How to interview a realtor when buying a home
We know that buying a new home takes time. It probably took years of planning before you finally decide that this is the right time!
Here’s the thing if it’s your first time to buy a house – you will have a lot of questions on your mind. Do I already have enough money? What should I do first? Is there someone I can talk to who will answer all my questions?
A real estate agent, more specifically, a buyers agent is the perfect person who can answer all your inquiries about buying a house. But, prior to hiring an agent to represent you, you have to find several candidates and find the one with whom you are most compatible with.
This brings most potential home buyers to ask another question – Do I need to interview a real estate agent?
And the answer to the last question is a resounding YES! To find the agent with the right attitude and expertise to meet your needs, you need to conduct an interview. Use this opportunity to ask relevant questions.
Agent interviews usually take place in an office or over the phone. Here are a few guide questions that could help you if you have no idea how to interview a realtor when buying a home.
Pro Tip: If you are thinking about working with a relative or friend, make sure you interview them too and hold them to the same standards as the other agents because that friend or family member may not be the best agent for you. You can see more on this topic here
1. How much is your fee and do I need to sign a contract?
When it comes to the fees, you, as the buyer, should understand not only how to interview a realtor when buying a home but also:
a. Who is going to pay for your realtor’s fees and what are those fees? read more below
b. Am I going to receive part of your agent’s commission back at closing? read more below
c. What contracts do you need to sign and what do they mean? read more below
a. Who is going to pay for your realtor’s fees and what are those fees?
Almost always sellers pay the totality of the real estate commission. This happens at the end of the process, on the closing day or the day when property ownership transfer from the seller to the buyer.
The real estate commission is usually 6% of the total purchase price. The seller’s agent gets half of this and the buyer’s agent receives the other half. And sellers typically pay the commission but some agents want you to pay fees upfront, so you should clarify this point.
b. Are you going to receive part of your agent’s commission back at closing?
Most agents are solely paid by commission. But more and more often, agents are offering to give home buyers part of their commission. This is called a commission rebate or refund and it can help you save money on your home purchase, which is really great. You can find other ways to save money on your home purchase following this link.
This practice is totally legal in 40 states and you don’t want to miss out on this offer! It could save your many thousands of dollars that you can use to pay your furniture, contractors, etc.
Don’t be embarrassed to ask if your agent gives commission rebates. Some professionals tell you outright that they offer a rebate program. Even if your agent doesn’t advertise about it, it never hurts to negotiate a commission rebate.
Contact us to get a list of the agents in your area that can offer you a commission refund.
c. What contracts do you need to sign and what do they mean?
Most first time home buyers are not aware that there are contracts between buyers and buyers agents.
Most agents request home buyers to sign a buyer’s agency agreement. Also known as buyer representation agreements, prospective buyers sign this contract to authorize a licensed brokerage firm, and usually a specific real estate agent at that firm, to represent the buyer. This agreement also:
- informs you of the agent’s duties and responsibilities and
- confirms the buyer’s commitment to the agent
- assures the agent that he or she will be compensated if a sale occurs
The terms of this agreement are completely negotiable. Ask the agent to go through the agreement with you so you can ask questions before signing the contract.
2. How long have you been in the real estate business?
Length of experience counts a lot when it comes to hiring an agent. The longer you have been working as an agent, the more proficient you become in the process. This is also true for buyers agents.
Agents who closed more transactions while helping clients buy properties will be better equipped to handle different scenarios. And this will be beneficial for you. You can start the conversation casually by asking the agent how long he or she has been in this line of work. You may also ask how many homes the agent has sold in the previous year.
When interviewing a realtor, ask if real estate work is his or her full-time or part-time job. The whole process of buying a home can be time-consuming. If you and your agent are both busy with work, family and other things, it may be difficult to find a schedule that is convenient for both parties.
If your buyer’s agent is a part-timer, it may be harder for your agent to dedicate time to you. He or she may not have the necessary availability to accompany you to meetings or open houses because of another job.
Word of caution: Do not interview two agents from the same real estate brokerage because they work for the same company. It is best to try and talk to agents who work for different real estate companies.
3. Can I ask for some references?
Sometimes, it’s not enough to learn how to interview a realtor when buying a home. You also have to ask for references.
Confident real estate agents should be more than willing to provide references you can talk to. Even if you’re tempted to slack off after you receive a bunch of names and contact details, don’t! It’s better to set up a call with those people and listen to their feedback about a certain agent.
These references can help you have a better idea of how the agent helped clients find their dream home. It will well help you assess how familiar the agent is of a certain area.
Buying a home may be the biggest purchase of your life and you want to make sure you are working with the best realtor there is!
4. How many clients are you servicing right now?
As part of the interview, try to figure out how many clients is the agent is actively working with and how many are buyer against sellers. This is another way to tell how good an agent is at what they do. More clients like to work with agents with a strong sales history. The real estate industry is very active. So, if your agent is working exclusively on your case, dig deeper into finding out why.
