If you’re buying or selling a house, you’re probably going to use the services and expertise of a real estate agent. Having someone on your side making some of the biggest decisions of your life can be a life saver. But do you know what you should be asking them before and during the process?
What Questions Are Important
Considering this is a major decision, both financially and for life, you need to feel comfortable with your real estate agent. That means being able to ask them questions, sometimes even uncomfortable questions. Especially if you’re trying to buy in the current housing market, the odds are high that your offers might not be accepted on multiple homes. You need to find an agent who can sympathize with that but won’t give up. Each person is going to have their own questions they want answers to, but here is our list of 7 questions to ask your real estate agent to make sure you’re in good hands in the process.
1. Will I be working with you directly?
Working with an agent is like having a new best friend. They should be in constant communication with you and will be showing you several homes if you’re buying. So when you pick an agent, you typically want to work with that person.
Some newer agents or agents at brokerages might have a more team approach. This means any agent at the brokerage could show you houses, answer calls or emails, or work up your paperwork. For some people, this is great as it can be a speedy process. Some people may not like this approach and would prefer to work with someone who knows them, their situation, and exactly where they are in the process. There is no right or wrong for this one, but it is good to know up front if you have a strong preference.
Even if you do have an agent that you are working with individually, it’s possible there will be times that you’ll have to work with another agent. For example, when we worked with our agent he let us know that he had a vacation coming up (agents are people with lives too!), and asked a fellow real estate agent to show us a home when he was gone. Or, with the fast-paced market these days, your agent might have a showing booked with another client for the same time you were hoping to look at home, and they might have another agent meet you there instead.
2. How familiar are you with…?
If you’re looking to buy or sell in a large metropolitan area, it’s a good idea to ask your agent if they’re familiar with the specific area you’re looking at. Let’s use Chicago for example. The Chicago suburbs sprawl at least a hour in any direction from downtown Chicago. If your agent usually operates in the far northern suburbs and you’re looking to buy in the southern suburbs, the market conditions could be completely different. You could end up overpaying for a home, or selling your home for well under value if the agent isn’t familiar with the area.
The same goes for the style of house you’re looking at. If your agent usually sells condos in the city but you’re looking to purchase a hobby farm, it’s possible they have about the same amount of knowledge as you do when it comes to the hobby farm market and comparable rates.
Real estate agents are very resourceful and have a network of agents they can ask questions to, but if they don’t have much experience with what you’re looking for, it might be in both your best interests to work with a different agent.
3. How does your commission work?
Real estate agents earn their pay on commission, or a percentage of the purchase or sale price of your home. This commission percentage is completely different for each real estate agent based on a number of factors. The biggest are if they need to pay a brokerage, if you were referred to them by another agent there is typically a referral fee that they either tack on to their commission or take out of their commission. If the agent is part of a group of real estate agents, called a brokerage, there is usually a fee or percentage of their commission that they need to pay them as well.
Even with all those factors, the typical range of commission is 5-6% of the sale price. Usually, the buyer pays for the commission, unless you negotiate with the sellers on who will pay. The the commission is split between the selling agent and the buyer’s agent at their rates. Whoever you decide will pay the commissions, they don’t get paid until you close on your home, since technically an agent’s work isn’t over until the home is officially sold. Keep this cost in mind when you’re estimating closing costs.
4. Is this realistic?
Once you’ve established that your agent is familiar with what you’re looking for, the real questions can start. They need to know exactly what you’re working with and what you want.
If you’re pre-approved, let them know and let them know for how much. Then let them know what you’re looking for. Bedrooms, bathrooms, neighborhood, amenities, schools, everything that’s important to you. Now you need to ask them if that’s realistic.
This can save you so much headache and heartache down the road. If you can be upfront with your agent, they can let you know if your expectations are realistic. Just because you have a wish list or idea of exactly what you want doesn’t mean that it even exists. Or, if it does, that it will be in your price range.
Be prepared for this conversation to let your agent know what you’re willing to be flexible on and what is a necessary component to make the transaction happen. For example, if you absolutely need 3 bedrooms, but don’t necessarily need the yard to have a fence because you can put one in yourself.
5. What should we be concerned about?
This is a double question. The answer will let you know some of the challenges you could be up against. But, it will also give you some insight to your real estate agent’s experience. This also ties into the previous question. Once they know what you’re working with, they should have an idea of what issues you could encounter when buying.
For example, if your area is mainly two-story split level homes, and you’re looking for a single-story ranch, they should let you know that inventory is going to be low. If you’re also set on that ranch style, your agent should tell you that you might have to sacrifice the amount of bedrooms to get it.
If you’re selling, your agent should be able to do a preliminary walkthrough of your home and point out anything that could hinder your chances. They might point out you’re location on a busy road might not attract buyers with children. This can significantly impact the number of people that look at your home. Or, they could identify an issue that looks structural that could come up in your inspection, so you can be prepared for that, or if possible, fix it before your home goes on the market.
6. Do you know a…?
Having a real estate agent makes sense when buying or selling a house. But, there are so many other people you’ll encounter in a home transaction. Ask your agent if they have a preferred title company, mortgage lender, appraiser, contractor, home stager, repair person, etc. Sometimes getting on a schedule is tough, but if your agent has an existing relationship, things can get moving quickly.
7. How does all this work?
Finally, you’ll want to ask your agent to walk you through the whole process. Whether you’re buying or selling, and especially for the first time, you want to feel confident in the process. Your agent should outline the steps that are to come and what is needed from you in each step. They should also be able to talk with you about the mortgage process and how payments will work, but might defer you to your loan officer.
It’s up to you to ask the questions that you have of an agent before working with them. While these are some of the most important, each home buyer and seller is unique with unique housing needs. Just remember to feel comfortable with whatever agent you decide to work with and feel like you’re able to ask your questions as they come up.
If you’re a hero and looking for an agent, let Homes for Heroes connect you. When you sign up, we automatically match you with one of our dedicated, experienced agents local to you. Plus, when you work with one of our agents, you’ll get a check at the end of closing for 0.7% of the purchase price of your home. It’s our way of saying thank you for your service to your community.
About the Author
Maggie is the Content Manager at Homes for Heroes. She has bought, sold, and refinanced a home and gives her personal views on all three types of home transactions. Her Heroes include her father (teacher), brother in law (veteran), and friends and family in healthcare and law enforcement. She lives in Minneapolis, Minnesota with her husband and two dogs. If you have an idea for an Open House topic, email Maggie here.