The 7 Critical Questions to Ask Your REALTOR® in Today’s Market
Choosing the right REALTOR to sell your home in today’s market is absolutely critical to achieving your goals and to having a smooth transaction. Having an experienced and capable Agent who is familiar with homes like yours and is up to date on the market realities that will affect the sale of your home is essential!
Here are seven questions to ask potential Agents during your interviews. Their answers will allow you to quickly assess whether an individual Agent is a good choice for you.
1. What experience do you have selling homes in our neighborhood or price range?
This is a great question to ask during your Realtor interviews! You’ll want to know if a particular Agent has
any experience selling any homes in your area, or even close by. Although this is not essential to a successful
sale, it could be a factor. Honestly, many very successful Agents do not “specialize” in a neighborhood or
area, and they often find themselves working across a large metro area because their business has been
built on developing lasting relationships based on professional and ethical service, and they therefore receive
referrals from past Clients that take them to different neighborhoods. The answer to this question can be
telling though, and if you are interviewing a seasoned Agent who does get a lot of referrals, that should come
out in the answer. This question may also tell you if the Agent does not have a lot of experience in your area
or even in the business.
2. What is the market “trend” in our neighborhood?
This question would give you insight into the depth of research that an Agent has done prior to your meeting.
An Agent who has done great research should be able to discuss the most recent and longer-term trends in pricing, average days on market, and absorption rates. This “trend” discussion could include changes in month-to-month data and also year over year. Changes in these indicators often reveal whether Buyer demand for homes like yours or your neighborhood is strengthening or weakening, and that information can be critical in the final pricing decision. In a slower moving market, pricing can the one factor that would determine whether your home will sell in a timely manner and you are ideally looking for an a Agent who has done the right research and is in a position to provide you with valuable advice on a pricing strategy. An Agent who has not done detailed research might have a general response to this question, and advice on pricing could be vague or non-existent.
3. What is the current “Absorption Rate” in our neighborhood and how has it changed over the last two years?
An “Absorption Rate” in an area or neighborhood is an especially revealing statistic. It refers to the number of available listings that sell in a given month, and quickly reveals if the specific market in that area or neighborhood is a Buyer’s Market or a Seller’s Market. A high rate indicates a Seller’s Market and a low rate would be reflective of a Buyer’s Market.
For example, if a neighborhood has 30 currently available homes for sale and in the prior month there were 5 sales, the Absorption Rate would be 17% and it would take approximately 6 months to sell all of the 30 homes on the market if there were no new listings. This would be a Buyer’s Market since the Buyers would have the upper hand in negotiations with so many homes to choose from.
Conversely, if there had been 15 sales in the prior month out of 30 available homes, then the Absorption Rate would be 50% and it would take about 2 months to sell the 30 homes on the market at that rate. That would be a strong Seller’s Market, and the Sellers would have the advantage in negotiations with several Buyers potentially competing for the most attractive homes.
Since this information can be so critical in pricing, an experienced Agent would be able to discuss this with you and again provide you with advice on pricing based on the current Absorption Rate for your market area.
4. What are the elements of your Marketing Plan for our home?
Certainly you would want to know what the Marketing Plan of your Agent would be, and how comprehensive.
Most Agents today should have a fairly well developed plan for marketing, and with the Internet this is easier and broader than possible in the past. One essential item today would some level of professional photography since the images of your property will often determine the value that the Buyer establishes themselves for your home, but it will also impact the total number of showings you will get. Your home will be competing for attention online with other homes and the quality of the images used in marketing can have a significant impact.
The Agent should have samples of the printed marketing materials they intend to produce, and be able to describe any tech based marketing such as Facebook ads, broadcast emails to top local Agents, any MLS based marketing and the geographic reach of that MLS, etc.
Much of the internet based marketing to real estate search sites is automated today, so almost any agent should have a good plan for that, but what could more interesting is any type of “targeted” marketing the Agent plans to do, which leads to the next question below.
5. Who do you think the potential Buyer will most likely be, and do you do any targeted marketing for that Buyer profile?
Certain homes will often attract a certain Buyer profile. Higher end homes tend to attract more white collar professionals and Entrepreneurial business owners, while others might appeal more to “move up” families searching for their second or third home.
Your Agent might have a good response to this question and may have a targeted marketing campaign designed to market the home to most likely Buyers. A good example would be a campaign to market a “move-up” home by mailing printed information to a neighborhood that would be approximately 30% less in price. Most move-up Buyers will purchase a home about 50% more than their previous home, and this could be very effective.
6. What do you do if a home does not sell in a reasonable timeframe?
This question is a good one at discovering how creative an Agent might be with a listing that does not sell in the expected timeframe. In a slower Buyer’s market, Agents should have a more comprehensive marketing plan since homes can be on the market for an extended period of time. In that situation, the creativity of your Agent with the marketing of your home could be a very important factor in getting your home sold. This could include staging services for your home, targeted marketing for certain Buyer profiles, virtual or video tours, drone video, social media based advertising, international marketing channels, etc.
Keep in mind that while marketing is important to the sale of your home, how your home competes in the market with the other available homes can be even more important. In a slower Buyer’s market evidenced by a low Absorption rate, the ultimate marketing tool could be the pricing of the home, and being he best “deal” in the market often in the deciding factor in the sale of your home in that type of market.
7. What is your pricing strategy, and how should we price our home in this market?
Your Realtor should have a pricing strategy in mind for your home, and for the current market conditions in your area. An experienced Realtor monitors the market conditions constantly since they can change rapidly, and the market conditions will often dictate what pricing strategy will be most effective now. Your pricing strategy can also be influenced by your motivation to get your home sold, and the time frame that you desire. Listen carefully to the Agent, and you should hear that they are on top of the market, and that they have a suggested pricing strategy in mind.
Asking good questions and listening carefully to the answers can lead you to the right Realtor for marketing and selling your home. The right Realtor can have a huge impact on the final sales price and net proceeds from the sale. Smart Consumers ask great questions!