Your house is one of the biggest investments you'll ever make, so it pays to be a little choosy about who you hire to help sell it.
Be prepared to interview at least two or three agents to find the right person.
Asking the right questions will help you gain insight into the agent's capabilities and personality. Of course, they should be thoroughly familiar with your neighbourhood.
Here, you'll find several essential questions you should ask to help you make the best choice.
1) What are the drawbacks to my home?
- Although it may seem counter-intuitive, ask a real estate agent to evaluate the flaws of your home — it's a great way to learn other important information during the interview.
- For one, if the agent tells you what sounds like legitimate drawbacks, then you know they have a seasoned, keen eye. Not only that, but you'll be able to see that the agent is honest and isn't just going to sweet-talk you into signing a contract.
- On the other hand, if he doesn't point out what you already know are flaws, this could be an indication that he may have only a half-hearted dedication to selling your home. What's more, regardless of what it tells you about the agent, you can use this information in the selling process.
- Knowing your home's disadvantages will give you an opportunity to fix them and a more realistic expectation of the home's market value. Overall, it's a good idea to hire a real estate agent you think will seek out your best interests. Even gut feelings can tell you something.
- You don't want to entrust such an important transaction to someone who doesn't make you feel comfortable.
2) Tell me about similar properties in the area?
- Every real estate agent should be able to give you a Comparative Market Analysis (CMA), which is a listing of homes currently for sale and recently sold in the area. This is your starting point for knowing how your home measures up to others that are selling in the neighbourhood and, most importantly, at what price you should list your house.
- An experienced real estate agent will make this part of the process a priority. A CMA can give you a lot of important information. For example, what types of homes and home features seem to be the most popular for buyers in the area?
- What are homes with similar features to your own selling for?
- How long are homes like yours staying on the market before they sell?
- Arming yourself with this information is a great way to help develop a realistic view of your home's value and sales potential. It will also help you monitor whether you agent's advice is in line with the current market trends.
- Knowing the sales figures for area homes can't tell you everything. Sometimes it takes an expert eye to pick up on the subtle clues to an area's growth trends.
3) Is this area growing or declining?
- When it comes to recognizing trends in the market, real estate agents are on the front lines. They see a lot of growth and decline - some areas can turn from a swamp into a bustling residential area in just a few years, while others can transform from a highly desired neighbourhood into overcrowded city in no time.
- It's easy for most people to see that a suburb with lots of “For Sale” boards might not be growing, but often the signs are much more subtle, especially in the early stages, and your real estate agent can spot the clues. Things like neighbourhood activity, street maintenance and the number of small businesses in the area can all point to growth trends.
- Your real estate agent should be intimately familiar with your area -- it's his job, after all, to know the territory well. This type of knowledge often comes through experience, and sometimes agents even work together to share knowledge and expertise. The next question will help you determine whom exactly you'll be working with.
4) Do you work solo or as part of a team?
- Be sure to find out whether you'll be working with the same Agent all the time or with a team.
- These days real estate teams are pretty common. Whether it's a pair of agents who share the work, a single agent with a support staff behind her or a group of several agents all under one business name, you'll want to know with whom you'll be working.
- There are both positives and negatives to working with real estate teams. One drawback to a team is that you might not always be working with the individual you hired. If you call to ask a question, the agent you're familiar with might not be available or the one who speaks with you. On the other hand, a team could mean that you'll get more attention and personalized service, especially if there are people taking care of the behind-the-scenes work for your agent. If your agent is part of a team, find out what aspects of the work she handles personally and whether you'll be in contact with the other team members or only your agent.
- If the agent works solo, finding out about their current workload is key.
5) How many clients/ other properties are you currently representing?
- This is a tricky question, so you'll have to know ahead of time what you consider to be an appropriate figure. While there's no magic number for how many clients an agent can effectively handle, a number that's staggeringly high, like 40 listings, it could indicate that her time will be divided and you won't get much one-on-one attention. Working with an agent who's difficult to reach or who's constantly with other clients could lead to a frustrating experience for you, or even a negative impact on the sale of your home.
- An agent whose attention is too thinly spread might not take the time to ensure all of your needs are met and could even rush the process by listing your home at too low a price.
