Questions to Ask Real Estate Agents When Buying a Home
With so much information available online, it’s easy to question the need of a real estate agent early on in the home buying process. After all, some buy and sell homes successfully without representation but the vast majority don’t. Why? Real estate agents are invaluable due to their experience, housing market knowledge, objective negotiation skills, and network of resources. They are also great time savers!
Each state establishes laws on the education, certification and exam requirements for real estate agents. State real estate licensing requirements can vary greatly in difficulty so be wary. In most states, your high school diploma or GED are the minimum educational requirements to start the real estate licensure process.
Getting a mortgage and buying a home will probably be the largest financial transaction that you’ll make. For that reason real estate agents have a fiduciary duty to the client meaning they must perform their duties in the best interest of their client, which is you. But aside from the legal element, you also want reassurance that the real estate broker helping you buy a home is working toward your goals, timeline, and expectations. Not theirs.
A significant part of being selective is knowing what to ask potential agents. Use the questions below when interviewing real estate agents and you’ll surely find the best buyer’s agent available.
How long have you been in the real estate business?
Ideally, an experience real estate agent with year of experience is preferable but new agents are not necessarily disadvantageous. It really boils down to their access to capable mentors, how much training or market experience he or she has, and ultimately how wide their customer and agent contact list is. Typically, newer agents have less clients and more time to focus on you than seasoned veterans so keep this in mind.
What neighborhood areas and type of properties do you handle?
One of the main reasons home buyers rely on real estate agents is due to their knowledge of certain housing markets. If the agent in question is not familiar with your particular market of interest then your list of potential agents just got shorter. If they claim to have market experience then come prepared with some more specific follow up questions to gauge their expertise.
Can you provide a list of home buying business resources?
Any real estate agent worth their salt will have a network of professional resources to keep the transaction process as smooth as possible for home buyers. Your agent should be able to provide a list of referring vendors that range from mortgage lenders to title companies. They should also explain if certain vendors are compensating them or their mortgage lenders for referrals because this could mean that you’re unknowingly paying premiums for their services which goes against RESPA laws.
Can I review all buyer documents in advance?
Another good sign is a real estate agent who makes agreement and disclosure forms available to you for preview with ample time to closely examine documents before signing them. If possible, ask for the following documents upfront:
What separates you from other agents?
Before asking what separates them from their competition, keep the key things you’re looking for in mind. A good real estate agent will immediately have several answers to this question. Whether it’s candid honesty or topnotch negotiating skills, make sure they can bring what you want to the table.
Do you have any references or past clients I can talk to?
Both new and veteran agents should have at least two to three professional references ready to go or maybe even online reviews. Ask if they mind you reaching out to their references as well. Experienced real estate agents may feel insulted if you ask for references, especially if you were referred to them, so online reviews could be a better option. At the end of the day, you still need to feel comfortable with who you’ll be working with. If you free referrals are necessary, then ask.
The general public can’t look up a particular real estate agent’s production, but buyers can look up an agent’s license information and status with a simple Google search. In addition, sites like Zillow, list registered agents and provide online ratings based off customer reviews.
How much are your real estate fees?
All real estate fees are negotiable. Both the buyers’ and sellers’ agents usually charge a percentage from 1% to 4% for one sided representation during a transaction from the seller. The home buyer could be contractually obligated to split agent fees by the seller. Expect seasoned agents to charge more so newer agents could be more appealing. Furthermore, the commission structure is not typically affected when working with foreclosures, short-sales, bank-owned, etc.
What’s your company’s cancellation policy?
What if during the transaction process you realized the real estate agent you’ve been working with isn’t right for you after all. If you signed a listing or buying agreement will the agent let you off the hook? What’s their company’s policy on canceled agreements? Are there penalties? All great questions to ask because they vary among agencies.
Go with your gut!
Maybe you found all the agent’s answers satisfactory but you have a bad feeling. Either their personality rubbed you the wrong way or the agent didn’t seem to provide their full attention. Sometimes, it’s better to go with your intuition. Buying a home is one of the biggest financial decisions you’ll make so choosing the right real estate agent for you merits scrutiny.