Finding a real estate agent that will help you sell your property quickly should never be a rushed exercise. Even if home sellers can be overwhelmed by the amount of professionals of the housing industry, this also means that among an almost endless sea of fish, there’s bound to be one that is exactly right for you.
As with any important relationship, you shouldn’t take these sages of sales and rentals on face value, because (as anyone who has been catfished will tell you) what you see online is not always an accurate depiction of a person and the qualities that they bring to the table.
This makes the interviewing process an especially important step when embarking on the journey of selling your house.
The amount of agents you interview is up to you (although online real estate agent finders often recommend interviewing at least three, with some experts recommending that you interview no less than two, but no more than three candidates) but when it comes time to sit down and decide who’s your best match, these are the questions you should ask.
1. An alternative to “How long have you been an agent?”
Should you Google “questions to ask real estate agent”, this one will almost certainly be at the top of the list, and for good reason. Experience counts for a lot in the real estate industry. It means that a real estate agent probably knows the legislation relating to real estate of the state they work in like the back of their hand, because they’ve had to work with it so much. It means that they know what they’re talking about when they refer to comparable properties. It means that they understand the local housing market. And it means that they’ve probably sold their fair share of houses… right?
Not necessarily, which is why this question should probably be restructured to rather ask “how many real estate transactions have you been party to in the last two years?”
While experience does set sellers’ hearts at ease about trusting an agent to assist them with a transaction of this financial magnitude, it by no means guarantees that you’ll be working with an agent that can help you sell at the best price in the quickest time. By asking an agent how many properties they’ve been involved in buying or selling over a certain period of time – two years is a good rule of thumb, because it means that they’re not completely new to the real estate industry – you’re establishing what their productivity is like.
On face value, an older agent who has been in the business longer than a twenty-something-year-old agent who has only been a real estate agent for a couple of years is the obvious choice. However, establishing the amount of real estate transactions they’ve been party two in the past two years may paint an entirely different picture.
The younger, newbie real estate agent might have been involved in 30 real estate deals for that period, while the older, more experienced agent might have sold that amount of houses over the course of his or her career. Who would you prefer to assist you when selling your own home in this case?
As this question also refers to overall transactional volume, and not just to how many houses they’ve sold, this gives you a chance to find an agent with a broad skillset, as opposed to one who specialises in just one aspect of real estate. Even if you’re looking for someone that knows how to sell, this is better for you because you’ll be able to find someone who is truly a master of the real estate industry in general. Diverse experience also means that an agent probably has access to a larger network of people and resources than agents that specialise in just one type of real estate transaction do.
By asking this question instead of the tired “how long have you been in the business?” that they’ve become accustomed to, you are also establishing yourself as a serious client who values the service that real estate agents provide. It shows that you take results seriously and won’t get too emotional when selling your home – it remains a transaction, after all. It shows that you value productivity and results and will expect your real estate agent to deliver.
Take into account that real estate agents who work with luxury real estate do typically sell less than agents who work in the mid-range housing market (if you are not selling a luxury property, though, you might be better off looking for someone who understands your particular market a little better).
With that being said, having sold two properties over the past two years simply won’t cut it. Even if there is no right answer, you’ll want to keep an eye on the way potential real estate agents answer this question. If they struggle to answer, or if their answer is vague, you might want to follow up with the real estate agency that they’re employed by and verify what they said. In fact, it is always advisable to check their answer with the real estate agency they work for.
2. Are you qualified and licensed, and in which states?
Applying for a real estate agent’s license is a long process, with quite a few prerequisites to ensure that the real estate agent has the necessary experience in the real estate industry to start off with.
In Victoria, for example, there are both academic and experience requirements that a candidate needs to meet to be eligible to apply for a real estate agent’s license. This includes the aggregate of at least 12 months full-time experience as an agent’s representative in the state at any time in the three years prior to applying for a license. In addition, candidates should have completed one of eight academic qualifications in real estate (if they haven’t, they are required to complete the Certificate IV in Property Services) no longer than five years prior to an application for a real estate agent’s license.
Victoria’s consumer regulator makes it clear that unlicensed real estate agents are liable for significant fines. If practicing as a real estate agent while not holding a license to do so makes a person liable to fines, it should also make home sellers wary of using agents who cannot provide proof of their license.
