Having a quality realtor on your side is critical in the game called real estate. With this said it is important to note the word 'Quality'. How do you define a quality realtor? How do you find one? How do you maximize that relationship?
The answers are all held in this special report. In this report you will discover, in a very succinct fashion, the answers to the following questions:
- Why You Need A Quality Realtor On Your Team
- Why a Realtor Needs You - And How You Can Help Them
- How To Find A Quality Realtor
- How To Build A Good Relationship With Your Realtor
Once you understand these 4 critical pieces, you will give yourself an edge in the marketplace. No longer will you be perceived as a 'seminar grad', this is another step in becoming a sophisticated investor.
Why You Need A Realtor
Yes, despite what you may have been taught in the past, you truly do need a realtor as a part of your investment team. Consider realtors as just ONE source of property, while you develop a relationship with realtors you will also be developing your own marketing plan attracting For Sale By Owners and motivated vendors. What the realtor can add to this equation is time leverage, if you have built a strong relationship, and you are a proven buyer, realtors will do a LOT of work for you... at no direct cost to your bottom line.
Here are the main reasons 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 'inside' 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 - in the areas that pay. Such as buying more properties, finding more joint venture partners
and negotiating deals!
Why A Realtor Needs You
In the business of being a realtor, the only way to get paid is by facilitating the purchase and sale of a property. So, as a proven buyer, you are a KEY to their income equation. A Quality realtor will work closely with an investor because they also understand time leverage... meaning that it is easier to sell 10 properties to one person than 10 properties to 10 different people. So if a realtor shows no interest in you because you are an investor... MOVE ON! That would be a realtor who's stuck in a rut with blinders and prejudices already in place.
Here are the main reasons 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. These are
realtors who, quietly, make more money with MUCH less effort than 94% of realtors in the city!
- They quickly start to run MANY properties through every month... not just from you but also because of the many referrals that you bring them. As a proven
buyer they know you will buy as many good deals as they can bring you.
- As an investor, you also sell your properties when the time comes, they know if they have a strong relationship with you they will have
an excellent chance of getting the listing when you sell it - and listings are where the easiest money sits for a realtor
- 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
Because the relationship is key to your success with realtors, it is well worth the effort to fight your way through many potentials to find that "Quality 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 they might be when it comes to finding properties that fit your system. Is the realtor focused on a potential long term relationship or does it feel 'desperate' like they need to make this sale to eat this week? If the Realtor applies too much pressure during the conversation, you may be tempted to eliminate them, only because they haven't heard the word relationship no matter how many times you've said it. On the other end of the scale, if their 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 a creative way to get a deal done. There are many many realtors who fit this description so be prepared to be talking with many of them before you find the ones who 'get it.'
Aggression is good when they are working for you to uncover as many opportunities as possible. You want enthusiasm, along with competence and consideration to form a long term relationship that is profitable for both parties.
Expect an attempt from almost every Realtor to recruit you as a prospect. Remember, it is your job to sort and choose the best for you. Listen to their 'pitches' if they are polite and tactful, because sometimes you'll find a gem just by shutting up and listening.
I often get the question - should I focus on rookie or veteran realtors? Well, the bottom line answer is that it doesn't matter. 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. And because they haven't been jaded by years in the business, they often will be great sources! There are, after all, many veteran Realtors who have twenty or more years experience but have never really succeeded beyond being average in their field... so time in a marketplace is not critical, it is ability. Some of theses veterans make less-than-average incomes because they provide less-than-average service and live in their world with blinders on focusing on their prejudices.
I like to find Realtors who 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, I guess they prefer to drive people around the city in the back seat of their car. Well if that's their attitude the best thing to say is: "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. And remember, it doesn't matter if you're investing in your back yard or in another city... the process is exactly the same. If you are working with a realtor in your town, and you want to look at other cities, why not ask THEM for an introduction!
YOU must take responsibility for the selection of your own Realtor. This 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 them. This could be a sign that they don't have the time or ability 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, do what others aren't willing to do!
How To Build a Good Relationship With Your Realtor
Many investors think like the masses, this is a mistake! Real estate investing is a business and you need to treat it that way. It is easy to stand out from the 'masses,' if you step out of the box and start to look at the value this relationship brings you. Here are some thoughts that will give you an edge in the realtor marketplace:
- 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.
Speaking as a successful veteran investor, I can tell you that much of my success came from working hard at developing relationships that worked well for both parties. The majority of the properties I have purchased have been due to my relationships with realtors - relationships that have become so strong using the strategies I describe above that I now can put offers in over the phone sight-unseen. Meaning even more time leverage for me.
I highly recommend that you start on your hunt for a 'Quality' realtor or 2 that will fit your system and your personality. You will meet with MANY who will be discouraging before you find the gem... but believe me it is worth the wait!
If you want to learn more and hear how Arlen and his partner have Purchased, Renovated and Sold over $35 million dollars in Real Estate... Click Here
---------------------------------
Arlen Dahlin is a Edmonton based real estate investor who owns over 350 investment properties. He is also the President of Springboard to Wealth a training company focusing on educating investors on how to create Joint Venture Relationships. For more information, click HERE