1. Tell me what forms of training and continuing education do you provide?
Real estate agents, both seasoned and new, need consistent training and continuing education to stay up to date with the current laws and best practices in the industry.
Mentorship programs coupled with an extensive new agent training series is the best way to provide a well-rounded education.
Mentors can teach new agents real-world scenarios including the do's and don'ts of the industry. The legal minefield is ever-changing, and agents need to understand the best practices, including training, to keep mistakes minimal and litigation at bay.
2. Tell me do you provide an independent contractor agreement?
Independent contractor agreements are crucial. Make sure it's in writing, and read the entire agreement before signing it. If necessary, seek legal counsel to ensure your bargaining power is nearly equal in strength and your interests are protected.
There's a lot to consider when looking for a brokerage. These questions will help you find the brokerage that best fits your needs.
3. Explain me what are the differences between investing in real estate and stocks?
If you invest in real estate, you are actually purchasing a tangible, physical land or property. Investing in stocks is entirely different; if you purchase shares of a business, you are buying a claim to a piece of the company itself.
The risks associated with each investment type differ. When you own real estate, you incur maintenance costs, capital costs, taxes and maybe development costs each month. That said, the values of physical assets are less likely to become worthless than stocks.
4. Explain me what you did in your last position that helped your company find value?
This goes to the very core of what it means to work for a private equity firm. You should be able to walk into an interview with four to five solid examples of how your actions directly saved your previous employers money. This could be from developing operational efficiencies to ferreting out information that helped save money on a M&A deal. Maybe your research helped a company develop a new product line, or your ideas spurred cost savings on benefits. Whatever it is, be prepared to talk frankly and in detail about how you are an agent of value creation.
5. Tell me is the market for mega-cap M&A/LBO deals done?
Another question having to do with your knowledge of current events. There was a point when the industry seemed to be poised for that $100 billion LBO deal. That may no longer be the case, at least over the next few years. Do your homework, read up on everything you can, and talk to contacts in the industry. Get a feel for the trends within private equity, and be able to talk intelligently about them.
Another hypothetical, with “company Y” likely a company in the news lately for various and sundry problems. If it's a company with too much debt and not enough upside, feel free to say you wouldn't take it. If it's a company with a decent balance sheet and some operational problems, then talk about what you'd do. Ultimately, you'd have to be up on the news to consider whether there's an opportunity to create value within the framework of an acquisition.
7. Explain me what costs will I incur?
Building a new business is difficult. Understanding what costs are involved when working under a broker is essential to the viability of your business.
One of the most important elements of the cost structure is the errors and omissions insurance; you want to purchase the proper insurance to protect your assets while maximizing your capital output.
Understand the coverage provided by the brokerage and what further steps are needed to keep your business protected and safe.
8. Tell me what are the commission splits?
This is your business, and you need to know how much cash you will make on a sale. After all, you only eat what you kill in this business; there are no paychecks and no free rides.
Commission splits need to be reasonable and within an industry standard. Know what commission splits other brokers offer as well.
9. Tell me what Is the Biggest Deal You Have Conducted?
The scope of the deal is the biggest differentiator between residential and commercial real estate. A $1 million transaction is considered a whale for a residential agent. Commercial real estate agents, by contrast, regularly broker transactions in the tens of millions. Presiding over deals this large requires almost a preternatural level of confidence and calm under pressure. Anyone can claim to possess these traits, but a proven track record of closing big deals provides proof you have what it takes to get it done.
Experienced agents should have no problem with this question. If you are newly trying to break into the business, you can still create a positive impression with your answer. Rather than evading the question, acknowledge that you are new to the field and have yet to close a big real estate deal. Next, highlight a big transaction you closed at a previous sales job or a major project you oversaw to completion that required a cool head under pressure.
10. Tell me what are you most proud of in your career to date?
This is another opportunity to talk about things you've done to help create value. It can be an investment you identified or a trend you spotted, or any of the things mentioned above. But make it a good one, and make it relevant to the private equity firm's goals.
11. Sample Real Estate Developer Job Interview Questions:
☛ What is your plan to attract new clients to this office?
☛ Have you ever refused to work with a buyer?
☛ Who was the most demanding client you have worked with? Were you able to meet his/hers needs?
☛ What was the last CE course you completed?
☛ This agency will not provide any money toward your advertising costs. What are your advertising budget and plan?
☛ What's your CRM style for maintaining strong relationships with your past and current clients?
☛ Has a broker ever asked you to remove your license from their office?
☛ How would you attract millennial buyers to this agency?
☛ Describe your experience with using the MLS.
☛ Do you have experience getting clients through social media?
☛ Describe your network in the community. What is your plan to make it even stronger?
☛ Have you ever worked with another agent (for the buyer or seller) on a deal and been asked to do something you knew to be unethical? How did you handle it?
☛ Describe your ideal office environment. Do you need a lot of support and resources from a broker?
☛ How many homes did you sell last year?
☛ Why did you choose a career in real estate?
☛ What is your experience working with first-time home buyers? What are some of the biggest challenges involved?
☛ If you don't make a sale for 6 months, do you have a plan in place to get by until then?
