How to find a good real estate agent?

Question

I am a relatively small scale investor from Washington DC and I usually buy condos at class B locations at urban areas at this point in time. I am just trying to build a base structure I can rely on for the next phase. I own 3 properties for now, all cash purchases.

However, I find working with real estate agents is not always the easiest thing. From the start I tell them that I am looking for “investment properties” for “investment purposes” and I have to review a lot of factors as well as numbers instead of just seeing one place and falling in love with it, eyes wide shut.

But I find this analytical approach is a frustrating thing for the real estate agents. They don’t seem to like it. They don’t like to gather numbers for you. They don’t like to find the rental income the location may generate. The just rush rush rush and only try to appeal to the emotional factors, however I am not looking at properties for... ...romance... but for investment purposes only. Apparently the properties should have some good emotional content/emotional appeal so that there will be a solid demand but more often than not, the RE agents are just shortcut people that try to make huge money with the least amount of work.

Also I work as a design engineer  but I am being very reasonable. My question is how do you guys handle this issue?

Joel Owens · Answer

I can give examples in my 16 years experience what I run into on the buyer side. Just as many flakes for buyers as there are brokers/agents.

1. Buyers that inquire and are doing RESEARCH. There are thinking of investing in something but not sure. They want the world for free upfront to try and get comfortable doing something and even then are wishy washy about it. It's great to do research early on BUT statistically a busy broker/agent can't spend day and night with someone to learn an asset class when they have other clients that are buying properties TODAY.  It's a balance of small controlled time spent early in the process, then middle more time with the buyer, then really close to buying ramp it up.

2. The type of buyers that are committed to nothing but the DEAL. They will got talk to 40 brokers on their own and typically view broker and agents as a nuisance in their way to buying the property they want. They are loyal to nobody but themselves and it shows. Brokers and agents often run away from these types unless they are a REIT or fund etc. on the commercial real estate side and that is their business model. Brokers then understand it and accept it in most cases. Those professional buyers will have their own processes and it's generally a hand off until closing. An individual high net worth buyer however tends to take a lot more time and effort one on one to help them with a purchase.

3. The what I call IDEAL client. The buyer is ready with financials, asks questions but not too much as they value the broker/agents time. They are looking for an exclusive relationship today and into the future to help them reach their investment goals. The broker/agent and the buyer tend to compliment each other in beliefs and life views. It's not just about the transaction but the overall relationship.

4. The CLUELESS buyer. They think they are the only business in town. They think brokers and agents should be at their beck and call all the time. They don't see the broker and agent as equal in a partnership but someone beneath them that is providing a service. My favorite line I hear is I need your expertise but brokers and agents I can't stand to work with..lol

I have talked to thousands of investors over my career some in person and some on the phone. You see all types and personalities just like brokers and agents. There is generally a fit for everyone. You just have to go out and find the right fit for you and set expectations from both sides upfront of how you both see the relationship working .

Russell Brazil · Answer

Going to give you some bad news here. It is your job as the investor to understand what the rents are in a location. You can ask your agent when unsure to confirm, but rarely should your agent be providing that as the primary source, even an agent who specializes in investments.

Your job is to say I want to buy a property that meets this criteria whatever that is, 2 br, 2 ba in X neighborhood at Y price, then your agent executes that plan. But you should mostly know what that rent is, and when you are serious about a particular one, then you can check the rent comps to see if they match up to what you intuitively think they are.

Joel Owens · Answer

Brokers and agents do not like doing a bunch of free stuff if odds are low it leads to  sale or payoff is small after splits. If these brokers or agents sell lower priced properties they tend to make it up on volume. For volume they need deals nice and easy ( investors with their own systems and processes) so they can slam out deal after deal.

I take time as an example with my commercial real estate clients where I am the principal broker but typical commission is over 100k per deal. I could see if an agent did not own their company and commission was 5k and after splits and fees they make 3k a transaction they would run away from anything difficult or time consuming. Not all but a lot view how much work versus how much payoff.

Jake Alger · Answer

Let's keep in mind that not every real estate agent is "investor friendly."  Only some actually spend time working with investors, understand the terminology and know the market in a more in-depth way than appealing to emotions.  As @Russell Brazil eluded to, for the most part, investors are going to locate the deal that appeals to them most almost always by themselves.  They know the criteria they're looking for and that usually comes along with some market research for where they're looking.  Heck, it's even that way for the "retail buyers" since everyone has access to the internet all the time.

