. Knows the area well and lives locally. Assures me I would work only directly with him. Came with comps and a professional summary of him and his company.

#2 is 60ish, but uses a photo from when she was about 40, which seems a little disingenuous. She is 3rd highest seller in town. Would not give me comps unless I hire her. Knows the area very well, but has her assistant do all the computer stuff because "she is not good with computers". Gave me a printout of my home's information off the township website.

#3 is the number one selling individual agent in the area, about 50, also has his broker's license. Office is just him and an assistant. Advertises very heavily and does an amazingly high volume for a one man band. Came with a list of comps and a packet containing references and information about his company. All business, but a human dynamo.

I leaning toward # 1 because above all else, he seems to have high integrity in addition to experience. #2 turned me off with her personality and refusal to provide comps. #3 gets good feedback on line, though with all the balls in the air, I'm amazed that he can be adequately responsive.

I'm still waiting for personal references from #1. When I receive them, I'll make a few calls and base my final decision on their recommendations.

Anyone see red flags?

 

[MBAustin]

I would run from #2.

Did either #1 or #3 make any suggestions regarding upgrades/repairs/etc? We got basic info from all we interviewed before making a decision (although the full marketing proposal came after we decided).

If the references check out and all else being equal, I would also probably go with #1.

Good luck!

 

[rodi]

Timely topic.

DH is in process of trying to get his mom's house listed. (She moved to memory care in a different state than the house). It took a while to get the legal authority in place because of some snags in transferring the guardianship papers from old state to new state.

He's had 3 realtors go through the house. His BIL arranged to be there to let them in to see the house. One was a real PITA to get to show up... and when he did he didn't follow up with email or phone contact. The other two had good advice on what needed to be done. One of them was willing to put together some quotes for the needed work - knowing it's a price sensitive issue. (Home is not expensive so spending $30k is out of the question.) The other just listed the work she wanted done... but couldn't offer assistance in helping arrange it . Remember - DH is 2500 miles away - so finding/hiring contractors is not easy.

The one willing to work a bit is the one we're going with. Her commission was the same as the others, but she seems willing to work for it. The home is in a good school neighborhood but is dated. The fixes we agreed to were relatively low end... replace carpet with laminate floors, paint, fix 2 spots of termite damage.

 

[travelover]

........Her commission was the same as the others, but she seems willing to work for it. .........

At what point did you discuss commission? None of my three mentioned it in the initial interview.

 

[MichaelB]

For me, upfront, first meeting. One volunteered it, the others I asked.