What Makes a Realtor “Investor Friendly?”
Not all investors like working with real estate agents, some prefer to chase deals themselves, work with the owner directly, or find properties off-market and convince the owners to sell. And sometimes, the feeling is mutual – many agents avoid working with investor clients because they find them tough negotiators who are unwilling to budge in their requirements or they try to rush the process and do the agent’s job themselves.
But more often than not, a realtor and an investor partnership can be mutually beneficial.
As an investor, you’ll have access to properties before they’re listed or as soon as they go live, meaning you’ll be able to make a move much sooner. And since a large part of a realtor’s job is networking, you’ll automatically expand your own network to include other investors, trusted and vetted professionals, and lenders who are open to working with investors, just to name a few.
But how do you know if the agent is “investor friendly?”
Interview them! And make sure they can answer these five questions:
Do you invest in real estate yourself?
If your real estate agent hasn’t been able to find a deal for themselves, how do you expect them to find one for you? Many real estate agents haven’t made the jump into real estate investing themselves and they may not understand what makes a property a “good investment.” Understanding what investors take into consideration, like cap rate, cash-on-cash return, net operating income, and other investor-specific concepts is a baseline requirement. Understanding how those calculations can change and how to optimize the property to bolster those calculations? That’s where the true value lies. You want to work with someone who has done it themselves and been successful.
Do you work alone or do you have a support team?
Many real estate agents spend a fair amount of their time coordinating transactions instead of finding new business opportunities–for themselves and their clients. Try to find out how much time an agent spends on networking, finding new clients, and searching for properties instead. At Ridgeline, we have a full support team that handles marketing, closing coordination, and operations. This allows us to focus on our clients and our business.
Can you connect me with vetted pros like contractors or tradespeople?
By nature of the profession realtors will come into contact with local professionals of all kinds and they will often know about the quality of their work and their reputation for getting jobs done on time and on budget–things that matter a lot to investor clients. I keep a list of trusted professionals that I hand out to my clients and I know just who to call first.
What is your sale-to-list ratio? Meaning, what is the difference between the asking price and the sale price for the properties you’ve sold to other investors?
A good agent will track their numbers and be able to tell you about the “deals” they’ve helped their clients find. For my clients, I track the number of properties we see, the number of offers we write, asking price of the property, and final sold price, among other things. This helps me review my own work and find areas where I can improve.
What fees do I pay as a buyer working with you?
If you’re looking for an investment, every penny needs to be accounted for in your calculations. Knowing what the final costs are for closing costs, taxes, and realtor fees is critical. If you’re investing in a state that isn’t your normal area, fees and who pays them can vary. Here in Vermont, the buyer’s agent is typically compensated by the seller when both parties are working with agents. But if the owner is selling without representation that might not be true. Always work with an agent who is up-front about their compensation in different scenarios and sets those expectations at the start.