☛ Are you familiar with client management software programs?
☛ How many listings did you bring in last year?
☛ What steps have you taken to increase your personal brand awareness?
☛ What would your last broker say about you?
☛ For the sales you made last year, what was the average number of days between getting the listing and an accepted offer?
12. Brokerage Services to Its Real Estate Professionals Interview Questions:
☛ What technologies does the brokerage offer and what is the cost to use them?
☛ What is the timeframe in which for commissions are paid to professionals?
☛ Does the brokerage pay commissions by cheque or direct deposit?
☛ What signs are available and what is their cost (i.e. for sale signs, open house signs, sign installation)?
☛ Does the brokerage provide real estate forms? If so, what is their cost?
☛ Does the brokerage provide materials for listing presentations and property listings?
☛ Does the brokerage provide materials for working with buyers?
☛ Does the brokerage provide access to client meeting rooms?
☛ Is the brokerage part of a real estate referral network?
☛ If yes, how are network referrals disseminated at the brokerage?
☛ If yes, do new real estate professionals receive network referrals?
☛ If yes, is there a cost to receiving a referral from the brokerage?
☛ Does the brokerage work with relocation companies?
☛ If yes, how are relocation referrals disseminated at the brokerage?
☛ If yes, do new real estate professionals receive relocation referrals?
☛ If yes, is there a cost to receiving a relocation referral from the brokerage?
☛ Does the brokerage have an on-duty system to handle general inquiries (i.e. walk-ins, call-ins, online inquiries)?
☛ If yes, what is the likelihood of new professionals getting clients this way?
☛ What marketing materials are available for professionals (i.e. pre-designed brochures, folders, moving tip sheets)?
☛ If so, is there a cost for brokerage provided marketing materials?
13. Top Real Estate Developer Job Interview Questions:
• What first sparked your interest in real estate?
• Tell my why you are passionate about working in the real estate industry.
• What skills have you learned in your MSREI program at Johns Hopkins that will help you in the field?
• What is your competitive advantage to the field of real estate?
• What trends do see in local real estate? In real estate globally?
• Why do you believe the real estate industry is relationship centric?
• What does the infrastructure part of your degree entail?
• What types of finance courses have you taken in your program?
• Tell me about your experience with working in teams. What made it positive or negative?
• Tell me about a time that you faced adversity in your workplace. How did you overcome?
• Tell me about a time that you had to negotiate with a colleague, manager, or client. What was the result?
• What do you know about “equity” and “debt?”
• Explain the relationship between “IRR”, “NPV” and the “discount rate.” (The right answer is “When IRR is equal to the discount rate, NPV is zero.”)
• Talk to me about the relationship and differences of Property Management and Asset Management.
• How do you use a Cap Rate?
• Tell me what you know about “Real Estate Cycles”.
• Tell me about a construction or development project where you have played a significant role. what was the result?
• How would you describe your style of leadership? How is this influential to the real estate industry?
• How are you involved in the community? How would your involvement add value to this company?
• How do you maintain balance and order under pressure?
• You are told by a supervisor to misrepresent information about a deal you are working on. What do you do? How do you respond?
• What professional real estate associations are you active in and how do you contribute?
• What areas or trends do you see most influencing the future of the real estate industry?
14. Brokerages Preferred Area(s) of Practice Interview Questions:
☛ In which area(s) of real estate does the brokerage usually practice (i.e. residential, commercial, rural, property management)?
☛ What are the brokerage's preferred practice area(s)?
☛ Does the brokerage prohibit practice in one or more real estate areas?
☛ What expertise does the broker/delegates have in the brokerage's practice area(s)?
☛ In what geographic location does the brokerage operate?
15. Professional Real Estate Developer Interview Questions:
☛ Does the brokerage have systems to support its new professionals 24/7/365?
☛ Are there any costs associated with brokerage training or support?
☛ Who at the brokerage offers training and support to its new professionals?
☛ What training and support is offered to new real estate professionals? (i.e. review listing presentation, help draft contracts or conditions)?
☛ Does broker/delegate review service agreements and trade documents while the transaction is taking place?
☛ Is there a limit to the number of times or hours available for support?
☛ Does the brokerage have automated oversight processes to prevent errors?
☛ Does the broker/delegate explain incorrect or incomplete documentation?
☛ Does the brokerage provide marketing training opportunities?
☛ Does the brokerage provide an in-brokerage marketing material designer?
☛ Does the brokerage have a mentorship program?
☛ If yes, is there a special program to be followed? (details)
☛ If yes, who are the mentors?
☛ If yes, what is the cost to the professional being mentored?
☛ If yes, how are the mentors compensated?
☛ If yes, when is the mentorship program completed?
☛ If yes, what happens if the professional and the mentor don't get along?
16. Brokerage Culture and Health Job Interview Questions:
☛ How long has the brokerage been in business?
☛ How many professionals does the brokerage have working for it?
☛ How does the brokerage communicate with its professionals (i.e. online, in person)?
☛ How many brokerage offices does the broker manage and where are they located?
☛ Does the broker/delegates also trade in real estate at the brokerage?
☛ Does the brokerage have comprehensive and clear policy and procedures manuals?
