What do you expect from your real estate agent??

Question

Hello all,

I have an arrangement set up to meet with a group of investors to show them investment properties. I am an agent that has been doing a lot of research over the last year to get into real estate investing myself. I feel pretty comfortable running numbers and such on properties, but I was wondering what you seasoned investors expect out of your agent.

This could be a really profitable endeavor for me and I don't want to be unprepared for what to expect and things that I can do to ensure the business keeps coming my way from the group. What types of things do you look for? I would imagine a reduced commission is pretty standard for all flips that get put back on the market to be sold? Any opinions or feedback would be greatly appreciated.

Joel Owens · Answer

Jake in preparation of the meeting you should ask for them to send and get back to you a (personal financial statement).

Also ask them how they close on the properties?? Is it their own cash they are regenerating from each deal or are they using a HML loan??

If it's an HML then it's not cash that investors say it is. An HML is tied to conditions to get the loan for funding. Someone's direct cash sitting in the bank generally has no conditions.

It's fine if you want to meet with them and learn but do not pay for their meal and all of that not knowing who they are first. I wouldn't spend time with someone without properly vetting them but I am going on 11 years in the business. If you think about your time it will be about 1 hour to 2 hours in the car and back depending on how long the drive is to meet up. Also the length of the meeting generally can be 45 to over an hour in length depending if you hit it off or not. Pay attention to what traffic will be like for that time of day. You do not want to meet at times where it will put you in heavy traffic and eat up most of your day getting back to the office.

Think of your time as an investment in your business that needs to convert to dollars. The relationship has to fit both parties goals to be mutually beneficial.

Good Luck.

John H. · Answer

I second Wayne's comment above. Qualify your "investors" as it could potentially result in a lot of busy work and preparing offers that simply aren't competitive/realistic. Good luck nonetheless!

Jake Engle · Answer

Thank you so much Victoria,

Your thoughts are very much appreciated. You make some excellent points and I really do want to jump into the investing business. I have been on the ledge ready to jump, just need that little nudge. Funding my first deal has been my biggest hurdle, as I am trying to come up with some creative ways to do so. Thanks again!

Victoria Winters · Answer

Hi Jake,

I agree with the comments from @Joel Owens .  In working with investors as an agent, the same professional business practices you use for your buyer and seller clients apply. Qualifying your prospective clients is beneficial for you and the client.   Helping people achieve their real estate goals is the job of an agent. The knowledge you have of the market, purchase and sell process is worthy of the fee (commission).  If the client had your knowledge and expertise, they would not seek your help.  Lowering your commission sends an incorrect message to yourself and your clients about the value of your business and the services you provide.

As a licensed agent, you already have the tools and expertise to invest in real estate.  What are you waiting for?  Be your own client, decide what you want and go for it.  Think about how successful you are already in helping others buy and sell property and take your own advice. You just may surprise yourself when you make the decision to be an investor.

Best success to you!

Jake Engle · Answer

Just a quick point. I was just in contact with one person who would like to view a couple properties. He did say he was an investor and price isn't an issue up to 750k. I am showing the properties tomorrow and was notified a group of 6 other investors will be with. I am fine with investing some of my time even if it were to be a dead end, as I believe the positives could significantly out weigh the negatives. I do believe that it could be a little weird if they are established and don't already have an agent they are working with. My feel is that they are just jumping into the investing game now and they have a lot of cash to play with. I will update and I'm sure have some more questions once we meet tomorrow. Thanks for your time guys.

Wayne Brooks · Answer

First thing I ask guys who say "we flip a lot of houses" is, what name are you guys buying in?  Then, search public records.  Many calls like this will be wannabe's, trying to "assemble a killer team" with no idea of what they're doing, no money and no financing.

Jake Engle · Answer

Thank you for your reply Joel, I really appreciate it. You make some great points and some great ideas for me to consider. I am extremely unfamiliar at this point the experience level of the investors. I was contacted rather randomly by one of the investors through an ad that I had placed. It sounds like they are looking to do a high volume of deals, but I am meeting with all of them tomorrow and should learn more about their experience and needs. I will make sure I am as prepared as possible with all of the info that I can provide.

Joel Owens · Answer

Jake try to create more value for yourself. Reducing your commission out of the gate is not the way to go.

You are basically devaluing yourself and saying you are only worth a smaller and smaller number.

Instead you should have a presentation of why you should be picked and what you do that other agents do not.

Before doing this it is great you know your numbers. Have you researched the group you will be meeting?? Do you know the experience level of each investor and their holdings?? Do you know what their goals are for investing?? Do they want a short term relationship or  a long term one over your career?? Ask them what other broker/agents did right and more importantly the top three things that they did wrong that the group values as important.

Ask how many properties they buy a year?? You need to know time requirements working with these investors and how hard it will be to  find properties that match their criteria. For example if their goal is 15,000 profit per flip for easy makeover type properties then their deal velocity will be higher versus wanting a few big pop properties a year making 40k to 50k at a time. Those properties with bigger spreads will be much tougher to find.

You need to know their investment style. Is it they want you to throw out 100 offers low ball and see what sticks or is it you help them narrow down to a few properties and really try to negotiate on those hard to get a deal??

On the commercial real estate side I qualify buyers just as heavily as they qualify me but I have been doing this awhile.

Hope it helps.

What do you expect from your real estate agent??

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