As real estate entrepreneurs, we all want to get great deals all the time…in every market we choose to be in. Although there are many ways to procure a good deal, one avenue certainly is through a realtor, so having one in every city or local area is key to your business.
There are realtors and there are realtors. Most realtors, when asked if they work with investors will often say they do, however many say yes to this question for the mere purpose of having another client. It is therefore imperative to ask particular questions of a potential realtor to understand if they know their salt as it were, and to verify if they are up to the high standards you require for each of your team members.
Here is a line of questions which will allow you to understand whether a realtor should be part of your team. Let’s assume you have told the potential realtor that you are an investor and are looking for a good realtor to help find you good deals to fix and flip, rent to own and for long term rental.
- Do you own investment real estate yourself?
For any real estate entrepreneur, your team members must own, or at least have owned investment real estate. This attribute means they have themselves gone through the process of looking at appropriate areas, crunching numbers, looking at comparables, fair market value rents and all the diligence required prior to making an investment real estate purchase.
- How long have you been in the business?
You are looking for an answer that consists of not just how many years, although at least 5 would be a minimum, but how many investors do they work with that have similar needs. There are too many part time realtors which may not be able to provide you with the experience you require.
- How many investor deals have you done? When they tell you a number, then ask them to tell you about some of them… what the property make up was, the profit or cash flow made etc.
- What types of properties/deals are you most comfortable with?
They could be an expert or niche in multi-unit properties. Ask if they have any related expertise, too. If they were previously involved in the military, they may relocate veterans, or if they were previously in the corporate world, perhaps they can find candidates for short term corporate rental. They may be an expert in finding first-time buyers which may help in finding buyers for your flips or RTOs.
- How will you communicate with me?
A communication lapse of even a few hours can mean the difference between an accepted offer and a missed opportunity. You must choose a realtor who responds quickly in the mode of communication you have agreed works best for you. Also ask who will be your main point of contact, because some busy realtors use a team of assistants to handle day-to-day tasks, and you may not have direct access to the agent you choose.
- 6. Can you share your team members?
In addition to interviewing potential realtors, ask if they have any great sources of lending, property inspectors, insurance agents, mortgage brokers etc. Any good realtor has established a good team to surround them. Of course a full interview process should be used for their references as well.
- Can you explain any and all costs in working with you?
When you are the buyer, you don’t often don’t pay commission directly because the sellers usually do. That said, some sellers (or seller’s agents) can negotiate the closing costs over to the buyer, depending on the property type, the property price (i.e. if it is drastically discounted), who the seller is (could be a bank), or even the negotiating ability of the buying agent. Make sure you understand all costs prior to moving forward with any property purchase.
These questions can help you get a sense of the realtor’s process and personality. You want an experienced realtor who can get you real deals, who can work aggressively on your behalf and at the end of the day, can tell it like it is.
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