10 Interview questions to ask before hiring a real estate agent

During the home-selling and home-buying process, you will collaborate with and speak with your real estate agent more than any other party. This person will be your right hand, support system and expert throughout the home selling and home buying process.

Find an agent that fits your needs and they will work for you, the seller, to find the right buyer for your home, as well as find the ideal home in the proper price range for the buyer. I want to help you understand the real estate agent’s purpose in the selling and buying process and what questions to ask your potential real estate agent.

The real estate agent represents the owners listing the property. The real estate agent works on a commission basis and this cost is normally paid by the seller of the property. The agent will only be paid when the property is registered at the Deeds office.

The selling agent should provide the highest quality customer service, as many real estate agents depend upon referrals from buyers and sellers for future profit. Remember that having the right real estate agent is an investment into the future home and financial wealth of the investor, by choosing the right home.

So how does a seller or buyer choose the best agent for the situation? Knowing which questions to ask a real estate agent during your first meeting to sell your home is crucial.

Why?

Because the right real estate agent can not only sell your home faster and make you more money, but they can also make the selling process less stressful. Choose the wrong person and the complete opposite can be true.

But how do you know if you are hiring the right real estate agent? You need to ask the right questions. And here’s the secret…. It’s not about knowing the right questions to ask, but about getting the right answers.

Most homeowners ask a few generic questions and make sure they have a “good feeling” about them. While having a good feeling about the agent you are selling with is important, the questions you ask and the answers you get are more important. Don’t risk hiring the wrong person because you didn’t ask the right questions. And don’t skip the interview process because you know them or think you can trust them.

Herewith the best 10 questions to ask any real estate agent when selling a property.

#1 How did you arrive at your suggested price?

Notice the question isn’t “What do you think my asking price should be?” Every real estate agent will tell you what they think you should list your home for, but the “how” is more important. Setting the right asking price is key to maximizing your offer price and selling quickly. Your home is worth what someone is willing to pay for it, but the listing price sets the initial tone. Set the price to high and you will discourage motivated buyers and price to low, you could be leaving money on the table. You want to ask your agent this question before hiring them to ensure two things: They have knowledge to justify this price when negotiating and that they are not suggesting an inflated price to secure your business. The answer you get needs to be backed by data.

During your meeting, the agent should present you with a Comparative Market Analysis (CMA). This is an analysis your potential real estate agent will put together that compares your property with the best recently sold homes. Estate agents who cannot justify their suggested price will usually keep their analysis very vague. They might show you a few recently sold homes, but they won’t back up their reasoning with how they arrived at the price. What you want to see is a breakdown of how your house compares to each recently sold home.

The real estate analysis is what you’ll see on an appraisal report. It includes value adjustments for the key differences that can impact your potential selling price.

The ones that have the biggest impact are:

• Square footage
• Condition
• Bedrooms
• erf size
• Schools
• Proximity to road noise
• Bathrooms

You want the answer from the real estate agent you are interviewing to include the same data. It will immediately give you a glimpse into how savvy the real estate agent is before hiring them. This is important because if their answer is vague and doesn’t include data like this, they are likely inexperienced or they are intentionally inflating their price to secure your business. I would consider this a red flag. If their answer and analysis do include real estate data that justifies their price, then you know they will make the same argument when negotiating for you. But be careful…

If the real estate agent to whom you are asking this question sells a lot of homes, they have the experience to use data like this to convince you that they can somehow magically sell your home for a price that is too good to be true. This is an extremely common tactic that can cause your house to sit on the market and end up selling for a much lower price than it should.

One of the upcoming questions will help you almost completely eliminate this from happening to you.

#2: How will you market my home?

Marketing is key. It is what can drive higher demand. Higher demand means more home-buyers. More buyers can mean a higher selling price in a shorter amount of time. Buying a home is an emotional decision and the best real estate agents incorporate emotion into their marketing plan. When you ask a real estate agent how they’re going to market your home, most will discuss these items:

• Listing on their own websites; property24 and private property.
• Staging
• Property description
• List price
• Photos/Video
• Advertising (flyers, brochures, ads, networking, etc)

Hearing about these is great. You need to know how they’re going to get the word out. But you want to dive a bit deeper and hear about their specific approach.

What are the selling features of my home?

Every home has selling features. It does not matter if the home is in great condition or a fixer-upper. Or if the schools are the best. A real estate agent who knows how to get top price will find positive selling points and will use them when marketing.

For example, the two selling features for a home in need of work could be the following:

1. Lower price, which means lower monthly payments and lower property taxes.
2. The opportunity for the buyer to add their “own artistic touch”.

A good real estate agent will do their homework before meeting with you and should be able to tell you the features they would use as selling points.

