5 Tips To A Successful Real Estate Agent/Investor Relationship
By JD Esajian on July 13, 2016
A good real estate agent can be the backbone of a successful investing career. Not only do they help find deals, submit offers and run comparable sales but they can also help you get the highest price when you are ready to sell. Developing this relationship typically takes several deals or years of solid communication. What may come as a shock to some investors is that not every real estate agent wants to work with you. Between the constant showings, lowball offers and excessive phone calls certain investors can be tougher than others to work with. If you want to get the most out of your relationship with your real estate agent you need to do your part. Here are five tips to a successful real estate agent/investor relationship.
- Discuss Strategy Up Front. The relationship you have with your real estate agent should be treated like every other solid relationship you have. You need to constantly be as open and up front as possible. Before you commit to working together you need to put your cards on the table. Explain to your agent how you plan on investing, which markets you are interested in, price points and the discounts you are looking for. They may counter and tell you the time they have available to show properties, their policy on lowball offers and which markets they will go to. As long as you have everything up front there will be no surprises when you start working together. Doing this may mean talking to several real estate agents before finding one that is a good fit. As long as you both know what to expect from each other you can get started on the right foot.
- Do Legwork First. You can’t expect your real estate agent to jump when you want something done. One of the best ways to improve your relationship is by doing some legwork on new listings first. By doing this you can see the properties that you really have an interest in moving forward with. There is nothing that upsets agents more than driving to a property only to have the buyer say that they don’t like the neighborhood. This is something that you can figure out before you see the interior. You should be able to get a good idea of the property, work needed and surroundings from the listing. The more work you do the more your agent will appreciate it. Doing little things like this will get your agent to work harder for you. Instead of being frustrated that they just drove out to a property and wasted their time they will appreciate that you looking out for them. This will come back to you the next offer you submit or the next time you want a favor.
- Value Their Time. There are only so many hours in a day. Your real estate agent is not paid by the hour. They make money on the deals they close. You shouldn’t ask them to do work that doesn’t generate income or at least a chance of it. By calling them every few hours asking about an offer or to check on a listing you are wasting their time. If you have closed several deals together maybe you can get away with this. If you are trying to build a relationship you should forget it. Don’t call to ask to run some comparables on a house you are considering making an offer on. Don’t call with a general real estate question that you can easily answer with a two minute google search. The more you value your agent’s time the more they will do for you.
- Organized Offers. When you see a property you like you need to be ready to act. As your real estate agent is doing their part you need to do yours. This means getting everything organized without asking. If you are getting lender financing your prequalification letter needs to be updated with the correct purchase price and loan type. If you are using cash or hard money funds your proof of funds letter has to be recent, signed and with enough to cover the deal. Don’t make your agent chase you around for signatures, initials or correct forms. Not only does this make it difficult on them professionally but it makes it harder to get your deal through. The more deals that are accepted the more likely you will work together in the future.
- Don’t Nickel And Dime. There are times when the bottom line is not the most important thing. Of course it is always important but by making a small concession it will come back to you tenfold. This is especially the case if you focus on low ball, lower priced properties. Don’t haggle over a quarter or even half a point commission. What essentially amounts to a few hundred dollars on a property where you make thousands is not good business. By keeping the commission fair you increase the chances that they will reach out to you first the next time a similar deal comes their way. What you may save on one deal you will lose much more in the way of future business.
As an investor you and your real estate agent need to act as a team. Like any good team you need to carry your weight. Once you relationship develops you find more deals together than you imagined.