@Adam Butt technology can allow you to take a virtual tour, using Skype or Facetime. That is a great. However, I have seen investors on BP talk about the "unseen" problems. A real estate agent knows where to point the camera. Smells can be a sign of major problems and that is hard to remotely detect. Loud noise from traffic or other neighbor issues can only be detected by being there. One investor purchased a property at the bottom of a hill and the house flooded after major rains. It is hard to see some of these things without physically being there.
I could see using "trusted people" to be your eyes, ears and nose. I would probably visit an area for my first couple purchases. Then after getting a relationship with a realtor or property manager, use them in the future as your feet on the street. Keep in mind that nobody but you has your best interests at heart.
This is definitely pretty common these days. Working for an investment company/brokerage, our biggest client buy over 200 homes a month in various markets, sight unseen. They don't see the home until about 2 weeks after it's under contract, and it still closes 95% of the time within 28 days. Just comes down to trusting who you are working with. We budget about $20k in repairs and account for the yield requirements of the fund that buys these homes. As the realtor, I just ask a lot of questions to pull out info ahead of time and if anything questionable comes up we don't buy the home. I'm very thankful I don't have to visit these homes before putting offers in. We also buy off the MLS, so it's understood that the agents listing the homes have done a lot of due diligence to list the home appropriately and disclose issues with them. Might be a different story for off market homes.
@Ola Dantis Very useful feedback! It may not be at the extreme of buying in some cases, but also leveraging local insight to carry out your earlier due diligence before investing your time and money.
You comparison is relevant, there seems to be a growing disconnect between people where there is no sense of trust. I myself as a growing investor and entrepreneur would be comfortable paying a small fee to allow a qualified and vetted local representative/agent to be my eyes and ears on the ground. This not only allows you to focus more on Income Generating Tasks (IGTs) to maximise wealth, but also provides a source of income for for your representative.
I strongly believe that a commission based model taken by an agent for the purchase or sale of a property is not sustainable and low volume. Instead of charging extortionate fees, it makes sense to deliver the exceptional service at fair value, grow your reputation and grow your volume of service.
This makes for fair and profitable business model.
@Joe Splitrock All valid points. This comes back to my point on trust and transparency. At the moment there is no rating and review system to vet your agents, and there sometimes may be (but not always) a sense of closing a deal and getting the commission.
Correct me if I am wrong, but the whole sale/purchase process is facilitated by the Agent, who are people you have never worked with before. At this stage you are forced to trust them in order to build a relationship and get the desire level of service quality. However, the Agent would still be inclined to directing you towards properties in their portfolio, offering a limited view of other market listings.
With this in mind, I open the floor to BP with a question. Do you see value in employing an independent agent, carefully vetted by an organisation, credible through feedback provided on previous engagements, and open about their skills and experience, to inspect, report and advise on a property that you have identified, in exchange for a small fee ($50-$150)?
Before answering, please consider the fact that you have reviewed your deal pipeline and have been left with a shortlist of properties to investigate. Consider how long this will take and how you would otherwise use your time.
Thanks
@Joe Splitrock All valid points. This comes back to my point on trust and transparency. At the moment there is no rating and review system to vet your agents, and there sometimes may be (but not always) a sense of closing a deal and getting the commission.
Correct me if I am wrong, but the whole sale/purchase process is facilitated by the Agent, who are people you have never worked with before. At this stage you are forced to trust them in order to build a relationship and get the desire level of service quality. However, the Agent would still be inclined to directing you towards properties in their portfolio, offering a limited view of other market listings.
With this in mind, I open the floor to BP with a question. Do you see value in employing an independent agent, carefully vetted by an organisation, credible through feedback provided on previous engagements, and open about their skills and experience, to inspect, report and advise on a property that you have identified, in exchange for a small fee ($50-$150)?
Before answering, please consider the fact that you have reviewed your deal pipeline and have been left with a shortlist of properties to investigate. Consider how long this will take and how you would otherwise use your time.
Thanks
Every agent it different, but they are compensated when they make sales. They have a tendency to be "glass half full" meaning, they will downplay issues and play up good things. An agent couldn't make sales if they always focused on the negative. As a buyer, I am always looking for problems and use it as a way to get my purchase price down. You could hire an independent person to inspect the property. I would just make sure you find that person on your own, rather than through agent referral. You want them to be totally independent.
@Matt M. Thank you for sharing your thoughts. Were these out of town or local purchases?
Both purchases were local here in Denver.