Top 10 questions to ask a potential realtor
1) How long have you been in the business?
The length of time in the business isn’t always an indicator of a realtor’s abilities, but generally speaking it’s a great place to start. Like anything else, experience is the best educator. A person who has many years in the business has seen a lot. They have been into several homes and should know what to look for. They have also experienced different real estate scenarios, which can really help in negotiations.
2) Do they understand the structure of a home?
This may seem very basic, but you would be surprised how many agents don’t have the knowledge of whether or not a home is structurally sound. More times than I can count, I see homes selling that have obvious structural issues – and going for huge dollars, without a house inspection.
3) Do they understand the mechanics of a home?
Does your potential realtor understand proper wiring of a home? What about plumbing? Do they have the ability to determine how old the furnace or roof is? What are the windows like? There are so many components to a home. A realtor should be well informed and educated on each and every one of these. If not, it could cost you thousands of dollars down the road.
Pre-purchase home inspections are invaluable. They are one of the best investments a buyer can make. In today’s very competitive home buying environment, often writing an offer subject to a home inspection will mean your offer is rejected. As well, there is a cost to home inspections. A realtor should be able to point out many of the homes major deficiencies before a home inspector is called and save you the cost.
4) Does your realtor require you to sign a home buyer’s contract?
A home buyer’s contract is essentially an agreement between a buyer and a realtor. The contract states that the home buyer is committed to using that specific realtor for a certain period of time. Often the term is anywhere from six months to a year in length. With this in mind, do not sign a buyer’s contract. They are unnecessary. Your loyalty to the realtor you choose should be dependent on how hard they work for you and how valuable the advice they provide to you is. I am a firm believer that if I am providing my clients with the best possible services and advice, they will not seek the services of another agent. If they are unhappy with the services I am providing them, then they should have the right to seek out another realtor and not be contractually obligated to use me. Besides, why would any realtor want to continue working with prospective buyers who no longer wish to work with them?
5) Does your realtor keep you well informed and educated?
Staying on top of current legislation, rules and regulations is a critical part of a realtor’s job. For example, there have been changes to the regulations regarding older wiring (known as knob and tube wiring) in recent years. In the past, knob and tube wiring was acceptable. Now, homes with this type of wiring can no longer get homeowners’ insurance in most cases. I have seen homes purchased for thousands of dollars over the list price, in bidding wars, that contained knob and tube wiring.
6) Will your realtor do a Comparative Market Analysis (aka: CMA) on homes you are interested in?
A CMA is a study into what the approximate value of a home is. It looks at similar homes in similar geographic areas that have recently sold. Using this gives realtors an accurate guideline into what a specific property is worth. When realtors go to list a home, a CMA is always done to determine value. Yet, I have found many realtors don’t provide them to their home buying clients. How much should you offer on a home you are interested in? How much are similar homes selling for, so that you don’t overpay? These types of questions can be answered with some level of confidence using a CMA. Make sure your realtor performs one for you on each and every home that interests you. Even if you don’t end up buying that specific home, a CMA is one of the best ways to educate yourself on the market.
7) Does your realtor have a general idea of the life expectancy of the components in a home?
Things wear out. Things need to be replaced. Furnaces, shingles, windows, taps…and on and on and on. A realtor should be able to look at many of the components of a home and give a home buyer a general idea of the life expectancy of those items. The key to a successful home purchase is making the most informed decision as possible.
8) Does your realtor have an idea of the costs to repair/replace items in a home?
No home is perfect. As much as you may go look at a home and fall in love…trust me, it does have problems. A home with a brand new “to die for” kitchen may have shingles that need to be replaced in the next two years. Does that mean you shouldn’t buy it? Not at all. Knowing that the cost to replace those shingles will be approximately $4000 can help you determine whether that home is still in your budget or how much you should be offering. Your realtor should also be able to give you a ballpark of how much it will cost for replacements and labour. A kitchen may cost $10,000 to replace the cabinets; however, you also need to know that it may cost you another $5,000 for the installation, if you are not inclined to do it yourself.
9) Will you be hiring a specific agent or their assistant/buyer’s agent?
Many realtors have assistants and buyer’s agents. It’s a very common business model used in the world of real estate. However, you need to know who will be helping you find a home – you don’t want to be stuck with a realtor’s assistant when you want the actual realtor. Make sure you ask in advance who you will be working with. If it turns out that you won’t be using the “main agent” you thought you would be using, then you should proceed with interviewing their assistant/buyer’s agent.
10) Does your agent keep on top of current economic trends as they pertain to real estate?
I cannot emphasize this enough. Buying a home is a huge decision. It can impact your family’s economic well-being for years to come. You need to know not only the value of the home you are about to buy, but also what kind of economic climate you are investing in today and tomorrow. If you are considering getting into a bidding war and paying thousands of dollars over list price, your realtor should be able to justify the dollars you are offering based on future economic forecasts. Understanding the economy is a critical part of a realtor’s job.
Helping you be informed and objective
You don’t need a realtor to advise you on how nice a room is painted or how great the stainless steel hardware is on the kitchen cabinets. You can determine that for yourself. You need your realtor to help you make an informed, objective home buying decision.