15 Questions to Ask When Hiring a Real Estate Agent

Making Better ChoicesHomebuyers may spend as much money on their real estate agent as on their car, but many will choose their agent in less than an hour. According to a California Association of Realtors report, nearly half of all homebuyers hire the first agent they meet.

This is probably because most of us would rather reject a car than a person. And some people just don’t know what to ask when evaluating an agent. As agents ourselves, we know what we’d ask. Here are our top suggestions.

Our List of Top Questions to ask a Real Estate Agent

  1. Is this your full-time gig? How many clients have you served this year? You want a real estate agent who isn’t going to be distracted by other obligations, and an active agent is more likely to be up to date on the market and the law.
  2. How many sales have you handled in my target neighborhoods? You want someone who knows the local market, with a few recent deals in your target neighborhoods.
  3. When clients are unhappy with your service, what has gone wrong? Asking why a client has been a bad fit for an agent can help you figure out if you’re a good fit.
  4. Has a client ever filed a complaint against you? If you’re uncomfortable asking, just check with the state real estate agent licensing board.
  5. What’s your fee? The seller pays the buyer’s agent using the money you pay for the house, typically 3% of the sales price. Some buyer’s agents refund part of this fee.
  6. What services do you offer beyond negotiations and escrow? Make a list of what you’ll be paying for. Negotiations, paperwork and contingencies are the minimum.
  7. When am I committed to working with you? Many consumers start touring homes without realizing this can obligate them to work with the agent, contract or no contract.
  8. How many foreclosure or short-sale transactions have you handled? Distressed properties can be great deals, but the paperwork is complicated, and your liability is greater. The best agents have experience closing deals with banks.
  9. Who else will be working with me? An agent is often supported by a team. But the person you hire should do most of the work.
  10. Will you show me all the properties for sale? Good agents show all properties, even for-sale-by-owner properties that don’t pay a commission.
  11. How quickly can you get me into a home? Hot homes move fast. Ask how the agent handles tours on short notice.
  12. Do you represent buyers and sellers on the same house? No agent can fairly represent both. You need someone on your side.
  13. What sets you apart from other agents? Look for expertise, not just eagerness. You aren’t hiring the neighborhood kid to rake your leaves.
  14. What if I’m unhappy with your service? Agents get paid when you buy a house. But most customer complaints occur during the closing process. Ask for a guarantee.
  15. Can I get references for your last five deals? Most homebuyers are happy to share their experience with others.

Every agent has clients he served well. But the best agents serve nearly all of their clients well. Getting an agent’s last five clients will give you a more balanced picture of his service than letting him choose his most favorable references. Call at least two of the five, asking clients some of the same questions you asked him. Look closely at these last five deals to see how they compare to similar sales in the neighborhood. Did he negotiate a good price for each customer?

Discussion

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  • http://blog.franklyrealty.com Frank LL0SA- Broker FranklyRealty.com

    Hey Glenn, thanks for your invite to post my reply. But it might end up being longer than your post!

    This is a good list. I didn’t find any Redfin biases, except maybe a tad for #14, but it’s acceptable.

    I’d like to give my few cents and add some questions.

    First of all, I’d split it up for Listings and for Buyers.

    For Listings, add these:
    1) Will you take the maximum photos allowed by the MLS? Will you take it with a super wide angle camera, or hire a professional photographer?

    Subtext: Buyers want photos, and it better be up the FIRST day of the listing when the alerts go out! Yes even for a 1 bedroom, a good agent should take 30 photos. In our area adding 30 photos is free, yet less than 10% of agents do this (ie LAZY). And a bonus if the 1st image is a collage since some sites only carry the 1st photo. Our company policy is 30 Super-Wide Angle photos for each listing. If the answer is “yes” say “show me.” One thing is to promise it after the fact, another is to be doing it as a default. If they can’t do at least that, what else are they going to cut short?
    (Redfin does a great job with this!)

    2) Do you work with stagers that you can recommend?

    Subtext: Staging is the key in this marketplace. Only 1 in 100 homes are staged. Think of it as buyer manipulation. Make them fall in love with the house. That “gut feeling” that they get, that isn’t by accident. Just sold 2 places in 4 days. (blog post soon) and the agent feedback was that it was “overpriced.”

    3) Show me your last 5 deals. Did they all sell? For how much under/over list? Today you recommend that I sell for XYZ, so show me how far off list price were you in those deals?