Who do you think the buyer for my home will be?

This is a great marketing question to ask a real estate agent. The type of buyer for any given home can be different depending on the area, property type, price range, selling features, etc.

For example, a buyer for a dual living property in Tara, Durbvanville is probably going to be different than a buyer for a single-family residence in Vredekloof, Cape Town. A buyer for a home listed in a retirement community is going to be different than a home for sale in Sonstraal Heights. The answer you’re looking for is something specific. Of course, your buyer can be anyone, but every home will appeal to a larger demographic more than others. A generic answer most likely means the agent does not know who they are selling to. This does not mean you won’t get a great offer, but it does mean their marketing plan won’t maximize the opportunity.

How do you plan on marketing to those home-buyers?

When your real estate agent knows what the selling features are and who the buyer for your home might be, it is almost certain they are going to have a plan on how to market to those buyers. The best selling agents excel at this. The approach used to target a younger audience will be different than an approach used to target an older audience. An approach used to market a home that needs work will be different than an approach used to market a home in great condition. Any real estate agent can put your home on Property24. The best ones will have a plan and use the right marketing strategy.

#3: How will you qualify the buyer?

Want to reduce your chances of having your offer fall through? Then you need a good real estate agent who knows how to qualify the buyer. This is the number one reason why you will see a home go back on the market after it was pending.

There are usually two reasons why this happens:

1. The buyer wasn’t able to get financing.
2. The buyer backs out during their inspection contingency period.

You want the answer from the real estate agent you are interviewing to include how they are going to make sure the buyer is qualified. But you also want to hear about their approach to minimizing the chances of a buyer backing out during their contingency period. Sometimes there is nothing you or your real estate agent can do to prevent this.

But there are two things that can help:

1. Have inspections completed before selling.
2. Make sure the buyer is aware of what is in the inspection reports,

After receiving the offer (or sometimes before), your real estate agent should simply ask the buyer if they have thoroughly gone through all of the inspections. By doing this, it will be very difficult for the buyer to back out of the sale due to something they were already aware of. When you sell with a real estate agent who knows how to qualify the buyer, your chances of a successful sale will dramatically increase.

#4: What do I need to do to get my home ready?

The appearance of your home will have an effect on how fast you sell and for how much. A common mistake that many sellers make is spending too much time and money on things that do not matter. The goal is to spend the least amount and only on things that will bring a return on your investment. And that is exactly what the answer should be about when you ask your real estate agent this question. This will tell you how experienced and savvy the real estate agent is. The best ones know exactly what should be done to make your home more appealing to buyers. And if you plan on living in the home while it is for sale, ask the real estate agent what items inside your home can stay and which ones should go. The best real estate agents can walk around your home and immediately provide you with a list of what you need to do to get your home ready to sell.

#5: What are the costs?

You probably want to know how much you’re going to walk away with. The equation to figure this out is simple: (Selling price – anything owed on the property – closing costs = your net proceeds

A part of the closing costs is going to be the commission. There are other closing costs too, such as certificates of compliance, rates & taxes, bond cancellation fees (if you have a bond), and attorney fees. Depending on your area and price point, the total commission is generally in the 5-6% range.

Asking the real estate agent about the costs during your first meeting will allow you to compare their services and fees to those of other real estate agents you might interview. And commissions are negotiable.

But you need to be careful. Some real estate agents who charge a lower fee are the ones who won’t go up to bat for you. So ask the real estate agent this follow-up question.

Will you lower your commission?

This question is putting your potential real estate agent to the test. How? Negotiating. You want to see how the real estate agent responds. The ideal response is an immediate reply explaining why that real estate agent is worth the commission. You want to hear them “put up a fight.” The response you do not want to hear is an immediate “yes”, or a very weak reply. I’d consider this a red flag. Why? Because if that real estate agent cannot defend their financial interest, they won’t know how to defend yours. And this can easily cost you tens of thousands of Rands.

#6: Have you sold homes in my area?

This is not as important of a question to ask your real estate agent as it used to be, but there is a reason why I included it. Twenty years ago this question was much more important than it is today.

Why? The Internet. Today, many buyers search online and are able to find out everything they need to about a neighborhood.

When I say everything, I mean everything…

• Schools
• Shopping
• Proximity to freeways
• Crime
• Recent sales

But there are some things about a neighborhood that buyers won’t be able to find online. This is why you want a real estate agent who has some experience selling properties somewhat close to yours. They will know the selling points of your area, which can help potential buyers justify a higher offer price. But if they do not have experience selling in your area, you should not cross them off your list. Most sellers ask this question when interviewing real estate agents because they think it’s a necessity. It’s not. If the realtor answers this question with “no”, then you want to hear an answer that includes how they plan on getting the information about your neighborhood that they will need.