Don’t forget to ask where his or her clients come from. If most of his clients are referrals from previous clients, you can rest assured that he is a first-class agent. If on the contrary most of his clients come from online marketing, and he has few or none referrals, you should be concerned.
5. Before looking at homes, do you first require a client to get a pre-qualification letter from a lender?
Answers to this question may vary depending on the real estate agent. But in most cases, buyers agents would say – Yes! If you are going to finance your property you need a pre-qualification letter. This is important because:
- It shows the agent that you are serious about buying a property
- It shows the agent and the seller that a lender is willing to finance your purchase
- You will need it when sending an offer on a property.
To get a pre-qualification letter, you have to talk to a lender and provide him with information about your financial situation. To find a mortgage lender, you can:
- Ask your friends and family for recommendations (recommended)
- Ask your real estate agent
- Find lenders on the internet who are willing to give you a pre-qualification letter
It is important to know that:
- you are NOT committing to use the lender who issued the pre-qualification letter for your final mortgage and
- the lender shouldn’t need your social security number to pull your credit score. If your lender asks for one, make it clear that you only want a pre-qualification letter (not a pre-approval letter) because this first enquiry could have a negative impact on your credit score which will end up in you having to pay more for your mortgage. The loan officer, at this point, doesn’t need your social security number so, please don’t give. However, if you are requesting for a pre-approval letter, it’s a different story and lenders have to pull your credit records for verification.
6. Can you recommend mortgage lenders and other trustworthy professionals?
The financial aspect of buying a home is always important. You can start reading this article: how much house you can afford to know if you are ready to purchase your new home. Some real estate agents can help you with this process but they can also do something even better – recommend other professionals to help you in your home buying journey. So, don’t forget to ask if your agent can recommend a real estate attorney. You may ask the agent to refer an inspector but it would be better to avoid an independent inspector to avoid any conflict of interests.
7. How familiar are you with my target location?
This part is really important and this is one of the most important questions when you, as the buyer, interview a realtor when buying a home. You need to work with an agent who knows your target location. It’s better to hire someone with a solid knowledge of property values and real estate trends in a certain area.
The agent should be able to give you an overview of the real estate market without making you feel lost in the technical terminology. It would also be great if the agent has lived in your target location or at least closed deals for clients in the area for several years.
Agents should be local market experts. It is good if they can provide more property data, including sale price, history, community information, and home sales comparables. It is also good to know if they have access to a lot of information – down to the neighborhood. The more information you have at your fingertips, the more confident you’ll feel about your realtor and the more confident you’ll be that it’s the right home for you.
8. How do you assist buyers in closing the deal?
There are a lot of moving parts when you close on your home. There’s actually a long list of things that needs to be done.
If you’re buying a co-op, a good agent will help his or her client to go through the process and prepare the board package, which is a very sensitive and time-consuming process. When you’re buying a home, you also need an agent who can help with the purchase application and in processing required documents to close the deal.
9. How can I communicate with you?
When interviewing a realtor, it is also important to ask how you can contact your agent on a regular basis. If you like a particular agent, he or she must provide the best means for constant communication. Buying a home entails back and forth consultations sometimes every single day.
You can ask the realtor whether he or she is available for calls and at what specific times. You can also ask for an email address or instant messaging contact details. Don’t forget to inquire about his or her average response time and if they work during the weekends.
Prompt communication is crucial in closing a real estate deal and an agent must relay information quickly so that closing moves along at the expected pace. This way you can get things done faster. Sticking to an agreed timeline would also benefit all parties involved.
10. Can you explain the whole buying process in detail?
As a buyer, you need to understand what goes on from the beginning until the end of the home buying process. Asking this question helps you assess how proficient the agent is on the process. To a buyer who is not very familiar with the complexity of buying a home, knowing how the process works where you live helps you manage your expectations.
A sincere and helpful realtor will let you know other important but otherwise not so obvious aspects of the home buying process. That realtor will also volunteer certain information that he or she thinks will help you in terms of your finances and other details that you need to watch out for when buying a home. This might be a good question to ask when interviewing realtors.
You interview Realtors. They interview you too.
Realtors who are serious with their work are selective of clients too. You should also be ready to answer a few questions pertaining to your budget, timeline, and property requirements. It would be good if you can set a time frame and realistic goals in finding the kind of home you want. Never be afraid to give your feedback as this is also healthy in a buyer-agent relationship.
We’re positive that you’ll find an honest and upfront realtor to represent you. The kind who is easy to call and communicate with, dedicated, and knowledgeable about the entire process. You just need to know how to interview a realtor when buying a home and ask the right questions. There might still be a few challenges along the way. Having the right kind of realtor can be the key to help you achieve a relaxed first-time home buying experience.