☛ Does the brokerage hold brokerage meetings?
☛ If yes, how often are brokerage meetings held?
☛ If yes, what are the usual meeting topics?
☛ If yes, is attendance at the meetings mandatory?
☛ If yes, where and how are meetings held (i.e. virtual, in person)?
☛ How does the brokerage use technology (i.e. websites, online forms, online leads)?
☛ What are the brokerage policies on its professional's personally trading in real estate (i.e. buying, selling, leasing properties)?
☛ How does the brokerage deal conflicts between its professionals?
☛ How does the brokerage deal with conflicts between professionals and clients?
17. Brokerage Preference of Professionals to Recruit Interview Questions:
☛ Which type of professional does the brokerage cater to?
☛ What percentage of its professionals have been in practice less than 3 years?
☛ What percentage of its professionals have been in practice between 3 and 5 years?
☛ What percentage of its professionals have been in practice more than 5 years?
☛ What is the broker/delegate ratio to its professionals?
18. Brokerage Compensation Packages Job Interview Questions:
☛ Does the brokerage enter into employment or independent contractor agreements?
☛ What compensation packages does the brokerage offer to professionals?
☛ What services are included in the brokerage fees or commission splits?
☛ Does the brokerage offer benefit programs?
☛ If yes, what does the brokerage offer?
☛ If yes, who pays the cost?
☛ Are there any fees in additional to the fees packages, compensation packages, or commission splits?
☛ Does the brokerage provide in-house advances on commissions?
☛ If yes what are the terms for in-house advances on commissions?
☛ What are the termination terms for the employment or independent contractor agreements?
☛ What happens with service agreements for clients recruited by the real estate professional?
☛ Does the brokerage have any restrictions regarding employment outside of the brokerage?
19. Brokerage Continuous Learning Opportunities Job Interview Questions:
☛ What types of continuous learning opportunities does the brokerage offer?
☛ What level of professional are continuous learning opportunities geared towards?
☛ How often are continuous learning opportunities offered?
☛ How is continuous learning delivered? (i.e. e-learning, video, classroom, webinar)
20. Brokerage Business Model Interview Questions:
☛ Is the brokerage part of a franchise system?
☛ If yes, how does being part of a franchise benefit its new professionals?
☛ If yes, do I have to pay franchise fees?
☛ How does the brokerage market its image and brand?
☛ Do the brokerage professionals pay for or contribute towards its marketing?
☛ If yes, what are the fees paid by the brokerage's real estate professionals?
☛ Does the brokerage practice designated agency or agency according to the common law?
21. Top 10 Real Estate Developer Job Interview Questions:
☛ If a project has zero NPV and the discount rate is 10%; what will be the IRR?
☛ What is the difference between rental yield and cap rate?
☛ What are the prevalent area measurement methodologies? Why should you use RICS and not BOMA?
☛ In mixed-use development how do you allocate the infra cost / land cost / service charge?
☛ In calculating project IRR should we consider financing cash flow?
☛ What is the impact of depreciation on the project IRR?
☛ What are the best / worst performing asset classes in the current market situation? Why one should invest in these assets or why not?
☛ Walk me through how you analyzed last project you worked on. This question may lead to many others. But it also gives you an opportunity to tell your story.
☛ How do you calculate the cost of equity?
☛ If you have to decide a project's merit on the basis of only one performance indicator, what indicator will you choose?
22. Explain me what's been the most disappointing thing you've experienced in your career so far?
This is a very nice way of asking if you've learned from your mistakes. Nobody's going to get it right all the time, and they're going to want to know how you deal with adversity. Now, if your actions directly resulted in torpedoing a billion-dollar M&A deal … perhaps you may not want to mention that! But be prepared to talk about a project or deal that didn't go as planned. Don't blame others too much, either. Take responsibility for your part and explain how you've changed your approach since. Send the message that you learned something from the experience.
You can expect at least one hypothetical question regarding your area of expertise during the interview, and probably another that has more focus and better elucidation than the one above. Know enough about the industry to mention a previous deal involving a similar situation and how you might handle things now.
24. Tell me what do you think this company does right, and what do you think we do wrong?
First off, a bit of a trick question here. The company doesn't do anything wrong, it simply has areas in which it can improve. That said, you should be knowledgeable enough about the company and its recent deals to talk intelligently about how the company operates. Play up its strengths, certainly, but don't be sycophantic. And don't pull any punches on ways it can improve, but again, don't be too negative.
25. Explain me what structure of business entity formation is typical?
Although most real estate agents operate as sole proprietors, it is not the best approach for lawsuit protection and tax reduction. The best business formation is an LLC to operate your business as an agent; your LLC will contract with the broker.
As a sole proprietor, the income is paid to you individually, and you will receive a 1099 - the worst way to take income. Many options minimize taxes with payments made to an LLC rather than payments made to you as a sole proprietor.
An LLC also protects your personal assets from lawsuits. G. Kent Mangelson, a certified financial planner at the American Society of Asset Protection, said an agent's total asset protection plan must consider three methods of protection: lawsuit protection, strategies for tax reduction and strategies for estate planning.