    Subtext: There is something called “Buying a Listing,” when a listing agent gives you an artificially high price just to get the deal. See: http://tinyurl.com/6njuy9 Our policy is NOT to recommend a list price, but many agents still do.
    Look at their track record. Do NOT pick an agent based on “Well I can get you X.”

    *********************

    On the buying side, ask:

    1) How do you/we come up with pricing?

    Subtext: Do you recommend a price, or do I?
    Some companies (I think Redfin) asks the customer to submit the price and explain why. Will the buyer agent do a background check (Frankly CRA tm) on the Listing Agent to see their last 10 deals, so you can get inside the mind of the listing agent? What % below list did they take last week?

    Do you use a “Vegas Odds” system of showing 4 pricing options and allow the customer to decide how aggressive they want to be (sometimes low starting prices end with a higher contract price)

    2) Will you take a Buyer Agent Photo Album (google it) of each property that we view and post it online privately for me to view later?

    Subtext: This process helps the buyer (and agent) save hours from having to visit the property again and again. I can shoot 100 photos of a place in 7 minutes.

    3) Will you accept inflated buyer agent offerings (bribes)?

    Subtext: Some places will offer a $5k or $10k bonus, or even a trip to Tahiti, to buyer agents. We feel this money is really the buyers, so they get it back at closing. Can’t bribe us. (I believe Redfin keeps bonuses, read the fine print, I could be wrong.)

    #10 is great, add to it: What happens if I find a place on my own? Do I still have to use you?

    Subtext: My answer= Yes, you have to use me. Some agents (weekend warriors) will let you do your own thing, but some will require an Exclusive Buyer Agency Agreement. I don’t have time to compete against my client. We are a team, both looking for the perfect home. But don’t necessarily be scared by these, they can actually HELP the buyers. http://tinyurl.com/28nn8f

    **********
    For both sides I’d ask:

    X) Give me a recent example where you fought for your client to get them another $10,000.

    X) Do you have any affiliated business arrangements that either you or your brokerage get compensation for? If so, exactly how much.

    Subtext: That “great” lender or closing company that they recommend, are they getting $1,000 from it? Watch out for the “I don’t but my broker does.” As their wallet grows with Best Buy gift cards for being a Top Office Referrer.

    X) How do you use technology in your business.
    Do you text? Do you IM? Twitter? Do you offer digital signatures for contracts so we don’t have to waste hours on paperwork and trips to Kinkos? Can you ratify a contract via Text Messaging from the sidelines of a professional soccer match (true story).

    ********
    In response to your 15:

    #14 is a little Redfin specific (since their business model pays their agents based on service), but a valid question.

    #12. Give them some keywords: Dual Agency and Dual Representation, so they can Google it for more info. Also make it a tad more clear:
    Do you act in a Dual Agency capacity where you would be representing us at the same time as you represent a client on the other side?
    Remove the “No Agent can fairly” with “It is our opinion that…” I forbid Dual Agency, but an agent in Horse Country Virginia made for a good reason for it.

    I’d watch out for #2. While you don’t want a Weekend warrior with #1, you also don’t want somebody that does a zillion deals and uses the “throw a bunch of ‘stuff’ against a wall”- technique to see what sticks. Yeah some might stick, bit it is still “stuff.” So make sure they are full time, but I wouldn’t care much about 10 vs 40 deals. You might get better 1 on 1 time and service with a 10 vs working with the assistants on a “40 deal” agent. Quantity vs Quality.

    Also don’t fall for the “Top 5% Producer” garbage. It is really easy to manipulate the numbers. Heck, I was the #1 Agent in the US 30 and Under… in my first year with $75 Million in sales… Oh did I tell you I started off doing $100 listings? I also like to say “I used to rebate, but then I got good.” ;-)

    I really like #7. (small typo though)

    Thanks for the dialogue. When I have a college buddy that lives in another state, and he wants me to find him an agent, these are the types of questions I ask. I also look on ActiveRain since it breaks agent bloggers down by city. Don’t just pick the #1 agent as they might just put up garbage to be ranked first.

    Frank Borges LL0SA
    Broker FranklyRealty.com
    Blog.FranklyRealty.com

  • http://blog.redfin.com/blog/author/glenn%20kelman Glenn Kelman

    Frank, awesome feedback. I like: how do you use technology and especially how do you/we come up with pricing. Thanks for all the great ideas. We’ll do a separate post on questions to ask a listing agent.

