For years Trish Mutch was told she should become a real estate agent.
The broker behindMutch Property Group was a long-time general contractor who constantly found herself invited on walkthroughs for her friend’s clients. Mutch charged $250 every time she educated her friends’ clients on signs that a home will require expensive repairs.
“By the end of it, I was making more money on Saturdays and Sundays walking agents and their clients through a property than I was as a general contractor,” she says.
Trish says she has always being a straight-shooter, no matter the anticipated outcome. Her realtor friends appreciated it, their clients appreciated it and now she brings that same brand of honesty to her own clients and to this week's question:
What questions should you ask an agent before you hire them?
If you were only going to ask one question, it should be, “How many transactions have you done in the last 12 months?”
You want to avoid a part-time agent. If you're choosing a part-time agent who only does a couple of deals a year, they're going to be very attached to the outcome because it personally affects their bottom line. They don't earn enough money to remove their own financial interest from the situation.
You want to know how many of those transactions over the last year were buys, how many were sells and how many were leases? This should be asked in conjunction with, “How long have you been in the business?”
An agent who does 12 deals or less a year is a part-time agent. Personally, I wouldn't work with anyone who has done less than 20. I'd really be looking for someone who does 20 to no more than 60 deals a year. If you work with someone who does 100 or more, number one, you're not going to be working with them. Chances are they're going to pass you off to one of their minions. In that case, you’re probably interviewing with one person, but working with someone else.
It also depends on the price-range they work in. If the agent is in the luxury real estate market, they may only be selling three to five houses, but you want them to be selling more in other price-ranges. This is why you have to be specific with your question: not only, “How many transactions have you done?” but “How many transactions have you done at my price-range?”
While that's the number one question, it's far from the only one. The next question I would ask is, “Who is your back-up?”
I'd be very worried about working with a single agent. The single agent can't be everywhere -- this is one of the reasons why teams are becoming so prevalent in today's real estate industry. Toronto is a very fast-paced market. If the agent you're considering works by themselves, ask them, “Who's your back-up?” When they're busy, sick or attending their kid's Bar Mitzvah. Find out who steps in for them, and ask “Why would I want to work with them as well?” Someone who does 40 to 50 deals a year is going to have a team of people. Get them to talk about their team and find out what sets them apart.
I would also ask, “Why you? What's your value proposition?” It's basically asking, “Why should I work with you when there are 54,000 agents in the city?” They should be able to give you that answer immediately and in 30 to 90 seconds. You'll know you're working with a professional if they can do that. If it takes them ten minutes, they're making it up on the spot and they're not professional. They should have their script nailed down.
As a supplement to their value proposition, you should ask them, “Do you have systems in place and what are they?” I would also ask, “Do you discount your commission?” and if they say, “Yes,” find someone else. The reason is you want someone who knows their value proposition and they stand behind it. What you don't want is a discount agent. It usually says right on their website, “How do we do this at a discounted rate? High volume.” You're not going to get personalized service with high volume. They're not going to do anything for you and I personally think you're overpaying for that discount. You should first ask yourself, “What level of service do I want here?” then ask them, “What level of service are you willing to provide?” If you have a match, great, if not, you might want to keep looking.
You should really be looking for a fighter – that's why you hire a real estate agent – someone who is going to go out there and nail it for you. Not a timid person. Someone who will fight and do the work.
The point of a real estate agent is to come in, create your To-Do List and say, “I'll take care of that list.” If, as a realtor, I discount my commission, how else am I going to pay amazing people to do everything right? To look after you fully and to be there for you the whole way through?
That leads into the final crucial question actually, “Who else am I going to be working with and what's their experience level?” I'm talking about the people the realtor is using to get your home ready for sale: the stagers, photographers, handymen, etc. They shouldn't just have one, but three. Who are these professionals and where does their knowledge come from? Any good realtor should have a list of these people – including lawyers and mortgage brokers -- and you should want to see it.
If you ask all these questions, not only will the agents' eyes pop out of their head, but you'll have a really good idea of who you're dealing with.