As I mentioned in my last posting, in my experiences you will probably contact between 25 and 50 agents in a given area in order to find from 1 to 3 agents who are really top-rate.
What you are looking for in an agent are the following:
They Must be Comfortable and Capable Dealing With Investors
They must understand and be comfortable with investor mentality. That means they must be comfortable making assertively-priced offers and/or asking for creative terms. Do they regularly work with investors? Are they an investor themselves? Ask them questions to that effect. Ask them pointed questions that would elicit investor-oriented knowledge (such as about owner financing). If they want to send you immediately to a mortgage officer to get you qualified, they just identified themselves as a non-candidate.
They Should be oriented towards buyers and not sellers.
A selling oriented agent will not fully grasp the needs of a complex investor-buyer. Investors seek either concessions on price and/or terms. A typical selling agent is focused on getting top retail dollar...in most cases to the exclusion of everything else. However, every once in a while, you come across an agent that understands what investors need. More important, they are comfortable with it and are willing to present and negotiate creative offers.
They do What They Say They Will Do
Do the agents you interact with do what they say they will do? If you give them criteria for emailed listings, do you get them…that day? Do they check on the deal which you inquired about?
They Scout Deals
A good agent will follow up with potential candidates beyond what is merely automatically filtered through the MLS. In other words, they seek out and scout deals for you. They initiate calls about properties instead of waiting for you to inquire about something.
They Are Customer-Oriented as Opposed to Sales-Oriented
Do they have a customer-serving mentality, or are they trying to sell you on something? If discussion about that agency agreement comes up before anything else, they are either inexperienced, brainwashed into the proscribed procedures, or more interested in themselves.
They Are Patient
Investors need to have the numbers work, either on price, terms, or both. Yes, we make nutty deals, but the right kind of agent will understand that. So, a good agent understands that you may need to filter through 100 deals to find one nugget worth pursuing. If they stop communicating with you after two weeks simply because you haven’t bought anything means they are not the kind of agent you need.
They Are Well Connected
Get a sense of who they know. See if they have contacts with investor-oriented mortgage brokers, title company, contractors and so forth.
They Are Not Legalistic
They shouldn’t be hung up on the letter of the law as far as the industry goes. Many are schooled to the point of no longer being able to think for themselves. I was licensed in two states at one time, and most agents really don’t know or understand their legal obligations. For example, a seller’s agent’s fiduciary responsibility to their client doesn’t mean they shouldn’t answer your candid questions. If they feel you are asking something that could hurt negotiations for their client, they should check with them to see if the client is willing to answer; not reject you question under licensure laws. Some agents seem to feel it’s their responsibility to play para-lawyer and be a roadblock to transactions. By way of another example, a war-zone is a war-zone, and an agent isn’t violating any fair housing laws by pointing that out – as opposed to keeping tight-mouthed and merely referring you to the police department for you to independently digging up that information. Guess what…if the police can disseminate that information it’s public knowledge and not a fair housing violation!
Additional Thoughts
Be wary of agents you find on sites like rehablist.com who appear to have dozens of investor-oriented listings. It may sound ideal, but generally isn’t. These are typically agents who farm the MLS for interesting looking deals – the listings are not theirs, they don’t know the properties, and most don’t want to expend any energy knowing them. They hope for a quick-flip speculator type who will buy without doing their due diligence, sight-unseen as if the house was no different than a stock or bond. Moreover, most, if not all, fail to do what they say they will do. They are all about marketing, and little about action.
Now, you as a potential buyer have some responsibilities.
Don't Be A User
Keep in mind that you don’t want to be a user of people. Agents, like anyone else, need to earn a living, and they do so on commission. While you need to be assertive and choosy as to who you work with, you don’t want to abuse your workings with people. With that in mind, you:
Don't Be a Lookie-Loo
Need to be a buyer. Nobody – not even the best agent – will work with you indefinitely. If you are a lookie-loo, don’t waste agent’s time. Use the Internet instead. You should have a clear criteria in mind that you can supply to the agent – price, number of bedrooms, style, situational indicators like foreclosures if that interests you, etc. Have them help you with locational issues if you don’t yet know the area. What you can’t do is say, “just dig me up anything that I can buy for 40% under value.” That’s the sign of an amateur investor and a red flag you are a waste of their time.
