While home sellers have become more market savvy than ever thanks to the wealth of information at their fingertips, knowing how to choose a real estate agent can still pose a challenge.
Between recommendations from friends, a family member with a dusty license on the shelf offering to help, and a dizzying array of review websites, it’s difficult to know who to trust with one of the most complex financial decisions of your life.
One of the advantages of selling to Opendoor is that you get the certainty of a competitive offer and you can move on your own timeline. If you’re selling the traditional way, it is crucial to know which questions to ask so your real estate agent can meet your expectations in terms of pricing, timing, and overall experience.
In this guide, we’ll break down each of the questions to ask when choosing a realtor:
- How long have you been a real estate agent?
- In which neighborhoods do you specialize?
- How many clients are you representing right now?
- What is your marketing strategy?
- What is your success rate?
- How much do you charge and what’s included in your fee?
- Can you provide references?
- Can you also help me find a home to buy?
1. How long have you been a real estate agent?
This question is not as straightforward as it sounds. Ultimately, the answer depends on how one defines being an agent.
Many people hold a real estate license and don’t actively practice. Someone may have been licensed for 30 years, but if they’ve only represented a handful of clients, their tenure as an agent doesn’t necessarily speak to their experience. Delving deeper into how many clients they’ve represented over their career will give you a better idea of their experience level.
- Quick tip: Real estate agents are governed by the laws of the state in which they are licensed and each state department provides the ability to look up license status, including the date issued, any licensure lapses, as well as any past or current rules violations, using the agent’s license number. The Arizona Department of Real Estate provides a good example of the information you can gather.
2. In which neighborhoods do you specialize?
Aside from negotiating the best possible price for the sale of your home, perhaps the greatest value a real estate agent can add is their knowledge of the local market. A true neighborhood expert will know about all of the recent transactions that have occurred in your area, why a particular home on your block sold quickly or slowly, in addition to everything that is desirable about your location. This knowledge also enables the agent to properly price your home.
→ We combine neighborhood comparisons with unique inputs from you and our deep experience to give you a competitive offer on your house. Request a free, no obligation offer from Opendoor.
Don’t be shy to ask the agent to share a list of their transactions for the past 12 to 24 months. If they haven’t represented a seller in your neighborhood in the past two years, you may want to dig a little deeper into their familiarity with the area and inquire as to what makes them an expert. This list should be easy for any real estate agent to pull from the Multiple Listing Service (MLS).
It’s crucial to know which questions to ask so your real estate agent can meet your expectations in terms of pricing, timing, and overall experience.
When reviewing the list, pay particular attention to which party the agent represented. In addition to having neighborhood specialties, many agents also specialize in either buyer or seller representation. While most people casually refer to the agents in the transaction as the “buyer’s agent” and the “seller’s agent,” beware that the technical terms for these roles are “selling agent,” (the agent representing the person to whom the home is sold, or, the buyer) and “listing agent,” (the agent representing the person who has listed the home for sale).
3. How many clients are you representing right now?
It can be tempting to think of choosing a real estate agent as a popularity contest. If everybody else is using the top agent in town, then you should too, right? Not necessarily.
Rather than gauging how popular an agent is, what’s important is to understand the agent’s communication style and availability to ensure that it’s aligned with your expectations.
In many cases, an agent may be part of a larger team. Team size is of particular importance when selling a home. It takes a village to properly market, stage, negotiate, and close a home sale. Before agreeing to work with a listing agent, be sure to get a clear idea of all the players you’ll be working with throughout the process and who you will be communicating with from the team.
Agents who have multiple listings on the market at one time will often have an assistant to manage the day-to-day processes of preparing your home to go to market. Be sure your agent understands your expectations of their involvement.
4. What is your marketing strategy?
Any real estate agent who wants to represent you and the sale of your home ought to have a clearly defined marketing strategy that is appropriate to your specific property. By and large, when your home is listed on the MLS it will automatically appear on most of the well-known real estate search sites. In other words, getting your home to appear online is no great feat.
Here are a few key marketing questions any qualified listing agent should be able to address:
- Will you have professional pictures taken? The quality of listing photographs can make a huge difference in the amount of interest your home receives from potential buyers.
- Will you offer staging advice? Staging a home can make it easier for buyers to visualize a property as their future home. A real estate agent should have experience staging other properties and be able to provide guidance.
- Will my home be included in the local paper? If so, be sure to ask if this is included in their fee of if you’ll have to pay extra out of pocket.
- Can you share examples of marketing materials used for previous sales? This will help you get a sense of the quality level of the agent’s marketing.
5. What is your success rate?
Past performance can be an indicator of future success. But when considering a real estate agent’s professional scoreboard, remember that their stats are relative both to other agents competing for your business as well as the market as a whole.
These are the three stats you’ll want to inquire about when interviewing an agent to sell your home:
- How long do your listings take to sell compared to the median days on market? In order to get an idea of how quickly an agent can sell your home you’ll need to compare their stats with the overall market. If their listings sit longer than the market median, they could be pricing their properties too high or not marketing aggressively enough.
