As both a real estate investor and a real estate broker associate, I would like to share with you the three questions that every real estate investor must ask when trying to find a good real estate agent to work with.
Before I get started, I wanted to state that I am a huge advocate of marketing to find motivated sellers and that I recognize that investors often must deal directly with sellers who do not have their properties listed in the multiple listing service. However, while not every real estate investor needs a real estate agent, having a great agent or broker on your team is a huge benefit. In fact, it is one of the things that we stress in the Learn To Be Rich investment simulator game.
So, without further delay, here are the 3 questions you must ask potential real estate agents or brokers to prescreen them for your team:
1. Do you invest in real estate yourself?
I know it sounds simple, but insisting on a real estate agent that has, at the very least, looked at real estate as an investment themselves is a paradigm shift from the typical way that people select their real estate agent. Once you make this an essential criterion, you can eliminate a huge pool of agents that will show you houses that you might consider living in, but that would never work as an investment.
2. Will you be analyzing the deals or just sending me a list of properties?
I refer out hundreds of referrals to real estate agents in over 50 US markets each month and I am appalled to discover how many agents only set up their clients to receive all the new houses that are under a certain price range, in a certain part of town, as an automated e-mail blast. I am guilty of it myself, but it is a very lazy approach to working with clients. Investors in particular want more than a list of available new houses. Busy investors, like me, want an agent who is not going to create more work for them but that will save them time by attempting to pre-select the properties that actually qualify as deals.
3. Are you comfortable making lots of offers – some of them not for full price?
To get offers accepted that make sense as investments, you need to make many offers. In most real estate markets that I look at, to make investment deals work you often need to offer less than what an appraisal says the house is worth. You need a real estate agent or broker that is willing and able to make lots of offers and that has thick enough skin to make below asking price offers. Cairnhill 16