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It's easy to find a real estate agent, but you don't want just any agent. You need one or more that will really help you with your investment goals. What qualifications should they have, and how do you find them? Here are some tips.
Have you ever asked an agent a question about a house, and then had to wait for him to call the listing agent? Then the listing agent might have to call the seller. Once he finds the seller, he calls your agent, who then can try to call you back with the answer. After doing this a few times, you might hesitate to complicate things with more questions, even if they are important. Also, no matter how much you make the agent work for you, you're getting third-hand information.
Instead of working with one agent when looking for properties to flip, you might want to go directly to the listing agent for each one you are interested in. Listing agents will know the most about the properties, of course, and can call the seller directly with your questions. Should you go this route? It's tough to say. Sticking with one agent, even if he represents the sellers, means he's motivated to call you when a new fixer upper comes on the market, and to help in any way he can, because he knows he can make a commission from selling you something.
Of course, having more direct access to important information has it's advantages too. In the end you'll have to go with your intuition on this one. But in either case, I recommend that you find one good real estate agent to sell your properties. In other words, any of the following options work:
1. Find one real estate agent for all your buying and selling needs.
2. Find one for help you buy and one to help you sell.
3. Go to listing agents when buying and have one good agent for selling.
You may want a buyer's agent. Usually agents legally represents sellers. They're supposed to get you to pay as much as you can, and are even obligated to pass on information like a comment you make about going higher if your offer is rejected. A buyer's agent, on the other hand, contractually represents you. But his motivations still may be suspect, since he only makes money when you buy something, and makes more when you pay more, and can talk without thinking. So keep your negotiating thoughts to yourself, and in either case find an agent that can find the deals. Here are some ways to do that.
Find agents that invest. - A real estate agent that has flipped a few homes herself is more likely to understand what you are looking for. One possible drawback - she might be your competition too.
Look in newspapers and real estate guides. - Every time you see a house that might interest you, note who the agent is. If you see a name show up several times, you have found someone who knows about the type of properties you are looking for. He may even have some listing coming up that aren't in the MLS yet, so give him a call.
Ask about experience. - If the agent doesn't have at least a couple years experience, he is probably less likely to know what to do when problems arise. On the other hand, if you are very familiar with all aspects of buying and closing a deal, a new agent may have more time to devote to helping you.
Note whether he listens well. - If you say you're looking for a certain price range and he calls repeatedly to tell you about properties that are $50,000 too high, find a new real estate agent.
Look for an agent that is working in the same general area that you are investing in. Find one that answers the phone or promptly returns your calls. Ask the following questions. They won't make you popular, but you need to know.
How much experience do you have? - Unless the agent has been working in a related field (appraising, selling mobile homes), I wouldn't use an agent with less than a year or two of experience.
What kind of experience do you have? - Agents specialize, some in raw land, other in income properties. Find one that sells properties like yours.
Can you give me a couple examples? - You may even want to call previous customers to hear what kind of job the agent did for them.
Why should I list my home with you? - Listen to what she has to say. If she can't convincingly sell herself to you, she may not do such a great job with buyers for your home either.
What will you do to market my houses?- Any agent can place an ad and put your home in the multiple listings. Do they have existing leads - people looking for properties like yours? Do they let other agents know about your property?
Do you show your own listings very often? - Many agents just list real estate for sale and let others sell it for them. It's more profitable for them, but not for you. If he's a good salesperson, you want him to be going through the house with potential buyers as often as possible.
Do you attend your own closings? - Again, it may be better for their business to delegate this part of the process, but it isn't better for you. You want the same person to be there through the whole process. You want one person to call. Things go wrong all the time in real estate, so don't complicate it further by having more people involved.
How much is the commission? - The highest I have heard of for residential real estate is 7%. With higher home prices, full service commissions when we were in Tucson were as low as 3% (2006). Check around, and if the commission is high, ask what they do extra to justify it.
What is included in your service? - Do they do all showings? Do they have arrange all the details of the closing?
Does your broker or you control advertising of my home? - You want the agent in control as much as possible. Otherwise he has to compete with the other listings, and may not be able to do what he needs to do to effectively market your home.
What is your average time to sell a home? - You can check with the Board Of Realtors for the usual average, to see if the agent is better or worse than average.
How many listings do you currently have? - Active agents are often more efficient. You want an agent who is very active, but doesn't have too many listings right now. You don't want to be forgotten in the crowd.
How long is your typical listing agreement? - They will want to lock you into a lengthy contract. Nobody wants to waste time and money marketing your property if you'll be changing your mind in three weeks. Six months is common, but what if homes in the area are selling in 60 days? A three month listing should give her the time she needs. If she hesitates, assure her that after three months you'll re-list if you're satisfied with the job she is doing.
What if I am not satisfied?- Ask if you can cancel the contract. They can effectively cancel the contract by no longer trying to sell your home, and yet you have no such out. Point that out and their broker may agree that with written reasons and two week's notice you can cancel the contract. Get this in writing.
How many homes per year do you sell? - Many agents sell fewer than ten homes per year. If these are low-priced homes, and thus low commissions, they aren't making too much money. The problem? He may skimp on advertising (their brokers often pay only for very limited advertising of your house), because he's short on cash.
Find a real estate agent that knows how to help you with your goals.
Steve
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