- What is your average sale-to-list ratio? The sale-to-list ratio is the ratio between how much a home is originally listed for compared to its eventual sale price. A sale-to-list ratio of 100% indicates a home that sells for exactly what it was listed for. Again, you’ll want to compare this to the average for the local market to get a sense if your agent is outperforming or underperforming the market.If the median sale-to-list ratio in your neighborhood is 105%, meaning the typical home is selling for 5% more than the asking price, and the agent you’re interviewing has a personal sale-to-list ratio of 95%, meaning the typical home sale they represent goes for 5% less than the asking price, you may have cause for concern. If their performance seems sub-par compared to the market, be sure to ask why, as there may be a plausible explanation.
- What is your total sales volume for the past 12 months? This metric is relative and often relied on too heavily as an isolated indicator of success. You’ll want to see a healthy number of sales for the year. Sales volume, both in the number of homes sold and the overall dollar amount over a given period, is most useful when considered along with client satisfaction.
6. How much do you charge and what’s included in your fee?
As the seller, you will be paying both your listing agent’s and the buyer’s agent’s commission out of the proceeds of the sale. The agent’s broker initially sets the fees and you should get a list of what’s included in the fee, how it’s distributed between all parties, and a breakdown showing what you will ultimately net from the sale.
For years the “traditional rate” was 6% in most cities, with 3% going to the listing agent and 3% to the buyer’s agent. With the many alternatives to the traditional real estate sales process cropping up recently, competition has led real estate agents to be more competitive with their fees.
While it is always possible to negotiate, remember to consider what’s included in the fee. Some listing agents may be willing to take 2% rather than the traditional 3%, but will ask you to pay out-of-pocket for professional photography and videography, which can cost thousands.
With the many alternatives to the traditional real estate sales process cropping up recently, competition has led real estate agents to be more competitive with their fees.
Both the fees paid to your listing agent and the buyer’s agent should be specifically set out in the listing agreement you sign with your agent.
7. Can you provide references?
Past performance and years of experience are all valuable indicators of an agent’s competence. But you’ll also want to talk with someone who has used their services before to know what it’s really like to work with them.
Perhaps you’re interviewing an agent in the first place because they were recommended by a trusted friend or family member, but you’ll still want to get a variety of opinions from different sources. It’s unlikely that a listing agent will send you to a client who didn’t have a good experience, which is where a little internet sleuthing can come in handy.
When reading through online reviews, however, always keep the source in mind. If you stumble on anything negative three or four pages deep in the search results, it’s always a good idea to give the agent a chance to explain if he or she seems otherwise well-suited to your needs. This can be a great way to see how he or she handles criticism before getting past the point of no return.
8. Can you also help me find a home to buy?
Home sellers are also often home buyers and will need an agent for both transactions. It’s likely that if you ask this question the answer will be an unequivocal, “yes.” After all, why would an agent turn down more business?
Really, this is a question to ask yourself. These are a few pros and cons of using the same agent to represent you during the sale of your home and help you purchase your next one:
- You’ve already found a good agent. You’ve spent a lot of time and energy to find the right agent to sell your home. While you might make a few compromises in using the same agent for two different types of transactions, it may be worth it to stick with someone you trust.
- Timing is everything. Working with the same agent to help you sell and buy means one person who knows your schedule and can best manage any timing issues that may arise between closing on the sale of your home and purchase of the next.
- Financial benefits. As a seller you have a good deal of control over how much commission you pay your agent, but you have very little say over what the buyer’s agent is paid. Using the same agent for each of your transactions may mean even more leverage to negotiate the sell-side fee or ask for a credit toward closing costs from the commission your agent earns on the buy-side.
- Agent expertise might not cover two neighborhoods. Can one agent really be an expert both in the market where you’re selling your home and in the neighborhoods you’re looking to buy? Perhaps. If you’re moving within the same city, it’s possible the agent has knowledge of multiple sub-markets and connections across the region. Unless you’re buying within a close a radius of your current home, using the same agent may mean making a compromise in local market knowledge.
- A lack of transaction specialty. Many of the questions you’ve asked thus far have had to do with the specific challenges faced as a seller. Which side of the transaction does your agent truly specialize in and with which do you need the most help? Many agents who are buyer specialists have connections with mortgage brokers and know the local professionals to connect with.
- A lack of bandwidth. Having two separate agents, one to sell your home and one to help buy a new home, could increase the odds of getting more attention from each by creating a division of labor.
What questions does the agent ask you?
Just like in any job interview, the onus seems to be on the hiring manager to ask the questions, but often it’s the questions asked by the interviewee that gets them the job.
A real estate agent’s chief task is to be your representative when dealing with other parties in the transaction. This simply is not possible if they don’t know your needs, priorities, and expectations. So while these are all important questions to ask when choosing a real estate agent, the most important questions of all will be the ones they ask you.
By Jeffery Marino
This article is meant for informational purposes only and is not intended to be construed as financial, tax, legal, real estate, insurance, or investment advice. Opendoor always encourages you to reach out to an advisor regarding your own situation.