How to Interview a Real Estate Agent

The standard joke is there’s nothing wrong with a new agent that a little experience won’t fix, but that’s not to say that freshly licensed agents aren’t valuable. Much depends on whether they have access to competent mentors and the level of their training. Newer agents tend to have more time to concentrate on you. Some agents with 20 years of experience repeat their first year over and over. Other 20-year agents learn something new every year.

There is no bar exam for real estate agents and no school to attend that teaches agents how to handle problems in a transaction. They learn on the job. The more sales an agent has completed, the more she knows.

Realize that the agent’s average ratio depends on the market. Excluding sizzling seller’s markets, a good buyer’s agent should be able to negotiate a sales price that is lower than list price for buyers. A competent listing agent should hold a track record for negotiating sales prices that are very close to list prices. Therefore, listing agents should have higher ratios closer to 100%. Buyer’s agent ratios should fall below 99%. Sometimes market value has no bearing on the asking price and, in that that event, ratios are meaningless. Don’t put too much emphasis on ratios.

As a buyer, you will need to know:

• How will you search for my new home?
• How many homes will I likely see before I find a home I want to buy?
• Will I be competing against other buyers?
• How do you handle multiple offers?
• Do you present offers yourself?

As a seller, you will need to know:

• Specifically, how will you sell my home?
• Is a direct mail campaign appropriate? Why or why not?
• Where and how often do you advertise?
• What kind of photography do you offer?
• How do you market online?

Everybody has references. Even new agents have references from previous employers.

• Ask to see references.
• Ask if any of the individuals providing references are related to the agent.
• Ask if you can call the references with additional questions.

It is important to note that if an agent has tons of reviews online, you may not need references. Experienced agents can also feel insulted if you ask for references, but a new agent most likely will not.

A good agent won’t hesitate to answer this question and will be ready to fire off why she is best suited for the job. Everyone has their own standards, but most consumers say they are looking for agents who say they are:

• Honest and trustworthy
• Assertive
• Excellent negotiators
• Available by phone or e-mail
• Good communicators
• Friendly
• Analytical
• Able to maintain a good sense of humor under trying circumstances

A sign of a good real estate agent is a professional who makes forms available to you for preview before you are required to sign them. If at all possible, ask for these documents upfront.

As a buyer, ask for copies of the following:

• Buyer’s Broker Agreement (is it exclusive or non-exclusive?)
• Agency Disclosures
• Purchase Agreement
• Buyer Disclosures

As a seller, ask to see:

• Agency Disclosure
• Listing Agreement
• Seller Disclosures

Let the real estate agent explain to you who she works with and why she chooses these professionals. Your agent should be able to supply you with a written list of referring vendors such as mortgage brokers, home inspectors and title companies. Ask for an explanation if you see the term “affiliated” because it could mean that the agent and her broker are receiving compensation from one or all of vendors, and you could be paying a premium for the service.

Don’t ask if the fee is negotiable. All real estate fees are negotiable. Typically, real estate agents charge a percentage, from 1% to 4% to represent one side of a transaction: a seller or a buyer. A listing agent may charge, for example, 3.5% for herself and another 3.5% for the buyer’s agent, for a total of 7%. The adage you get what you pay for tends to hold true in real estate. Top agents may tend to charge more.

If you sign a listing or buying agreement with the agent and later find that you are unhappy with the arrangement, will the agent let you cancel the agreement? Will the agent stand behind her service to you? What is her company’s policy about canceled agreements? Has anybody ever canceled an agreement with her before?

Pay close attention to how the real estate agent answers this question because there is often something else you may need to know. You want an agent to take her time with you — to make sure you feel comfortable and secure with her knowledge and experience. She should know how to listen and how to counsel you, how to ask the right questions to find out what she needs to know to better serve you.