  • http://www.raincityguide.com/author/ARDELL ARDELL

    Hi Glenn,

    There was a Yahoo poll done many years ago. To everyone’s surprise the people who were happiest with their choice of agent did not choose by ANY of the obvious questions, as one might think.

    It wasn’t the one with the most experience.

    It wasn’t the one with the one with the most sales in their area of choice.

    It wasn’t even the Top Producer.

    None of the people who chose by those methods were as happy as the #1 method of choosing.

    The #1 answer was the one that they trusted from start to finish to have their back.

    Agents were dumbfounded! You mean all these leads and deals I’m doing isn’t “it”?

    No. In fact those that worked with Top Agents and most deals were not as happy as those who found a “touch feely” agent who they could trust.

    Trust was the #1 answer, and by far.

    So ask the references ONE question…did you trust your agent, do you still trust them now that it’s all said and done, and would you use them again.

    It’s as simple as that.

  • http://www.raincityguide.com/author/ARDELL ARDELL

    Oops. I guess that’s three questions :)

    Did you trust your agent?
    Do you still trust them now that it’s all over?
    Would you use them again?

  • http://blog.redfin.com Chris Glew

    Ardell-
    Thanks for your comments. Your three questions about trusting an agent are great. We’ll definitely work those into #15 in our list.

  • http://blog.redfin.com/blog/author/glenn%20kelman Glenn Kelman

    This is very similar to the Ultimate Question, about whether you would recommend a friend… great advice Ardell, as always. Thanks for the feedback.

  • http://www.raincityguide.com/author/ARDELL ARDELL

    Chris,

    #15 sucks. I would NEVER give people my clients phone numbers to call, so that I could get more business. I would not “use” them in that manner, nor do I respect any agent who does.

    I turned a customer away last year sometime who had a big list of 15 Questions…one of which was a list of all my sales and the phone numbers of my clients. I never even met with those people. Why would I give a complete stranger my valued clients’ phone numbers? Most of those numbers are private numbers and cell phone numbers.

    I told them if you find an agent who will hand you all of their client’s phone numbers…RUN!!! They obviously don’t understand the meaning of “fiduciary”.

  • http://www.raincityguide.com/author/ARDELL ARDELL

    “This is very similar to the Ultimate Question, about whether you would recommend a friend”

    Not really Glenn. Asking someone if they would use the agent again, is not the same as whether they would recommend them to a friend. Most people don’t want to be responsible for their friends’s success or failure in a real estate transaction. Nor do they want to be blamed if the friend is unhappy.

    That’s why blogging is so valuable to the public. Friends can refer Friends to their agent’s blog. Then the friend makes his own choice after having read the blog.

    Many of my clients come to me this way. “Someone at work told me to read your blog.” vs. “Ganesh told me to call you.”

  • http://blog.redfin.com Chris Glew

    Ardell-
    It’s understandable you don’t want to give a list of all your past customers. But if you’re unwilling to provide references, how’s a home-buyer to know they can trust you?

  • http://straighttalkaboutmortgages.blogspot.com Tom Vanderwell

    Hey Chris,

    I like your list. Any chance I could repost it as a “guest post” on my blog some time?

    Check out http://www.straighttalkaboutmortgages.blogspot.com and let me know what you think.

    Thanks!

    Tom Vanderwell

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  • Hank

    Personally I don’t respond well to potential clients with 15 or more questions regarding my qualifications, so right of the bat I’m a poor fit for your hypothetical client.
    It is important to remember that we don’t choose our customers but we can and should, choose our clients.
    I will however suggest another single question, that will often be very informative when answered; why do you sell real estate? There isn’t a correct answer, but I have heard a lot of wrong ones.

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  • http://latisse.momaroo.com latisse

    +1

  • Van

    Guys,
    Are you really Real Estate Professionals?
    Those questions are stupid and only idiot can ask them)))
    You are not serious, right?

  • Van

    +1 000 000, please do not smoke any more ))) LOL

  • http://www.saltlakecityrealtor.org/ real estate agent

    These are such nice and useful ways to search for. I will try to follow this as I know that this information will be very useful for me. I like that you have shared this with us.
    ________________________________________
    Salt Lake City Realtor: Anya Ouchakova
    14403 South Lapis Dr. Draper Utah 84020
    801-252-6947

  • http://www.metroareahomesllc.com/ Virginia Short Sale

    Real estate has really become a tricky business these days. It is refreshing to have found someone who knows what they are talking about. I highly recommend this site. Real Estate Investor and Note Specialist.

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