When interviewing potential real estate agents to help you sell your property, ask them to bring documents verifying their accreditation along to the interview. Scrutinise these documents and make notes to follow up and check their accreditation online – the option to check whether a real estate agent is licensed is available to residents in New South Wales, Victoria, South Australia, Western Australia, Tasmania, the Northern Territory and Queensland, and there is really no good reason for skipping this crucial step in determining whether an agent is professionally qualified to help you sell.
Should an agent not have the necessary real estate qualifications and licenses, you must immediately disregard this agent as a potential candidate to help you sell. Using an agent that is not licensed to do business in the state where you are selling your property puts you at significant risk. Unlicensed agents are not up to date with the latest regulations set out by the real estate institutes of the different states, and using an gent that is not licensed to do business puts the seller at significant legal risk, should something go wrong with the sale.
Think of it this way: if you decide to sell your property with the help of a real estate agent, using an agent that is not qualified and licensed is, in essence, just as good as selling your property yourself. You are paying for a service that is provided by a professional who belongs to an accredited regulatory body that keeps them accountable for the transactions they are party to. Using an agent that is not qualified, licensed and held accountable for their actions is simply too big a risk to take, considering the large amount of money involved in selling a property. If an agent lies about their accreditation, it means that they are not trustworthy, and are, essentially, committing fraud.
Online real estate finders like Perfect Agent do conduct thorough due diligence on all the agents they recommend, but it will set your mind at ease to double check a real estate agent’s license online.
In addition to being licensed to work in the state, many real estate agents also belong to professional real estate associations, of which the membership requires that agents adhere to certain guidelines and ethical standards. These associations hold their members to account, and provide them with the opportunity to further their technical knowledge of the property industry. Members also often have access to members-only property databases. Belonging to a professional real estate association should give a candidate more credibility – ask about this when you interview potential real estate agents.
3. What is the average list-price-to-sales-price ratio of the properties you sold in the past 6 months?
This question might sound like gobbledygook because of the technical jargon, so let’s quickly look at the term “list-price-to-sales-price ratio”.
A list-price-to-sales-price ratio is calculated by dividing the eventual selling price of a home by its asking price, and then multiplying that number by 100 to get a percentage.
For example, let’s say a house was listed for $300,000 by the seller, but was ultimately sold for $289,000. The calculation of the list-price-to-sales-price ratio will look like this: 289,000 / 300,000 = 0.963 x 100 = 96.3%. This means that the list-price-to-sales-price ratio on the property in question is 96.3%.
Determining the list-price-to-sales-price ratio gives you a lot of information to work with.
- It tells you what the property market is like: In a buyer’s market, the list-price-to-sales-price ratio will typically be lower than 100%, because homebuyers want to negotiate the lowest possible price on the property they are looking to acquire. In a seller’s market, the list-price-to-sales-price ratio will typically be between 100% and 110% of the asking price.
- It tells you about the agent’s negotiating abilities: How far the ratio drifts from 100%, and in which direction it deviates, gives home sellers a good idea of what a real estate agent’s negotiating abilities are like, as well as giving an indication of their marketing abilities and their network and database of potential buyers.
- It tells you about an agent’s motivation to sell at the best price: If an agent’s average price-to-sales-price ratio is consistently between 100% and 110%, that gives you a good idea of how hard they will work to get the best possible price for your property.
Of course, the current housing market in your state and in the country will have an effect on an agent’s average price-to-sales-price ratio for a specific period of time. Do your research about the market conditions preceding the time when you want to sell your property, as these will have a definite impact on the price your house will ultimately fetch.
In addition, an agent’s average price-to-sales-price ratio will give you an idea of how their recommendation of the price of a property compares to what the property ultimately sells for. Being able to recommend an accurate selling price is part and parcel of a real estate agent’s duties, and good real estate agents know how to price a home so it collates with comparable properties in your suburb or city, without being too low (which means that there will probably be a quicker sale, but you won’t make as much on the sale as you potentially could) or too high (which means that your house will be on the market for longer, and that potential buyers will be disinterested because they know the asking price is too high right off the bat).
4. What are your personal strengths as a real estate agent?
If everyone were cut out to be real estate agents, there wouldn’t be a need for this profession to start off with. As with any sales and marketing position, good real estate agents will possess a certain skillset and characteristics that are required to do their job well.
