# Questions to ask a Realtor



## Steve Divi (Jul 14, 2016)

Hi,

I'm looking to buy and hold a rental property out of town. Is there a set standard of questions I should be asking the realtor?

My general questions are 

1) How is the roof and age
2) How is plumbing and electric
3) What would a place such as this rent for
4) How is the foundation
5) What type of work need to be done

I feel like this might not be their bailiwick.

What type of questions do you pros use?


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## Mukhang pera (Feb 26, 2016)

Steve Divi said:


> I feel like this might not be their bailiwick.


That would be my feeling. I might place some weight on a local realtor's opinion about potential rent. As for the other items you mention, if I could not rely on my own assessment, I would prefer to rely on a well-recommended home inspector. I say "well-recommended" because not all of those are created equal. I many places there is little or no regulation and anyone can set themselves up as a home inspector, without knowing a helluva lot.

Perhaps even better, in case of doubt, is to seek specialist opinion. Ask a plumber about the plumbing, etc.


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## Just a Guy (Mar 27, 2012)

My questions to a realtor are...

What's on the market in these specific areas (which I've already researched, so I know the area) for a price between $X and $Y with Z number of bedrooms (my price range varies with the number of bedrooms). 

I get them to send me the full MLS spec sheet, not the public one, so I can read the details for myself (age of building, seller's information, realtor notes, etc.). 

What is the sales history on this property?

What are comapareable properties selling for?

Maybe, do you have a good, inexpensive lawyer and mortgage rep you can recommend. 

Other than that, they aren't really qualified to answer any questions, they're salesmen. Never ask for anything other than facts.

I forgot, when can we go see it...from there I can look at the roof, the plumbing, the electric, the foundation, and the work that needs to be done...

As for what do places rent for in the area, I'd better know that going in as it determines my price.


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## Prospector (Jul 25, 2014)

Oh boy... take a step back and do some research. By out of town, do you mean across the province, across the country, or across the county?

Buying sight unseen I cannot speak to, but from the experience of buying out of town, I always want to at least do a walk-thru of a house. You can fly anywhere for about $400 - $600 now, and thats a cheap add-on to your closing costs. 

If you are sure about this place, I would start by pulling up the OREA (or similar) reports for the city you are looking at. The real estate report will show vacancy rates, average rents, days on market, number of sales, etc. My buying agent sends these to me monthly in an automated email, but he knows I'm always looking in "his-town". 

Next I would go on Kijiji and pull up the first 40 or so ads for similar properties. From those take an average rent, a 85th percentile rent, and a 75th percentile rent. A shitty property will rent at or for less than the average. An excellent one will rent at the 85th percentile. An average property will be at the 75th percentile. Remember that overpriced and shitty properties hang around on Kijiji while good places get scooped up in a hurry. Your results will be left and right skewed.

Now that you know how much demand there is (from the OREA report) and how much current rents are (Kijiji) you can consider the budget on the property you want to buy. Plug the cost of basic improvements into a calculator like Ratehub with a HELOC at the current rate and see how much of a bite your average repairs will cost. knowing how much of an improvement budget you have allows you turn this thing on its head and pose the question to yourself differently.

Would I live in this house if $XX,XXX in improvements were done to it? Would I pay the rent in line 1 of the spreadsheet? How would that compare to the other apartments on Kijiji. If the answer is no, you need to reconsider the improvement budget. If the no answer if off by an order of magnitude, walk away from the house.


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## mikep (Mar 13, 2017)

ask the realtor if he has investment properties. if the answer is no find a realtor who does.


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## nobleea (Oct 11, 2013)

6) how can you justify the commissions you get?

Seriously though, realtors are salespeople. They'll tell you generally what you want to hear. If you ask about the plumbing, they'll say "I don't know", which either means, I don't know, or it means, I know, it's not good, but if I tell you, you won't buy it.

They can get factual answers from the seller, such as when was the furnace installed/replaced. Same for HWT, roof, windows, etc.


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## kcowan (Jul 1, 2010)

When we were moving to the GTA, we found a house in a neighborhood that we liked. It was a standard 2-story with 2-car attached garage but it was 3-stories with a walkout basement at the back overlooking a forest. We asked about the future of the forest and were told it was green belt. So we checked independently and discovered it was a hydro right of way. So we took a pass.

