Choosing an agent?

Question

How are you guys choosing which agents to work with when buying flip projects?  Are you finding them through referrals, area specific, or just doing recon on who is most heavily involved with moving REO's or short sale specialists?

I'm in the process of getting my own license but would like to get moving in the meanwhile.  It is very easy to spend too much time reading and not enough time doing.

Joel Owens · Answer

Steve,

Contrary to popular belief high caliber brokers and agents are in high demand.

It's the other 90% you are left with that are mediocre.

Problem is you are already saying you are getting your license so your agent will get maybe one deal from you with a low commission and that's it.

If a broker/agent wants to do really well they want repeat business from a group of clients instead of a bunch of one off deals.

I would got to the REIA meetings and see what you can find there.

Steve K · Answer

I'd say overall my experiences in dealing with agents as an investor have been fairly poor which has certainly gotten worse as inventory has tightened.  It's a numbers game.  98% of agents are worthless from an investor perspective so you just have to keep hunting for the good ones who possess a little business sense and investment knowledge.

One thing that always fascinates me is just how few agents invest in any form of real estate.

Danny Day · Answer

Steve, are you talking about a buying agent or listing agent? Many times they are not the same. Some agents specailize in selling while others work with buyers.. and some take what they can get.

If you're looking to purchase, I would find an agent who has worked with investment real estate before, and does not mind submitting offers / pulling comps for you. Typically these deals will be low end / low commission for your agent so you will want to keep him on your good side by letting him know (and following through) by sending him refferrals for other people in real estate.

For selling, I would find the local expert and have them list. If they know the neighborhood, have the most listings, etc. find them. Also be sure to request a copy of their marketing plan, and see how they plan to sell your house faster than the rest. A good agent will have this in detail. A bad agent will throw it on the MLS and wait for a buyer to walk through your door. You're looking for a pro-active agent who will find the buyer for you. Another good thing to look for is an agent who pays for professional photos, marketing materials, flyers, etc. If they are investing their money in your property, they have more skin in the game.

Hope this helps, good luck

Danny

Sandy Blanton · Answer

Steve K  I spend half my energy on listing sellers as a broker/the other half in investment.  I too have always been amazed at how few agents are investors.  The truth is 90% of them get into the business because they "like looking at houses."  This was a stat from a major survey I read years ago.  The top 10% (who see houses as widgets and not purdy things) make 90% of the money.  The 90% can barely feed themselves, must less invest.  It's the 10%'ers that are the investor/agents.  IMO:)

Brandon Foken · Answer

Thank you both, J  Scott & Will Barnard for your words of wisdom. I had been spending this morning calling/emailing smaller brokerages in the Bay Area, but have found that to be a waste of time. I'll take your advice Will and call about specific properties.

I'm thinking of pitching my value add as:
-Can refer leads from my direct mail campaigns that want/need/warrant FMV
-Listing a flip with them (although this may be a bit unrealistic as I don't think I'll have a completed flip in the next 5ish months)
-Sending other investors their way

Is there something that I'm completely overlooking or not realizing what I can bring to the table? Sorry for the remedial questions, but I'm just trying to ensure I won't come across as a big dummy when I call around.

Will Barnard · Answer

Brandon, I would not suggest you simply start calling around to brokerages. What I would recommend is calling on a specific listing for an agent at a brokerage. That opens up the doer to discussion. You call asking info on that listing, then move the conversation on what you do and how you benefit agents that work with you.
Keep the conversation with as much of "what I can do for you" rather than the common mistake of "this is what I need"

J Scott · Answer

Brandon -

First, many agents would be happy to work for just "one or two" listings.  Two is twice as many as they get from most people they work with...  :)

Regardless, even when you have your license, you'll be happy to have other agents bring you deals (we are!), and they'll get the commission whenever they do.  Just because you get your license doesn't mean you won't be working with good agents, and they'll be getting paid for helping you to make money well into the future, license or not.

Brandon Foken · Answer

I'm in a similar situation as the OP, Steve K. How did things work out for you Steve?

I'm currently enrolled in some local community college courses and will be taking the CA license exam in the summer. How can I approach an agent full well knowing that they'd would maybe get one or two (at best) listings from me? How do you try and make that a mutually beneficial relationship? I'd like to start calling around to agents/brokerages in my area, but am hung up on what to say to these folks and how to make it worth their time. Any advice in very much appreciated.

Steve K · Answer

Thanks guys for the suggestions.  Agree completely that it makes sense to go after those who are listing most of the REO's and have some direct relationship with asset managers.  I've tried to get direct ( as i'm sure everyone has ) to the residential asset managers through attorneys, however that hasn't resulted in much.

Excellent pointers on interviewing potential agents.  I have no doubt i'll go through a few of them but hopefully the knowledge you guys are putting out here will cut that learning curve down significantly.

Choosing an agent?

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