Do what you can on your end
Filter through listings to find what appears to be of value. Don’t ask the agent to drive to 25 properties if you are just curious. Prequalify deals, do your own drive-by’s if you can….in short, you put in as much legwork on your side before you ask an agent to spend time, gas, and energy viewing a property.
Be loyal
When you find a good agent, stick with them and send all your business their way. The more they sense your loyalty, the more they’ll work on your behalf.
Be appreciative – send a $10 Starbucks card every once in a while to that agent who’s spent 25 hours with you. It’s the least you can do! That goes a long way to building two-way loyalty.
Don’t be too quick to establish allegiance
Just because you know them and have had a few phone calls doesn’t mean you owe an agent anything. They have to live up on their end just as you do on yours. Even the process of sending listings is not enough – any agent can do that. They should be regularly contacting you, getting updates, checking to see if there’s anything they can do, etc.
When you find that worth-their-weight-in-gold agent, you use them exclusively. That’s the point when you switch from calling all the listings in town to telling your preferred agent what interests you and having them follow up. All you need is an MLS number and they can find out all you need. Make sure if you do talk to another agent, or a builder that you let them know you have an agent you work with. You don’t want to inadvertently cut your agent out of a deal – and believe me, the industry is such that they will try to cut them out in an instant because it means more money.
There are many rewards for building this kind of loyalty – and this is where it gets exciting.
When you build rapport with an agent they get to know your values – they are your eyes and ears when you are not located there. I’ve literally bought properties, that I didn’t personally visit, with full confidence, by relying on my agent and the tradespeople she/he used.
Real estate agencies often have what are called “pocket listings” that don’t appear on the MLS, and that means reduced competition - and they can send these your way.
They will hand-hold you through the transaction. That may seem like something only a newbie needs, but if you are newly investing in a geographic area, that kind of help can be invaluable in understanding local/state laws, customs and such. That means you can get great council on what vendors – like title companies or inspectors to use, how certain aspects of title work and taxes work, and what to be watchful of that might be unique to the area. Just recently, I had an agent in Arizona introduce me to roof rats and the hazards related to them when fruit trees are too close to a house.
They can hook you up with recommended vendors – title companies, mortgage companies, inspectors, manual tradespeople and so forth. If you are new to that market, getting first-hand testimonial can save you a lot of time, and help you avoid mistakes when selecting vendors. And, if the agency has clout, they can get often get you trade discounts.
That’s a lot to consider – if you have any questions or if you didn’t catch something, email me at
william@thecoasttocoastinvestor.com and I will be happy to clarify anything.
If you know of anyone who is interested in real estate investing, whether beginner or otherwise, please tell them about the blog. In addition, if you or an associate would like to access my audio podcast, just contact me at william@thecoasttocoastinvestor.com so I can include them in my mailing, and let them know of upcoming episodes and the other resources I have available.
I continue to assemble these resources for real estate investors. Not only do I have the weekly audio show, but I've put together an audio discussion board for investors. Recently, I also built two social networking communities which are gaining a lot of attention - for all of you who like Facebook or Myspace, you'll love these!
It will be a fantastic spot for networking, learning, and getting to know other investors. Give me a shout by email or phone if you want details (614-886-8233 or william@thecoasttocoastinvestor.com)
Do you want to learn real estate investing...learn the ropes? How about having someone actually guide you through the process? I am going to open registration for the first session starting in November. It will be a full 12 weeks of hands-on, real world training. There's nothing like it on the market, and the best part is, unlike all the guru's stuff, you can actually afford it! I'll keep you posted, but feel free to call (614-886-8233) or email if you have questions:
william@thecoasttocoastinvestor.com
Finally, many of you are asking about mentoring and coaching, and that is a great way I can serve you. I have limited slots available to do that, so if you are interested, please give me a shout so I can discuss it with you...beginners welcome! This is a great chance to have someone hand-hold you during your investing activities and have access to an expert at your disposal as easily as making a phone call or sending an email. If you'd like to know more, feel free to call (614-886-8233) or email me: william@thecoasttocoastinvestor.com
So, until next week, I’m Bill Flood; this is the Coast to Coast Real Estate Investor…live your real estate dreams!
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