Realtors and Investors, Pain or Gain?

Working with investors

This topic comes up quite often in our Realtor circles, and my agent friends ask me the same question.  Why do you work with investors so much?   

For me the answer is quite simple actually Investors speak an entirety different language than that of the average home buyer.  Their emotions are in check, and we are dealing in black or white scenarios in most cases.  While there is nothing wrong with emotions in business I tend to lean to my strengths, apposed to working on my weakness's.  For me personally I have little patience for mistakes, or indecision.  In our world, time is money, and no one gets paid until money hits escrow.  What I enjoy so much about investment Real Estate, is either the deal works, or it doesn't.  Period.

Our team works extremely hard for our investors.  We believe in speed to offer, and speed to close in the Portland Oregon market, where currently each home is seeing 6 to 20 offers upon each time a decent investment property hits the open market.  

With the government allowing for reduced cost for banks to foreclose, we are seeing less and less shortsales in our market, and a boom in REO bank owned.  Low ball offers, and negotiation parameters have changed drastically, and nearly over night. 

What do you do? 

Our team searches for homes, underwrites them, and negotiates the terms with the seller, usually a bank.  From this we expect the investor to have already done their due diligence, inspected, or at minimum had their contractor preview the property.  We find that for every 10 offers we should see an acceptance of 1 home.  We have a dedicated person that just writes offers.  That's not enough though, I personally call each seller, or seller representative to be sure we receive a fair opportunity to earn a counter, especially if our initial offer is extremely low.  However, backing out after an accepted offer because you didn't plan accordingly during the inspection period, is one of the fastest ways to lose a good agent team to support your many offers.  

Pain or Gain

The most important person on an investor’s team is a great real estate agent. Real estate agents can play a huge role in getting a deal, losing a deal, valuing a property and many other factors that can make you money or lose you money. It can be difficult find a real estate agent or Realtor who will return calls and respond quickly enough for an investor. How can an investor find an investor friendly real estate agent?

I am an agent and I think it is a huge advantage for investors to be real estate agents as well. If you don’t want to become an agent yourself, it is imperative you find a great agent to help you invest in rental of flix and flip properties. 

Many investors are very demanding on their real estate agent. They need to act quickly and may make many offers, before getting an offer accepted. If you are an investor who wants to make hundreds of low ball offers, make sure you motivate your agent. They only get paid when we sell a house they don’t get paid to make offers. If they are thinking it is a waste of time submitting low offer after low offer, they aren’t going to work hard for you.  At the same time, there is no better way for an agent to make a large income than working with a solid investor, especially with our reduced price list back program. 

For the Investor

Know your baseline and stick to it.  

Have your inspector, and contractor on speed dial.  Find issues with a home early. 

Going to make hundreds of offers? Trust your agent, and allow them to be an advocate to their market.  Low ball offers just to low ball, statistically rarely works.  IF the house works within your designated baseline and you get an accepted offer, buy it.  

Trust your agents CMA's, You probably think you are an expert because of an AVM, but an agent who has access to live, fresh raw REAL data, atop the experience will always beat out an AVM.  Think of an AVM, as a baseline to initiate further investigation. 

Lastly, understand your risk threshold, know your numbers, know your market, and let your agent help you.  Our value isn't just in "writing offers" We are facilitators, problem solvers, counselors, and expert negotiators.  

Conclusion 

It can take a lot of work to find a great agent. If you are investor, looking to buy multiple houses a year, a great agent can mean the difference in thousands and thousands of dollars. If you choose an agent, who you don’t think is doing a great job, don’t be afraid to fire them.

Bottom line, it may take a few agents before you find the right one, but make sure when you do keep them busy selling homes.  It's a glorious thing when an agent and investor team come together successfully.  The ultimate win, win!!!!