5 More Questions Before Choosing a Realtor to Sell Investment Property
Selling Investment Property- 5 More Things to Ask a Realtor
Choosing a Realtor to sell your investment property is a huge decision. Picking the wrong one can cost you a lot of time and money. Just as you would screen prospective tenants before selecting one to live in your rental property, you must also screen prospective Realtors. Now that you know the 3 Main Things to Ask a Realtor, you can learn the additional questions to ask. Here are five more questions to have answered before hiring a Realtor.
Have You Ever Worked With This Type of Investment Property?
An individual may be a skilled Realtor, but they may not be skilled in selling your specific type of investment property. Trying to sell a retail property is a completely different buyer base than trying to sell a single family home. A Realtor who has seen much success in a niche of selling $200,000 homes, may not know the first thing about finding buyers for a $1 million dollar multi-family property.
It is important to learn the type of properties the Realtor has expertise in selling. The MLS will have a real estate agent’s production record. Ask for a copy of this record, and then go through the listings to see if the Realtor has ever worked with your type of investment property.
While a Realtor with expertise with your specific type of property may be the best fit, do not completely rule out a Realtor because they have never sold your type of investment property.
They can still be very successful at it. Look at the results of the listings they have sold in the past, as well as trusting your gut.
How Much Do You Charge as a Commission?
When you are hiring someone to do work for you, you need to know how much you will be paying for their services. Realtors do not usually charge a flat fee for selling a property.
Their fee is a percentage of the sale price of the home. Therefore, the more they can sell your property for, the more they stand to make.
A typical Realtor’s commission will vary between three percent and ten percent of the sale price of the property. Three percent is low, but an agent may be willing to accept this if there is no other Realtor involved with whom they would have to split the commission.
Knowing how much you will have to pay the Realtor will help you decide if they are the best fit for you. If you are interested in selling your property for profit, a Realtor’s commission can quickly eat into any potential profit.
A couple of percentage points make a big difference, especially the higher the sale price of the property is. For example, on an investment property with a $600,000 sale price, a ten percent commission would be $60,000, while a six percent commission would be $36,000. That is an extra $24,000 of potential profit in your pocket.
The Realtor’s commission should only be one factor that you consider when hiring a Realtor. You should always look at their success as a Realtor as well. If they charge a higher commission, but are able to get your property sold two months earlier, they may be worth it.
That is two months of property taxes and mortgage payments that you would not have to make.
At What Price Will You List My Property?
When you are interviewing prospective Realtors, you need to ask how much they think your property is worth. It is important to ask this question of every Realtor you interview. The Realtors may have similar numbers at to the value of your property, or they may be very different.
Do not discount a Realtor if they want to list your property far below what you think it is worth. This is their profession and they may have intimate market knowledge which you do not have. The Realtor may have come to their conclusion because they specialize in selling your type of property or because they have pulled recent sale prices of comparable properties in the area.
A Realtor could also be completely mistaken at to the price at which they want to list your property.
This could be due to lack of research or simply lack of knowledge about selling your specific type of investment property.
How Will You Market the Property?
You should ask each Realtor how they intend to market your property. Are they going to place one time ads on a couple of sites and hope buyers fall into their lap or are they going to be more proactive in their approach? Will the Realtor conduct open houses or will they do private showings?
You also need to discuss selling options with your Realtor, such as placing your property on auction websites like Auction.com. You have to be comfortable with the Realtor’s marketing approach before you agree to give them the listing.
Can You Provide Referrals?
Lastly, you will want to ask the Realtor if they can provide referrals for clients for whom they have sold property. Were the past clients satisfied with the Realtor’s professionalism, knowledge, effort and results?
It may also be helpful to contact a client whose listing the Realtor was not able to sell. Hearing potential negatives about the Realtor can help you have a more rounded view of their skills and abilities.