Home Buying: Questions To Ask An Agent
What do most people do when they’re thinking of buying a home? Look at homes for sale on the internet. Then what do they do? Contact an agent to go see a home, or maybe two. Potential buyers find agents in many different ways, but the best way is to ask friends and family about realtors that they’ve used and had a good experience with. The worst way is to just pick an agent at random over the internet, meet them one time, and allow that agent to represent them WITHOUT doing any research or asking any questions.
A home is the biggest asset most people will ever buy, and I take that very seriously. I expect to be asked questions, and in fact I like to be challenged because it shows me that the potential buyer is taking the home-buying process seriously as well. I have been the seller’s (i.e., listing) agent so many times when I actually feel badly for the buyer due to the quality of representation that they’re getting.
For example, in Texas during the home buying process, once you put an offer on a house and get it under contract, the buyer has to submit two money payments immediately – one for approximately $100 (option money) and another for 1% of the contract price of the home (earnest money). That earnest money is often a large sum of money and buyers don’t want to lose that money if they need to back out of the contract. A good realtor will be watchful and mindful of the critical timeframes in the home buying process that could cause that money to be returned or forfeited – this is critical and is an important part of the job of a realtor! But many realtors are not as aware of the contractual timeframes, and sadly, buyers sometimes have to lose that money when that could have been avoided simply by a buyer agent paying more attention to the transaction. In fact, this scenario was noted as One of the 5 Foolish Mistakes a Home Buyer Can Make by USA Today. I just had this happen, and I am on the listing side…the buyer terminated after their time period ended for receiving their earnest money back, and now contractually they owe the seller $2,500, and they can’t buy the house!
So, these are some vital questions a buyer agent should be asked:
- How many buyers have you helped buy homes this year and/or last year? In my opinion, that answer should be at least 10, which is a number that represents enough business that the realtor knows what they’re doing and does it on a regular basis. Also, don’t hesitate to ask for references, especially if this is a realtor who wasn’t a referral.
- What is the basic home-buying process? A realtor should be able to answer this quickly and effectively. I even provide a flowchart document for my buyers that goes through the process in a simple and graphic way – here’s a link to my Home Buying Flow Chart.
- What do other houses like this one sell for in this area? Many realtors won’t be able to answer this one on the spot, but they will offer to find out for you. Most often, I’ll say to a buyer that I think a home is priced well, or priced high, or give a general response, and then I’ll go do specific research to answer that question. The point of this is though, that a buyer needs a realtor to understand why they’re asking and to be willing and able to provide the answer.
- What are some ways I can make my offer stand-out to a seller? An agent that helps a lot of buyers and is familiar with helping buyers in this sellers market (i.e., multiple offer market) will have some good ideas for a buyer that will help their offer stand out.
- What should I expect to spend before closing? And is any of that money refundable? No buyer wants to put an offer or a contract on a house thinking they’re either going to lose money or back out of buying it. But, things happen and it’s an agent’s fiduciary responsibility to protect the buyer’s money to the furthest extent possible. This is a question that a good buyer agent can answer immediately. If the realtor can’t answer this question, find another realtor!
Bottom line, buyers need an agent they can trust, but should take great care not to put that trust in the wrong realtor. They shouldn’t be afraid to ask questions and demand answers of a realtor – a good one will not hesitate to answer them and will be up to the challenge! Questions, comments, want to ask me these questions? I’m ready, just get in touch!