5b) What is the average price of your listings in the past year?

Ideally, you want this response to be fairly close to the price of the home you’re looking to buy or sell.

5a) What percent of your listings sell within 90 days?

The average home in the US takes about 120 days to sell. If your agent sells over 50% of his homes in 90 days, they are above average. However, this is somewhat dependent on the market you’re in. In a hot market, the average time to sell can drop dramatically and vice-versa in a cold market.

4) How many years have you been working as a real estate agent? How many years have you been working as an agent in this area? Have you received any professional awards in this time?

Anything above 5 years as an agent in a given area is very good. Less experienced agents will sometimes be willing to go lower on commissions. Recognition within the industry is often a sign of a high-quality Realtor.

3) Are you a full-time broker? How many transactions have you personally closed in the past 2 years?

A full-time broker is generally preferable to a part-time one as they will have more experience and should be more accessible to help you through the purchase/sale process.

The average real estate agent only closes about 3-4 transactions per year. Generally you want an an agent that has more transaction experience to make sure they know what it takes to make your purchase or sale go smoothly. On the other hand, someone without a ton of clients may have more time to devote to you. Ask this question to understand where you will stand.

2) What is your policy on cancelling a listing agreement if I am not satisfied with what you are doing? Or if I decide I no longer wish to sell my home?

More often than not, once you sign a listing agreement you are bound to its terms for the duration of the contract. Cancelling a listing agreement once signed is generally not allowed to protect the agent’s investment of time and resources into helping you buy/sell a home. To protect yourself, consider the following.

a) Make sure your listing contract is not longer than 90 days. If you are happy with how your agent is working, you can always renew. Many times agents will aggressively push longer contracts. For them this makes sense, since it locks you into paying them a commission even if they are not doing a good job and the home sells itself. Don’t allow this. 90 days is sufficient in decent markets to sell a home (so what are they so worried about?).

b) Consider opting for an open listing or a exclusive agency listing. An open listing means that you will pay a commission to whichever agent brings you the customer who buys your home or shows you the home you buy. An exclusive agency listing (vs. exclusive buyer agency and exclusive right-to-sell) means that if you find a home buyer or home yourself then the agent is not entitled to a commission. However, you may only work with one agent.

1) How much do you charge in commissions?

When selling a home:

Some Realtors will imply that there is a ’standard’ commission rate; there is no such thing, a commission rate is always negotiable by law. While the difference between 4% and 6% may only be 2%, the difference in terms of money in your pocket can be quite significant. 2% saved in agent fees on a $300,000 home is $6,000 in your pocket. Not bad for a little negotiation.

When buying a home:

Most agents sell you on going with them to buy a home because after all, “It’s FREE!”. In reality, it is but it isn’t. The buy-side agent splits commissions with the sell-side agent. So, if a sell-side agent is getting paid 6% by the seller, the buy-side agent will generally receive half, or 3% of the sale price.

What many people don’t realize is that agents in most states* (footnote states where not allowed) are allowed to rebate you as much of the commission they receive from the sell-side agent as you can negotiate with them. In many cases, you can 50% or more of their commission as a cash rebate to you the moment you buy your home! On a $300,000 home, this means you can get as much as $4,500 cash back!

If you are interested in having high quality real estate agents bid on their commissions for your business, check out http://www.seekingagents.com/

Note: Rebate is not allowed in Alaska, Iowa, Kansas, Louisiana, Mississippi, Missouri, Montana, New Jersey, New York, Oklahoma, Oregon, Tennessee and Wyoming