host posted on February 02, 2009 00:27
Working With Realtors
Why You Need A Realtor
• Realtors have access to the Multiple Listing Service (MLS), the largest source of homes for sale
• They can give you “comps” and good advise on the market value of the properties you are looking at
• They can give you information and a feel for an area or neighborhood that you may not be familiar with
• MOST IMPORTANTLY, Realtors will save you a ton of time! In real estate, as in any other business, time is money. Realtors will find you great properties, present your offers, drive back and forth negotiating your offers, drop the signed contract off at your lawyer’s office, and after it closes, bring you the keys to the property. This enables you to dedicate your time elsewhere – such as finding more joint venture money!!!
Why A Realtor Needs You
• You can literally double their income. My deals probably represent 75% of one realtor’s income and nearly 50% of another.
• They make their commissions knowing it’s not a one-time deal. They know you will buy as many good deals as they can bring you.
• You are buying based on numbers, not emotion, so you can view properties with them in one quarter (or less) time as they spend with personal home buyers. Time is money for realtors also.
How To Find a Good Realtor
Sometimes finding the perfect Real Estate Realtor can take a bit of time, but when you find one, they will be worth their weight in gold.
The best way to find and choose a qualified, reputable Realtor is to conduct subtle but effective interviews in person. All you have to do is simply find properties you may be interested in that are for sale in your local real estate newspaper, contact the listing Realtors by phone, and meet them at the property. Open houses are also an ideal place to meet Realtors.
Your conversation with the Realtor should be designed to find out how effective he might be. If the Realtor applies too much pressure during the conversation, you may be tempted to eliminate him. If his behavior is the opposite and he has a too-relaxed attitude and is complacent, you may also be tempted to eliminate him. You don’t want someone who will attempt to close on every possible deal, nor do you want an agent who is too lazy to seek out as many opportunities as possible. You want enthusiasm, along with competence and consideration.
Expect an attempt from almost every Realtor to recruit you as a prospect. Try to ward these off to the best that you can while you are conducting your interview. If many attempts are made, all tactful and polite, carry on; it’s a good sign.
Keep in mind that a rookie realtor can also be a good bet. If you find a well trained, enthusiastic, and determined individual, you just may receive first-class and highly effective service. There are, after all, many experienced Realtors who have twenty or more years experience but have never really succeeded. They make less-than-average incomes because they provide less-than-average service.
I like to find Realtors that know the market, are creative, are willing to learn and try new things, have an attractive personality, are enthusiastic & tactfully aggressive, do what they say they are going to do, follow up in a timely manner, and must be excited about working with an investor (some realtors do not like investors, that’s okay if they don’t, “next”).
I see many new investors ask other investors they network with for the name of their best Realtor. I find this a waste of time. If I was to give you the names of the Realtors I use, they may call you on a deal, but only AFTER they presented it to me (meaning I rejected it). So if I walked away from it, do you really think it is something you should buy? Find your own Realtor who will bring YOU the deals FIRST.
Taking responsibility for the selection of your own Realtor will provide you with more control over the buying process. First, you’ve taken charge of the process right from the beginning. Second, since you “hired” the Realtor who will find you your next great investment property, you may also “fire” them if the job is not being performed to your satisfaction.
Once you start working with a Realtor, specify (in your mind) a set amount of time you’ll allow them to produce good leads. If they haven’t produced the leads in the amount of time you allotted, do not waste any more time with him. He should be putting forth the extra effort to mine other sources of properties. For example, when the MLS system does not generate a list of properties that fit your requirements, does he look further? For example, does he sift through expired listings, does he check into exclusive listings from other Realtors or real estate offices, etc.
Once you find a Realtor you are excited to do business with, work hard to build the relationship…….
How To Build a Good Relationship With Your Realtor
• Let them know very clearly what you are looking for. For example, I tell my realtors that I am looking for any property with an assumable mortgage that requires less than 15% of the value of the property in cash and the potential rent must cover principle, interest, tax, insurance, and property management. Many times you will have to educate the realtor over time on what different properties will rent for, what your management costs are (if any), etc.
• If your Realtor finds a property that fits your criteria – BUY IT. If he is going to provide you with first-class service, invest hours and hours of his time inspecting properties, then weeks showing his findings to you, he surely deserves the sale. If loyalty is to be earned, it must also be rewarded. If you are not ready to buy, tell him. Remember, this is how he makes a living and how he supports his family. Do not waste his time!
• Always be fair, honest, and upfront. For example, if you run out of cash to buy more properties – tell him; if you work with another Realtor(s) - tell him; do not misguide him with under-estimated rents or expenses just to get a better deal; etc. After all, you want them to be honest with you too.
• Do not ask your Realtor to cut his commission on a deal. I bet you would not like it if your boss asked you to cut your salary in half for a month. There have been times when my Realtors have cut their commission to put a deal together for me that otherwise would not have worked, buy THEY chose to (I did not ask). Plus they know I will buy many more. Remember, the more money you make your Realtor, the more loyalty you will earn, and the more motivated they will be to find you the next deal. Do not ruin a relationship over a few thousand dollars – that would be “stepping over dollars to get to dimes”.
• Show up on time. Be on time for appointments and viewings
• Always say “please” and “thank you”. Thank them when they find and negotiate you a great deal. Continually thank them for their hard work. Say “please” and “thank you” when you ask for favors such a pulling comps for you. Reward them with any home buyer leads you can provide them.
• Have fun together. Laugh, joke around, go out socially together from time to time, get to know each other’s families, etc. You will most likely spend a lot of time with your Realtor, it might as well be enjoyable for both of you.