Sure, for some of us who are investor friendly, we may have off market opportunities available from time to time, but not every MLS or state (depending on who you're responsible to), allow for "pocket listings."  The hard and fast truth is that investors tend to be harder to work with, which is a fun challenge in my opinion.  However, the deals still have to get through to put food on the table.

I highly take exception to the "RE agents are just shortcut people that try to make huge money with the least amount of work" section.  I can assure you that for the good agents who stay in this business, we are far more focused on providing a great service, helping navigate perhaps the largest purchase/sale someone will ever make in their life, acting as a fiduciary to our clients best interest, all while creating a long lasting relationship that will hopefully trickle down through the generations to help us sustain our business.  For the others who match your assumption, they get weeded out within the first few years when they find out this business is far more difficult than expected.

Lien Vuong · Answer

Honestly it looks like you have not found the right agent. As an active real estate advisor I spent most of my days analyzing deals and fact finding before we even go out to a property. Being that you're a busy professional and you rely on us, the agents, to perform our role in running the numbers and providing comps, rental info, and negotiating the best deal for you I think that's the right expectation for your agent.

Have you thought about reaching out to the agents some fellow investors have use in the area? Any meet ups where you can find like minded agents that can fit this role? Seeing as that professional is a very important component part of your investing strategy I think it's worth doing a little homework to make sure you have the right person filling that seat.

Brit Hale · Answer

@Joel Owens one of the best descriptions of investor clients as seen through an agents eyes.

Richard Gray · Answer

@Gunes Ko.    I have struggled with RE agents for twenty years. They really don’t comprehend the investors and consider us to be another fool off the street who expects the agent to do several contracts, show several properties, pull comps  and all the other stuff included in  the sale a home and to top that all that, this investor refuses to pay the listing price which cuts the agents commission.

I buy two houses per year, generally for cash. I make it as quick and easy as the seller wants. The only thing t require is a clear title and title insurance. No survey, no subject to inspection, no home warranty. No finance,  Can be in seven days, but generally ends up being two weeks.

In almost 30 years of investing not one agent has brought me a deal. Not one agent has called me

Saying they found a property which meet my criteria and might make a good investment. I am on a couple agents e-Mail list. I ask for 90k to 100k houses, they send me $160k to 180k listing. I keep hearing about these agents “Pocket List”, but I have yet to experience one. I buy with agent to assure everything is legal and up to date with current laws. They don’t sell me anything.

If I was a agent, which I an not, nor do I desire to be, I believe I would sell at every opportunity, but would  also have a place in my heart for “investors”. We’re are the ones who provides affordable homes to the mass’s. And I think, if an agent acquired say twenty investors who bought one of two properties per year that agent would be doing well.

Michael King · Answer

Finding a good agent is like winning the lottery. It may happen once in your lifetime, but don't bet on it.

I found one in Texas earlier this year when I sold my home. She was awesome and cared for my needs. She also tried to find me investment properties in Texas before we moved to St. Louis.

Here's how I have been doing it in St. Louis: I have bought 5 brand new houses direct from the builder. No agent involved, and prepared to negotiate as such. Sure it will cost more initially, but the warranty and 'everything is brand new' makes it worth it to me. And I get good rents because they're new.

Right now I'm procrastinating on getting my realtor's license, so I can cut the dummies entirely from my life. Maybe this is something for you too?

Marc Brenner · Answer

Hey, @Gunes Ko if you ever decide to invest in the Atlanta area, look me up. I LOVE analyzing deals and working with my investor clients to help them accomplish their goals!

Michael King · Answer

I better throw out an apology to the good realtors out there. I know the good ones do exist; I found one in Texas. But I've been through at least 10 in 10 years. I would say that any realtor responding on this website is more than likely a good one, considering they seem to be taking their time to respond to people outside their areas, with no financial gain likely.

So naughty me for being a negative sod on realtors (heck I was even one myself for a brief time 22 years ago in Australia, but got fired when I broke my leg on a 'vigorous' house inspection!).

Maybe go to a local broker and sit down with him/her, if you are looking for a bunch of properties I'm sure he or she will gladly help, or give you someone who may be hungry, that will spend the extra time to help.

This is all about everyone's value for time spent these days.

How to find a good real estate agent?

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