Many first-time homebuyers (and sellers) can have a lot of questions about the real estate market, but might not also know what a REALTOR® does and how REALTORS® can assist in the buying and selling of homes. If you’re working with clients who are new to the real estate experience, or if you are a new REALTOR® yourself, here are 10 questions you can expect to answer frequently, and tips on how you might answer them.
1. What is a REALTOR®?
A REALTOR® is more than someone who works in real estate. A REALTOR® is a member of the National Association of Realtors. Make sure your clients know that as a NAR member you operate under a professional code of ethics that goes above and beyond what might be required of other real estate professionals. Let your client know about relevant certifications, and even offer a basic case study of a similar client you have successfully worked with in the past.
2. How much do you charge?
Though rates are typically negotiable, be forthcoming with your clients about your standard rate. It’s also important to remind them of the behind-the-scenes work you’ll do to assist in the sale. Don’t simply set a rate; let them know what they’re paying for.
3. Will I qualify for a mortgage?
Your clients are likely to expect that you’ll be the jack-of-all-trades when it comes to purchasing a home. Be prepared to answer financial questions, and try to give them an honest initial assessment of their financial standing based on the three C’s: credit, capacity, and collateral. You can also offer advice on credit scores and down payment options.
4. What kind of house can I afford?
Once you have a general sense of the kind of home your client is interested in, you can help provide a rough estimate of where they stand, and then further explain what lenders will look at based on payment and income. As a general rule, Fannie Mae and Freddie Mac set a cap on the percentage of income that can be applied to mortgage payments at 28%, and that they can likely anticipate a 5% down payment.
5. What separates you from other REALTORS®?
Remind your client about the strict code of ethics that NAR members operate under. You should also let your client know, if it’s to your benefit, how long you’ve been in the area, how well you know the local market, and how long you’ve been working in real estate. And perhaps most important of all, let your personality show. Choosing a REALTOR®, much like buying a home, is mostly a matter a feel and fit. Make your clients comfortable. For additional tips, here are 7 ways you can differentiate yourself and 19 ways to outshine the competition.
6. What will my interest rate be?
As a general rule of thumb you can tell your client that the higher their credit score, the lower their interest rate will be. A baseline score of 740 is a good starting point. If a lender sees that your client poses less risk, they’ll secure a better rate, hopefully near 4% fixed-rate over 30 years. Lower credit scores can expect to pay a higher rate of interest.
7. How will you market my home?
This is a great opportunity to show off your successful track record, as well as other properties you’re currently listing. Show them the quality of your online listings, explain your process and connections with other local real estate professionals, and encourage them to follow you on social media to keep an eye on the work you’re doing. When the seller feels informed they’ll have more patience.
8. Do your homes typically sell for close to the asking price?
As a listing REALTOR®, explain to your clients that your goal is to sell as close to the asking price as possible. When you’re working with clients on the purchasing side of the equation, be sure to point out that houses can not sell for more than the appraised value, so at least negotiations are opening on a level playing field.
9. What’s the best way to stay in contact with you?
Let your client know your hours of availability. Obviously, this will depend on your own personal work-life balance. Let them know whether you prefer email, phone, text or social media, and make it clear that you’re working on their case even when you’re not on a call with them.
10. What else do I need to know?
Most people who are new to the real estate market are so green that they don’t know what they don’t know. Be aware of this blind spot in their knowledge of the housing market and help guide them through the process. For example, your client might not know that a pre-approval letter is necessary to make an offer on a home. Help them secure a lender early on so that the home showing process gets off on the right foot. Keep it simple, while being careful not to talk down to them.