Selling Real Estate? Some Suggested Interview Questions For Prospective Brokers (LinkedIn Cross-Post)
My mom was a real estate investor, and after her death I assumed responsibility for a portfolio of 15 real estate properties to manage and sell. This is the first of a series of posts where I’ll share some lessons I learned from selling 11 of her properties in 11 months.
In this post, I’ll discuss how I chose a listing broker. In some cases, my mom had a solid existing relationship with a broker that made them the obvious choice. In most cases, however, I started from scratch. Often, I could generate a list of broker candidates through personal referrals from my personal network. Also, I sometimes got helpful referrals from the property manager (where there was one) or from the property appraiser we needed to hire (they know who is moving properties in the area). I interviewed no fewer than 3 brokers per property.
Here is the checklist of questions I used in my interviews:
* Describe some of your recent transactions similar to this one. [Note: for example, if I was trying to sell a condo, I wanted to see recent condo transactions.]
* Is there a better or worse time to sell? (i.e., is there a seasonality to the market that will affect sales price and listing duration?)
* Describe the types of buyer segments you think are likely to want to be interested in the property. [Note: this is just marketing 101. Who are your target customers, and what do they want?]
* What steps will you take to market the house, and do you do anything unique to make sure the target buyer segments know about the listing? [Note: I rarely got great answers to this question. No matter what they say, most brokers depend heavily on the Multiple Listing Service as their primary marketing tool. Still, just asking the question signaled to the broker that I expected them to up their game. Also, I found some brokers are more comfortable with social media marketing than others; it’s a good way to judge if a broker is trying to stay ahead of shifting marketing trends.]
* What work do you recommend we do to prepare the property for sale? Will you help coordinate getting that work done?
* What is your commission rate and what services do you include as part of your commission? [Note: commissions are totally negotiable. Even if a broker doesn’t budge on commission percentages, they may be willing to absorb some expenses (e.g., cleaning, inspections, closing costs) out of their share. If your broker sources the buyer, they might also be willing to take a discount because they don’t have to share the commission with a cooperating broker.]
* Do you have a preliminary estimate of a recommended listing price? [Note: I found the answers to this question surprisingly insightful. It told me a lot about how the broker viewed the property and the competitive properties. In some cases, it was clear that some brokers planned to recommend a below-market price to get a quick sale even if it left money on the table; and other brokers tried to “buy” the listing by promising an above-market price that they could never deliver.]
I don’t have any guidance about how to sort through the brokers’ answers to these questions. A lot will depend on your intuition. If I didn’t like the answers I got after interviewing three brokers, I kept adding new broker candidates until I found someone I could trust and who matched my work style. Choosing a sub-optimal broker candidate will inevitably lead to months of frustration, so don’t settle!
A final thought: I prefer to communicate with emails rather than phone or texts, so I needed to ensure that each broker was comfortable with email (not all of them are!). Thus, I required each broker candidate to follow up with me by email after the interview (usually, I asked for a Comparative Market Analysis). You’d be amazed how many brokers didn’t follow up with me or took weeks to do so, and that immediately ruled them out.