5 years later there was a huge grid-like tower directly behind that house and all the trees had been cleared. We figure we saved $100k by not believing the realtor.


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## Just a Guy (Mar 27, 2012)

mikep said:


> ask the realtor if he has investment properties. if the answer is no find a realtor who does.


Funny thing about realtors, I know a bunch who went broke because they bought "investment" properties. They didn't know how to pick one any better than a novice, in fact many seem to be worse because they are stuck right in the middle of all the "hype"

Not to say there aren't successful realtor investors, there are, but them being in the industry doesn't make them smart. They can get cut trying to catch a falling knife just like anyone else.


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## Mortgage u/w (Feb 6, 2014)

You'll want to ask for comparables that sold in the last 6 months. Other than that, you could only rely on asking them to book a visit. 

For the rest, you will need to do some research of your own. If you are not too familiar with construction, seek a reputable and highly recommended home inspector - do not take recommendations from the realtor.


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## nobleea (Oct 11, 2013)

Somewhat OT, but a good question to ask would be
How can you justify your commissions when they account for 2% of the GDP?? *More than agriculture, forestry and fishing.*
That's an accurate value from stats can. Includes legal fees and home inspection, surveying, etc. But the vast majority of it is realtor fees.

http://www.cbc.ca/news/business/real-estate-fees-home-sales-1.4226630


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## mortgagebroker (Aug 8, 2017)

Steve Divi said:


> Hi,
> 
> I'm looking to buy and hold a rental property out of town. Is there a set standard of questions I should be asking the realtor?
> 
> ...


All these are important questions. As an investor, one thing I can't stress enough is that everyone on your team (especially your Realtor & Mortgage Broker) need to own investment properties. If the realtor you're working with doesn't have rental properties in that area I'd work with one who does. So that would be the most important question.

In terms of how much things would rent for don't rely on their answers, check kijiji, find an investor in that area who'd be willing to chat with you. 

What city are you looking in anyways? Maybe someone here can help.


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## rakianam (Aug 10, 2017)

Steve Divi said:


> Hi,
> 
> I'm looking to buy and hold a rental property out of town. Is there a set standard of questions I should be asking the realtor?
> 
> ...


I would try to find answer to the following before I give an offer. 

How old is the house? 

How much is the insurance? Was there any insurance claim? 

How much is electricity bill in last one year? 

How much is the utility bill? 

How much is the tax bill? 

What type of electrical system? 

What type of plumbing system? 

What is the type of foundation?

When was the roof done?

How old are the windows?

What type of water heater? Is it rented? 

Is there any water softener? 

Is there any security system?

Was it used as a rental property or owner occupied?


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## Just a Guy (Mar 27, 2012)

Insurance depends on the company you get.
Utilities depends on usage. 
The taxes will change with the sale price most likely.

The plumbing, electric, foundation, roof, windows, water heater and softener you should notice on your walk through...I wouldn't trust a realtor, or even a house inspector on those (I once knew a house inspector who couldn't tell copper wire from aluminum, he guessed aluminum from the year the house was built even though you could clearly see it was copper if you'd bothered to look). 

Windows have their year built stamped into the glass (unless they are very old, but those are obvious). 

Finally age of the house is on the listing sheet, so you don't really need a realtor for any of those questions unless you want to see if they try to lie to you...which, in itself, is a very good reason to ask all those questions.


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## lonewolf :) (Sep 13, 2016)

Steve if possible you want to use a buy only realtor that is not part of a franchise that represents both buyer & seller. So there is no conflict of interest. Almost impossible to find & some say they are buy only & they are not telling the truth. They are out there though.

I listen to Howe street web site on internet & there is a realtor that comes on site regularly & talks about real estate in Canada & can set you up with buy only realtor in a lot of areas though I forget his name. You would have to do some research


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## ian (Jun 18, 2016)

Double check for grow ops. Big issue that impacted a colleague of mine. Rented one of his homes out to some nice folks who always paid the rent on time. Fourteen months later the RCMP were in touch with him.


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## qwertyjjj (Oct 5, 2017)

Steve Divi said:


> Hi,
> 
> I'm looking to buy and hold a rental property out of town. Is there a set standard of questions I should be asking the realtor?
> 
> ...


How about, why are the commission rates so high for doing so little work? 

They won't know the exact answers on the state of the property only a guide if it was disclosed by the seller already. Failing that you have to see yourself or get an inspection...


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