Buying Real Estate Investments - Part 3 of a 6 - Finding a Realtor®
Moving on to Part 3 of the 6 steps toward buying a home or investment property with step 3: Finding a Realtor®. And it should be easy, right? How about just going onto Zillow and choosing someone....anyone? Not so fast! Choosing a Realtor is a very crucial part of the buying process. Not all Realtors are created equal. And more importantly, just having a real estate license doesn't make someone a Realtor!
OK, so how does one choose? Word of mouth is a good start. Have your friends/colleagues used a realtor they liked? Find out who that is and interview them...and at least two others. Find out what the realtor's experience is and what kind of a track record they have. Do they do this full-time or part-time? More than likely you want someone dedicated full-time to real estate. Do they understand the market you're interested in? Here in Pittsburgh, PA, the market is tricky as it changes street to street. You want someone who really knows the neighborhoods and the properties within them. What is their specialty? Investors typically want someone experienced in investment properties while home buyers want someone who understands that market as each have their own nuances. Really get to know your representative. What can this Realtor do for you? How will they help you find a home or investment property, what latest technology do they use and how responsive are they? Responsiveness is HUGE. You don't want someone who calls you back days later, only to miss out bidding on that perfect property. So treat this like a job interview!
This is a major purchase you're making, so the person that represents you should be someone with the qualifications and knowledge that best fits your requirements. Besides responsiveness, look for qualities such as experience, market knowledge, creativity, attention to detail, aggressive not combative, ethical and a great negotiator on your behalf. Don't be afraid to ask questions and be direct about what you're looking for. If you don't know what that is, a good realtor can give you direction based upon questions they should be asking of you. An interview and its ultimate decision should be a mutual agreement. You should be asking a lot of questions, as should the realtor. So a good rule of thumb is to interview three people, then compare. Once you've made your decision, work with them solely until you can no longer work together, that is. Remember, realtors must abide by a code of ethics in providing fair and honest treatment to you, your family or your business venture. Good realtors work for every dime they earn, so try to avoid "realtor jumping" from one to the next. As your relationship develops, your realtor should understand your wants and needs, fine tuning their work to your specific requirements. And if they don't, move on. Yes, you could go it alone, but why would you?
You see a house and make an offer, how hard can that be, right? Sure, if you choose not to hire a realtor, there's certainly less hassle and paperwork plus a better chance to negotiate a deal, right? Wrong! You see, a successful Realtor knows the homes on the market long before you do, has been in the neighborhoods you're interested in, completed the training required, obtained licensure and possesses the knowledge and experience to offer their expert opinions. They guide you through the mountains of paperwork, keep you on deadlines, and point out potential problems that could save you time, money, heartache and potential legal fees. You may be the best negotiator, but there are many things that can happen in a real estate transaction that could potentially derail your dream. You want someone who's like a conductor guiding you safely to the station.
And you want a savvy negotiator. Yes the negotiating phase may seem like a "tug of war", but it doesn't have to be with the right advocate. Do you have information about similar properties in your desired neighborhood (aka comparables)? Are you aware of the zoning and occupancy codes or what constitutes a legal multi-family unit? Do you know your options for funding? Are you thoroughly versed on potential contingencies to include or not include in a sales agreement? What goes on in an inspection and how to use the results to better negotiate the deal? What an appraisal is and what it means when an appraisal comes in lower than the list price? Are you prepared to bid appropriately, counteroffer and still get a good deal without alienating the seller? Just like poker, do you "know when to hold 'em and when to fold 'em?'' (Thanks and R.I.P. Kenny). Don't trust the largest purchase you'll ever make to chance. A good Realtor will help you through all the steps in a real estate transaction like a pro.
So how do you find that pro?
Hire a professional that lives and breathes their profession. In this case, real estate. Unless you're an electrician, you wouldn't do the electrical wiring yourself. You wouldn't install siding or do major plumbing work, so why would you buy real estate on your own? And when it comes to critical advice and help, would you represent yourself in a legal battle or hire an attorney? You wouldn't operate on yourself either, you'd call a doctor. Of course some people have great success buying properties on their own. Some hire wholesalers to do the work and things work out just fine. Realtors are bound to clients by their fiduciary relationship and an enforced code of ethics. Look for the circle ® designation after the word Realtor. that means you've found someone who is committed to their profession by joining the local, state and national associations. They've invested in their future and are committed to you and the industry. Bottom line: Do your due diligence. This is an important decision you are making and you need a professional with you throughout the buying (or selling) process. Now go find that Realtor®!
And stay tuned to Step 4 to buying real estate: Tips For Touring Properties.
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