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The Most Important Questions To Ask Your Realtor

questions to ask your realtorAs a Realtor in Edmonton, Alberta I find it interesting the amount of mis-information out there in circulation. I find I constantly am educating folks on the same topics and empowering them to make powerful choices that make a direct positive impact on their future. This impact usually comes in 2 ways.

1. The direct impact of choosing a home that is going to be a right fit for their family or future family based on their budget, etc.
2. The financial impact of making informed decisions up front based on what they value as a family.

The latter of these is often the most impactful as it has a compounding effect over time (typically with money they save). You need to know what type of questions to ask your realtor. These top five questions are important as they can set the stage for the relationship with your Realtor and have a large financial impact for years to come.

Question #1

What made you get into Real Estate, and what do you like most about it? This is an open-ended, feel good question to get your prospective Realtor Talking. Most people don’t get asked questions like this that make them think. It helps you develop a relationship and learn about your REALTOR to see what makes them tick. Do they think like you do? Do they have similar values? Does their story give you any indication you would want to walk away or that you might potentially be taken advantage of? It is a great starting point to gauge the sincerity of your Prospective Realtor.

Question #2

What do you like least about being in Real Estate and working with Buyer/Seller Clients? Ahh, this is a testing question and a fun one to ask. It comes out of left field and let’s your REALTOR know that you are shopping around and you don’t want to be taken advantage off. The purpose of this question a high level gauge of their sincerity. Do you think they are giving you a canned answer or are they going to be honest with you and tell you how it is? What most people don’t know is that being a REALTOR can be very stressful and like any career there are going to be difficulties that we all meet along the way. If they give you an answer that says they never have problems and everything is superb all the time I would potentially consider that a red flag and a reason to dig deeper.

Question #3

Do you do transaction brokerage (where you represent the buyer and the seller at the same time)? For more information about this click this link to review the “Agency Relationships Guide”:

This is a conversation that every Realtor must have with their client. Not just the first time but every time they look to establish a relationship to work together in a Real Estate Transaction. This question can have a different impact depending on wether you are selling or purchasing. Here is the best way I like to relate this to folks with a simple question.
When you buy a home do you want to use the same LAWYER or a different LAWYER than the person selling the home? Would you say there is a potential conflict of interest if you used the same Lawyer?

If the answer to the second question is YES then the likelyhood is you want to work with a REALTOR that understands this and doesn’t practice Transaction Brokerage with you. Transaction Brokerage can have a few forms (refer to the guide to learn more), but the one you should care about is where one REALTOR is helping both the Buyer and the Seller in the same transaction. Although many REALTORS do this in a fair and even handed manner you always take a chance. It leaves you with the question in that back of your mind…who are they really working for me or the other guy??

It is because of how uncomfortable I am with this situation I drew a line in the sand the day I started as a REALTOR and said I would not operate my business in this manner. I will only work for one client at a time in a transaction. This has cost me a few deals along the way, but it has also raised my profile with many clients and allows me peace of mind to sleep well at night. Understanding Agency and what your options are is very important in the Real Estate transaction.

Question #4

How do you get paid? This always comes up but often at different times in the process. I would start with this early so you have no surprises. For buyers 80-90% of the time they do not have to pay anything! This means that they can have my services for FREE and get all my experience and assistance for nothing. However, for buyers it is important to know the landscape is changing. Now Buyer Brokerage contracts are extremely common. This is an agreement where you are both committing to work together for a period of time. There is usually a base amount of compensation built into the contract that takes effect after the property is sold or a minimum amount. As an example: I meet Joe, Joe asks me these great questions and we decide to work together. We setup a Buyer Brokerage agreement and Joe understands that if he buys a property where I will be compensated (most MLS listed properties) then he gets my services for free because I will be paid by the seller after closing. However, Joe and I agree that if he decides to buy a For Sale buy Owner property or one that pays less than the minimum amount we decide on he will make up the difference. This could be $2000, 4000, 6500 and so on depending on the scope of what you are doing and the work involved. Therefore if we agree on $5000 and the amount offered by the seller is only $4500 then Joe would have to come up with the other $500.

When selling a property there is an entirely different picture. Remember that everything is negotiable and there are no “Industry” standards. Also consider if you are selling a home and buying one with the same Realtor if they will negotiate more on the sale commission of the house as they stand to get 2 commissions in that process. There are many options out there today to structure compensation in a Real Estate transaction, just understand that there is flexibility and you should be clear what you are going to pay at the end.

Question #5

Do you believe in teamwork? Who do you have on your team that can help me through this process? Ok so this is 2 questions but they are in the same ballpark. Firstly I want to know if this person actually believes in Teamwork or if they like to fly solo and leave you to sort everything out on your own. The relationships your Realtor has created over life can become an extension of the Realtors Value to you. Especially in the actual transaction, having a Mortgage Broker, Realtor, Home Inspector and Lawyer that know how to work together as a team with all their focus on the success of one client is a very powerful thing indeed! Here is a just a small list of people that your Realtor should be armed with to help you and be able to connect you with: lawyers, mortgage brokers, home inspectors, property managers, handyman, electrician, plumber, drywaller, furnace replacement/cleaners, carpet cleaners, home cleaners, condo document review companies and more.

Question #6 (Bonus Question!)

Do you specialize in anything such as an area, a property or client type? This can be very helpful if you are looking for something specific or need someone with specific knowledge in an area. Be mindful though, a designation could simply provide the illusion of knowledge. As an example I do a large amount of work with first time home-buyer’s and first time investors. This wasn’t intentional; it just happened naturally. This crosses over into both Houses and Condos having equal experience in both areas. It is not area specific. If you are looking for something specific this could be helpful for you as long as you ask some additional questions and do some more digging to test the level of knowledge your “Specialty REALTOR” has in that specialty.

Once you have had a chance to ask your questions and make a decision about what Realtor you like or seems like a good personality fit for you, then tell them. Let them know that they have been chosen and that you are making a commitment to work with them. This lets the Realtor know you are serious and if they put in the effort they will be rewarded for helping you.

Finally, as a suggestion I would ask friends and family for a reference to a Great REALTOR. Don’t ask for a good one, ask for a great or exceptional one. They will have to think about it. Then ask them to give you a reason why they would recommend that person. If it’s because they are related or a family friend and they have no other back up reason then maybe it won’t be the best fit. But if you get a story about how incredible and awesome their REALTOR was, they invited him to their wedding and introduced him to all their family then you might be onto something!

To our mutual success in life and in Business,
Richard Canfield

Richard Canfield is a passionate educator who brings energy and enthusiasm for financial education everywhere he goes. Richard helps his clients discover and harness the power of the incredible Infinite Banking Concept® in Canada as a trusted advisor with McGuire Financial Group. He assists his clients in planning strategically around their Home and Investment property decisions as it relates to their overall financial goals as a family. A Speaker, Financial Coach, REALTOR, and Real Estate Investor, Richard is focused on building relationships and empowering others to create their life success.
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