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What investors should look for in hiring an agent

Linda Baumgarten

As an investor, finding a good real estate agent can help find you a great deal on a property in your area. After all, the National Association of Realtors reported that 92% of houses sold in 2014 were by agents so they must be doing something right!

While it’s generally considered taboo for investors to deal with listing agents since they work in a more business-savvy mindset, not all of them are bad apples. In fact, if you find the perfect one to parlay with, it can turn into a beautiful, fortune-finding friendship!

What’s so great about working with agents, anyway?

Real estate agent and a couple behind her

It’s an amateur mistake for an investor to underestimate the usefulness of a real estate agent. Yes, there are many ways you can find listings just fine by yourself, but don’t forget that they have the upper hand in various ways:

  1. Agents can provide data on a particular area, sales trends, comps, rents, marketplace factors, flood zone changes, tax changes, historical pricing, if the property is being foreclosed, and if there are liens on the property.
  2. They come up with the foreclosure listings and short sales as they come on the Multiple Listing Service (MLS).
  3. Not just the MLS, there are also in-house opportunities, or “off-market” deals, that never even make it to the MLS.

Starting off with the MLS

So, what exactly is the Multiple Listing Service? The MLS is a proprietary computer system owned and controlled by the Board of Realtors and is used by licensed real estate agents and brokers who have to pay a fee to have access to the system. You want to build strong relationships with these agents so you can take advantage of it. I estimate that at least 30% of your deals will end up coming from the MLS.

The downside is that every listing can be found on the internet. This means there is more competition from other investors. You will find that you are competing with people who are looking for a home and who are willing to use some elbow grease if they can buy the house at a discount. Because they’re not looking to make a profit, they can pay more for the property than you can. This is basically why you should be working with off-market deals more often since that’s where your competitors won’t be so looking so often.

However, that’s exactly why you should be finding at least one agent to build some trust with: it’s their job to find and display all the latest listings, and if you build a trusting relationship with them, they will have your name first in mind when they find a dream of a deal. And, as we mentioned before, they could even have listings that don’t make it to the MLS!

The best questions to ask an agent to see if they’re right for you!

Just like with any profession, there are agents who are good… and ones who are not so much. But even if they are the best darn real estate agent in the world, they might be a complete mismatch for working with investors. So, what should you do to figure out which one of them is worth your time and effort? The answer is questions, questions, and more questions. Look into them and test how they react to enquiries. You don’t necessary have to go far enough to interrogate them to find out their life story, but there are some big blanks you need them to fill in for you if you want to know if you should sink or swim this relationship.

  1. “What’s your background like?” This is obviously a very broad question to ask, but there’s a nugget of information you need to get from it: whether or not they have experience with in developing projects.
  2. “Have you worked with an investor before?” Granted, it’s a simple yes/no kind of question, but it’s less about the answer itself than it is about how they answered it. You don’t have to duck and run if the first word they say is “no.” If they seem enthusiastic about the chance to work with you, hear them out. And if they say “yes” but seem a bit deflated or annoyed to even be asked, that might be a red flag.
  3. “How do you get most of your clients and listings?” This question is obviously about finding out how good they are at what they do, but the key thing here is to see if they also say about opportunities for off market properties. In other words, you get to see right off the bat if they’re skilled enough to get you an exclusive offer.
  4. “Are you selling [blank] kinds of properties at this time?” As an investor, you already should have a good idea what kinds of homes you want to be dealing in. Multi-family ones, foreclosures, etc. You need to make sure they also like

How should I be treating an agent to make sure they’ll help me out?

Agents can point you in the perfect direction for a fine rehab project or something else to hold onto, but you have to be making a relationship with them – not use them. They aren’t amateurs; they have knowledge, experience, and the invaluable insight to help you improve yourself as an investor. In fact, I know investors who keep in touch with agents for a long time for their advice and input – even hiring them as a consultant!

Their job is not just to find you a project, but to make sure that the transaction is handled with integrity. No one investment is ever worth getting yourself in trouble over, after all, and they have that ingrained in their heads. Here are some key things to keep in mind with building those relationships:

  • Remember that the real estate agents work hard for their commissions. Treat them with respect. If they are confident enough to show you a property, then it most likely is an offer you can’t refuse.
  • Let the agent know specifically what you are looking for so you’re not wasting your time. They’re more business-savvy than you are, so short-and-to-the-point is always their M.O. Be sure to have your funds lined up so you can fulfill your contract.
  • Ask the agent if they can send you automatic notices of properties that fit your criteria. Let them know your target area, size of house, amount of required renovation, and other critical house or apartment features. These listings will automatically show up in your email inbox. Give them one of your business cards so they will see you are looking for listings with these terms.
  • If they are new, that means they will be working extra hard scouting the MLS for properties that fit your criteria, so give them your full support to make sure once they go pro, they will always appreciate you being there for them and won’t forget you when the great deals start flowing in.

In conclusion

Despite what you might have heard, finding the perfect real estate agent who is willing to work with you and what you’re working for can be a godsend for your success.

They may work in a different field than you, but real estate is in their blood just as strong as it is in yours; and their unique skills can give you the edge on your competition. So long as you ask the right questions which will lead to finding the right agent, you’ll be wondering how you couldn’t be so successful without their help.

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