“Real Estate Developer related Frequently Asked Questions by expert members with professional career as Real Estate Developer. These list of interview questions and answers will help you strengthen your technical skills, prepare for the new job interview and quickly revise your concepts”
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.
☛ 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?
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.
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.
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.
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.
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.
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.
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.
• 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?
☛ 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?
☛ 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?
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.
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.
☛ 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?
☛ 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?
☛ 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?
☛ 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?
☛ 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?
☛ 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)
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