A savvy real estate agent can do their homework and get all the information they will need. Plus, you will be able to tell them what you think the selling points about your area are.

#7: Can I cancel the listing agreement?

This is the most important question to ask a real estate agent. The answer you get will 100% tell you about the real estate agent’s integrity. Let me tell you why… When you decide which real estate agent you are going to sell with, you will sign an agreement with them. This is exclusive to you and your real estate agent. The length of this agreement is usually 6+ months. This means that you cannot fire your real estate agent and hire another one during this time. This also means that as long as your house sells, your real estate agent gets paid, whether you’re pleased with their services or not. Because of this, many real estate agents will over-promise during your first meeting with them. They will do and say whatever they have to so that you are locked into an agreement with them. The most common one? Telling you they can sell your house for an unrealistic price. This is especially common among “top” real estate agents. Many of them base their entire business model on this and have been doing so for years. They market themselves as a “top selling agent” or “neighborhood expert” and suggest an inflated price to get the seller to sign the agreement. Here is the thought process for the real estate agents who do this.

Their plan is to:

• Get you excited about a higher price
• Sign the listing agreement with you
• Let the home sit on the market (they know this will happen)
• Tell you to reduce the price
• Sell the home at a lower price, but they still get an agent commission

When this happens, the listing becomes “stale” and buyers start to wonder what’s wrong with the property. The final selling price is usually much lower than it should have been if the home had been priced right from the start. Want to reduce the chances of this happening to you? Then the real estate agent’s answer to this question should be “yes.” Without any hesitation. There is absolutely zero reason why you should be locked into a contract. And you need to get it in writing. You might hear something that sounds convincing about how they can not do that. It’s simply not true. The listing agreement does not include this language but the real estate agent can easily add it. Even though you may not cancel the agreement, having the option to do so will no longer “guarantee” their commission check. Which means their trustworthiness will skyrocket. This also means that you will be selling with someone who will be doing everything they can to sell your house fast and for top price. Do not skip this question. It’s extremely important to the sale of your home. How important?

If they don’t give you an immediate “yes,” then you shouldn’t hire them.

#8: What’s your sale to list price ratio?

Any real estate agent can show you how much they have sold homes for, but you want to see what the original listing price of those homes were. This number is calculated by taking the selling price of all of the homes a real estate agent has sold and then dividing them by the listing prices of those homes. For example, if a real estate agent has an average selling price of R1,000,000 and an average asking price of R950,000, then their sale to list price ratio would be 105%. You can take this number and compare it to other real estate agents you might interview. Be leery of listing agents with a number that is much higher or lower than others. A ratio that is on the higher end means that the real estate agent under prices the homes they sell. They do this so that they can market the home they just sold to other homeowners with something like, “Just sold for RRR over the asking price!”

Usually, the listing agents who do this have a sale-to-list price ratio of 110% or higher. Ones with a ratio on the lower end overprice the homes they sell. Either because of a lack of experience or because they intentionally over-promise on their suggested listing price. Anything under 95% can be a red flag.

#9: What’s your average days on market?

The average days on market is the number of days from when your home is first listed on the websites to when you accept an offer (not when the sale is closed). This can give you a rough idea of how long your home might take to sell (although there are many other factors that can impact this).

Similar to the sale to list price ratio, this is another number you can compare to other real estate agents. A higher-than-average number of days to sell means that the realtor overprices their listings.

And a lower-than-average number almost always means they under price the homes they sell.

#10: How often will we communicate?

You are about to embark on a journey. You do not just want to know who will be your main point of contact, you want to know how often you will be communicating. Not all transactions are smooth sailing. Sometimes there are bumps in the road. You want a real estate agent who has no problem discussing the good, the bad, and the ugly. It is important they commit to how often they will be in touch, no matter how good or bad it’s going.

 Let’s recap…

Questions to ask a real estate agent.

1. How did you arrive at your suggested list price?
2. How will you market my home?
3. How will you qualify the buyer?
4. What do I need to do to get my home ready?
5. What are the costs?
6. Have you sold homes in my area?
7. Can I cancel the listing agreement?
8. What’s your sale to list price ratio?
9. What’s your average days on market?
10. How often will we communicate?

Your first meeting with a real estate agent to sell your house is crucial. It is your opportunity to make sure you are hiring someone who will treat your sale as if it is their own. This is the person you are going to need. There are many steps when selling a home, and your real estate agent can literally be the difference between selling fast and for top price and having your house languish on the market and selling below market value. Ask these questions when interviewing real estate agents and you will put yourself in the absolute best position to ensure you are choosing the right real estate agent to sell your home.

Remember, it is not just about knowing which questions to ask.

It’s about getting the right answers.