The Investor's Guide to Real Estate Agents
To be honest, for most of my career as a private investor, I considered real estate agents an obstacle to success. Now, here I am advocating that you make them partners in your investment team. Why the change of heart?
Well, one day I woke up. I realized that Real Estate Agents are not only a fact of life, but they're best way to achieve investment success simply because of their knowledge and important place in the real estate community.
Of course, an absolute requirement for investment success is to work with real estate agents who know what they're doing; otherwise, you're wasting your time as an investor (not to mention that of the buyers and sellers).
In this article, I'll give you seven guidelines for choosing the best real estate agents to work with in any investment situation.
Guideline #1: Choose a Full-Time Professional Real Estate Agent Avoid part-time real estate agents out there wanting commissions. Most are either mediocrities or amateurs who check in when the market is hot and check out when it slows. A good way to weed these individuals out is by asking for their experience, qualifications, sales, etc. Then, go with the real estate agents who have a demonstrated record of excellence over time.
Guideline #2: Choose a Specialist Ideally, you want a real estate agent who specializes in your particular area of investment. So, if you specialize in the single-family home market, look for an agent who has considerable experience and expertise in that area. Do the same for any market--multi-unit, commercial, retail, and/or the industrial sectors. By the way, don't just accept a real estate agent's word that he or she is an expert in a particular market. Ask for proof in terms of sales within your target market!
Guideline #3: Verify Real Estate Agent Credentials You can check with your state online database and other sources to make sure the agent is fully licensed and has no citations, disciplinary actions, etc. on his or her record. If a Real Estate Agent has ethics problems, you definitely don't want them staining your reputation, even if it's only by association.
Guideline #4: Ask For and Check References As with any business, the best proof of success lies in satisfied customers. So, ask the real estate agent for references from customers within your target market and geographical area. Contact those references to get a rounded picture of the real estate agent's reputation and business practices. Naturally, you'll want to develop a relationship with real estate agents with good to excellent reputations for honesty, fair dealing and patience. It'll make the entire investment process a much smoother and more profitable one since you'll be dealing with satisfied customers, not irate ones.
Guideline #5: Demand Good Communication Skills In any investment transaction, clear communication is the key to success. Seek out real estate agents who listen well to you and everyone else and who keep you informed and up-to-date on all transactions. And, don't forget that clear communication is your responsibility as well. Make sure the real estate agents you choose fully understand your investment goals so they don't waste time bringing properties to you that have little or nothing to do with those goals.
Guideline #6: Look For Real Estate Agents with Strong People and Negotiating Skills A Real Estate Agent can have all the experience in the world, but if they don't relate well to people, they're of no help to you and your investment deals. Make it a point to locate agents who are great at making everyone happy while moving people toward a deal with good negotiating skills. To find out about a Real Estate Agent's negotiating skills, talk to former clients about how effectively the agent conducted bargaining sessions.
Guideline #7: Remember Your Responsibilities Once you form a relationship with a great Real Estate Agent, do your bit to keep them on your team. Bring them good deals, not "ghost" deals that never materialize. Remember, your reputation is on the line too, and you want it be a good one because it can help you build a long-term investing career. A Real Estate Agent who considers you a reliable and honest investor will bring you deals that never show up on the MLS listings or in the newspapers!
Key Point: Find the best Real Estate Agents for your area of investment and cultivate great relationships with them. You'll both profit!