It is important to gauge a potential real estate agent’s personal strengths to determine whether what the real estate agent answers correlates with the characteristics of an efficient sales person.
The following personality traits should set your mind at ease:
Even if it doesn’t count for everything (because not all real estate agents that have been doing business for 30 years have been consistently good real estate agents for that amount of time) experience does set an agent apart from someone who is just starting out. In fact, a Journal of Real Estate Research study found that experience was one of the most important contributing factors to the top performers in said study. Seasoned real estate agents have done all of this before, and can anticipate challenges and problems even before they arise. Real estate agents who are experienced also usually have access to a larger network of potential buyers than their counterparts who are just finding their feet in the real estate industry.
- A knack for and love of competition
The real estate industry is one of the most competitive industries in the world. In a game with many players, you want an agent who does not shy away from competition or backs down when they are faced with obstacles.
- An extroverted and outgoing personality
If you’re primarily working and negotiating with people, being shy and wary of speaking your mind simply won’t make for good business. You’ll immediately be able to tell whether an agent fits this profile when interviewing them.
- Attention to detail
A detail-oriented approach to selling will mean that you are dealing with an agent that is thorough, even (and especially) with the large amount of admin associated with transferring a property from one person to another. You are looking for someone who pays attention when you specify your needs, and clearly communicates these to potential buyers, and will not bungle the paperwork when a sale is being finalised.
- A proactive approach
Good real estate agents do not sit around waiting for the phone to ring. They schedule meetings with potential buyers as soon as possible, and constantly follow up on leads. If more people view your property, there is a bigger chance of selling quickly and at the highest possible price. In a study conducted by the American Psychological Association, proactivity made up a significant percentage of the difference between the top real estate performers, and those at the bottom.
Arguably the most important characteristic that a good real estate agent should possess is integrity. Winning the trust of potential buyers is imperative to selling a home, and potential buyers immediately pick up when a real estate agent seems to be in it just for the commission. Building a reputation of integrity necessitates that an agent constantly makes it clear that they have the best interests of the seller at heart. If this characteristic doesn’t shine through right from the start, steer clear.
5. What are your fees?
After getting a feel for how a real estate agent conducts his or her business, you have to enquire about their service fees. Remember, real estate agents provide a valuable service to their clients, and the commission they charge will be their remuneration for this service. Knowing what commission an agent charges for their services is very important, because even though the amount of commission can be negotiable, home sellers cannot opt out of paying it altogether.
Commission will be charged according to one of two commission structures: fixed or tiered. Find out what percentage of commission a real estate agent charges for their services (in the case of fixed commission – commission structures vary widely from state to state, suburb to suburb and sometimes even from agency to agency, so you shouldn’t just accept that one agent’s percentage will be the same as another’s), or according to what sliding scale commission will be charged (in the case of a tiered commission structure).
Also, remember to enquire whether there will be any additional costs associated with using a specific real estate agency, as some agencies do charge additional marketing fees.
As has been mentioned already, commission can be negotiated with a real estate agent. If you feel particularly drawn to a specific agent, but their fees are a little high for your budget, ask them about an alternative amount. With that being said, do not sell an agent short. Good real estate agents are sought after because they provide a service that benefits their client just as much as it benefits them.
The interviewing process is an integral part of choosing a real estate agent that you can trust. When interviewing potential candidates to help you sell your property, you’ll want to know how long they’ve been in the business, as well as what their track record is in terms of sales and in terms of their list-price-to-sales-price ratio. Knowing this will make it clear whether a real estate agent has the skills that are necessary to sell your home at the best possible price within a timeframe that is fair.
And while their technical abilities as salespeople are important, real estate agents are also going to be the people you deal with throughout the sometimes tedious process of selling your home, which makes their personality and character traits just as important as their ability to sell.
Perhaps most importantly of all, home sellers absolutely need to verify the qualifications and licenses of potential candidates after asking them about these during the interview process. An unlicensed agent is not just doing business illegally, but is also guilty of fraud if they have lied to clients about their training. Verifying their accreditation is as easy as checking it online. If an agent belongs to a professional body in the real estate industry, this should set the minds of home sellers at ease, because this means that they are always being held accountable for the business they conduct within the real estate industry.
The real estate agents that Perfect Agent recommends are qualified, licensed and trustworthy, with a proven track record of sales. Contact us today to get your list of recommended agents, chosen according to your specific needs and requirements.