- You'll need to weigh the pros and cons to find out if a busy agent can meet your needs, or whether you're willing to compromise experience for more personalized attention.
6) How will you market my home? Who is it aimed at?
- A good agent will tell you a plan for advertising your home, from signs, to open houses, to Internet listings.
- You can't sell a house until buyers know it's there.
- Posting a for-sale sign in your front lawn is all well and good, but what about potential buyers who don't happen to drive by your particular street?
- Out-of-towners who are moving to a new area? In this age of a limitless information superhighway, it's much easier to break down geographic barriers that connect sellers with buyers. One of the biggest advantages that a real estate agent offers you is his access to resources for marketing your home. Ask each agent you interview to spell out his marketing plan for getting your house sold.
- An agent can market your house in other ways too. Print advertising includes ads in newspapers and magazines, or brochures and flyers like the ones you see in waiting rooms and at the entrances to restaurants. However, by far the most common method for selling homes is the Internet with 2 main websites Realestate.com.au and Domain.com.au dominating this area – estimated at over 96% of buyers visiting these sites regularly.
- During this conversation, you should also find out whether the agent has plans to hold open houses. How many and at what times?
7) How do your Real Estate fees work?
- Think about offering a tiered commission structure.
- During the interview, you'll want to talk money. Most agents don't charge a flat fee but take a percentage of the home's final sale price. This percentage varies with each agent, but the commission typically hovers around 2-3 percent of the selling price. This fee can be a hefty sum. So, if you're the seller, you want to know it's negotiable.
- The negotiability of agent commission can depend heavily on the market. In a booming real estate market, commissions might dip lower because homes are easier to sell. On the other hand, when the market is tight an agent might be less likely to budge on her fee. But it doesn't hurt to ask. If the agent commission is a sticking point, consider ways that you can link the agent’s success to your selling price success.
- For example, you might say I’ll pay you an extra .25% if you sell it over $500,000
- Along with commission, it's also important to discuss the agent's marketing costs and cancellation policy (known as an “Authority Period”) Consider what would happen if, after signing an agent, you hear that your father's brother's nephew's cousin's former roommate is interested in buying your house? Find out if she would still be entitled to the full commission. Maybe you'll just become unhappy with the agent or somewhere down the road before the contract expires. Ask about what kind of early cancellation fees may apply to you. A great way to get a feel for the agent's professionalism and tactics is to ask how they've dealt with this situation in the past.
8) What experience do you have?
- An agent's experience is more than just how many years he's been in the business. Other details can give you more insight into their success. The good part is Agent Select has already narrowed down the field to the Top 3 local Agencies with proven experience.
- One factor that speaks volumes about an agent is his list-price-to-selling-price ratio. You get this ratio by comparing the original list price of the property to the price at which it eventually sold. A good agent will come prepared with this number. The rule of thumb is to choose an agent with a ratio as close to 100 percent as possible, which means that his home's final sale prices have been close to the listing prices.
- However, after you hear the number -- even if it's impressively high - you still might want to inquire into the reasons behind it. Perhaps the agent usually has a house sit on the market for a long period of time to get the best price.
- Depending on your situation, you may or may not have the luxury of time on your side. A low number could reveal that the agent pushes sales too quickly. Although logic tells you that an agent is interested in a higher price to get higher commission, time is sometimes more valuable to him. In the agent's mind, he'd be better off spending that time selling other houses.
9) How will you keep me informed?
- Your agent should be easily accessible on his mobile phone and e-mail.
- In most relationships, communication is key. Your partnership with your real estate agent is no different. You need to know, up front, how he will keep you in the loop. This means finding out several factors like what kinds of news he'll update you on, the frequency of updates and how the agent will communicate them. Will your agent let you know about every interested buyer, no matter how serious?
- Ask for details about how accessible the agent will be for you, since you'll have questions and concerns throughout the selling or buying process. Find out what business hours he keeps and -- at the risk of sounding like a stalker -- if you can call him outside of those hours on his mobile phone. Whether he answers e-mails in a timely fashion will also become important down the line. Hopefully, he'll have positive responses to these questions, but it's always smart to verify them.
If you need any assistance with interviewing the Agents please call us on 1300 040 463.