Working with a real estate agent that understands your investment goals can assist you in finding the best opportunities. Agents can help take a lot of work off your plate as well, which allows you to focus on making more money - just remember that the relationship needs to be beneficial for both parties. See the following article from REIClub for more on this.
One of the most critical steps for a new investor is finding a competent real estate agent who understands your needs as an investor and will work hard for you. This article attempts to address that need.
Understanding the Agent
In most cases, you will have to train a Realtor to work for you. Real estate agents are generally good at what they do, but most of them do not deal with investors and our methods are foreign to them. This does not make them bad people, nor does it make them stupid. Typically, an agent makes more money dealing with pretty houses and people with good credit, so this is the area where they become experts. If you can find an open-minded agent and teach them about what you do, then you can put together a mutually beneficial relationship. But first you have to respect the agent's perspective.
An agent gets their license and starts selling real estate to make a living. They aren't doing it for charity. They only get paid if someone buys a home and settles on it. A lot of work goes into a putting a deal together. Agents have been burned time and time again by investors who do not produce. Many so-called investors have real estate agents scour through listings, make appointments to see houses, show them around town, get them back into houses a second time, and never make an offer. Many investors who do make offers produce offers which are so ridiculous that if the agent knew this up front, then they probably would have never agreed to work with the investor. Then there are investors who get offers accepted but never settle on the deal. So the agent, who has about 30-40 hours worth of work into a transaction, will never get paid for their time. How many of you would want to go to work for a week and then not get paid?
What to Expect from Your Agent
You need to recognize the fact that you are going to be looking at many houses and buying few. You don't need the agent to drive you all around town, pull up comps on every house you are going to see, or present offers on which you can't follow through. This is a waste of their time and yours. The only thing that I expect from my agents is to provide me with listings and submit my offers. Occasionally I will ask them to show me a home or pull comps for me if I can't find anything on my own. With few exceptions, you need nothing from your agent but for them to give you listings and submit your offers.
How to Find an Agent
When interviewing Realtors, you need to have a good idea of what you expect from them so that you can explain to them exactly what you need. They need to know exactly w... |
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