5 Questions to Ask Your Real Estate Broker Up Front

Hiring a real estate broker to assist you in one of the most important sales/purchases of your life may seem like a daunting task.  Today we'll make it easier for you by highlighting the 5 questions you need to ask your real estate broker upfront, according to real estate pro Bennie Waller.  Mr. Waller has held a long and distinguished career in real estate investment and real estate sales, and is currently the department chair of finance and real estate at Longwood University. 

1.  How long has a property been on the market?

The longer a property has been on the market, the more willing the seller is to negotiate.  For a buyer, this means that your broker should advocate for aggressive negotiation in this instance.  If you are the seller whose property has been on the market for an extended amount of time, then your broker should prepare you for these aggressive negotiation tactics by potential buyers - and provide supporting market data to maintain your list price.

2.  Is the owner a licensed real estate professional?

If the answer is "yes," then as a buyer, your broker should warn you that you may have less negotiating power since the owner has a deeper understanding of the real estate market and is less likely to negotiate.  As the seller (and real estate professional in this case), you should do your own research on the market, or call local appraisers or bankers, in addition to seeking advice from your own broker.

3. Is the property vacant?

For a buyer, your broker should tell you that a vacant property offers him/her more negotiating power.  Because the owner/seller isn't getting any income or use out of the property (and it is in fact draining his/her wallet with monthly payments/interest), the seller is more likely to want to unload the property and more willing to negotiate.

4. What is the original listing price?  How many times has the price changed since the property was originally listed?

If a property has been repeatedly reduced in price, then for a prospective buyer, this signifies a seller may negotiate even further.  Your broker should tell you this and advocate for a more aggressive approach to negotiation.  For a seller, your broker should warn you of these tactics and assist you maintaining the listing price rather than giving in to bargaining tactics.

5.  What should you watch for in terms of dual agency representation?

Dual agency representation is the situation that arises when a broker represents both the seller and the buyer in the same transaction.  Since the broker will most likely receive a commission from the seller, the buyer here must be careful and is encouraged to obtain outside legal assistance or consultation that would ensure that the buyer is informed that his/her broker is not exclusively representing the buyer's interests alone.  In this situation, with informed written consent, the broker is lawfully representing both the seller's and buyer's interests in the sale of a property.  The broker still has many of the same duties to uphold as a real estate professional (duty of care, accounting, and obedience for example), but his/her loyalty is not exclusive to either party.

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