Behind almost every successful investor is a successful realtor. The realtor/investor relationship is one of the most important bonds within your investing team. Oftentimes, your realtor will hold the key to finding and closing the deals you are interested in. While most investors look for realtors that know how to work with investors, there is another side of the coin. As an investor, you need to do your part as well. Your realtor’s time is money. If you waste it on work that you can do yourself, they will not work as hard for you in the future. Working with your realtor can’t be a one way street. To maximize the relationship, you need to both be on the same page. Here are some tips to help get the most out of working with your realtor:
1. Know Your Goals: The more defined you are with what you want out of the business, the easier it is for your realtor to find it. If one day you want to look at all multifamily properties and the next only condos, you will frustrate your realtor. Your portfolio can be diverse, but you need to know your goals. The first thing you should do upon meeting a new realtor is talk about how you see the business. Map out both a short and long term plan. Discuss areas you want to invest in and how you plan to do it. By showing your realtor that you are serious about the business, they will go the extra mile for you. There are many investors that walk into realtors offices and want to start buying property, but have no idea what they are doing. They end up driving their realtor crazy and they eventually end the relationship. The better you know what you want from the business, the more likely you realtor can help you get there.
2. Knowledge of the Market: Not every successful realtor works well with investors. Good investment deals require a specific skill set for the market. When first meeting with a new realtor, there are some questions you should ask. Find out how well they know the market and what experience they have had with investors. Ask if they are comfortable with short sale, foreclosure and banked owned deals. You don’t want your realtor to have multiple investor contacts that they work with. They should have experience, but not multiple investors they have worked with for years. There is nothing wrong in working with a new realtor that is hungry for business -as long as they are willing to learn about investment deals and distressed property sales. You can find a good realtor in spite of age or experience if they have knowledge of the market. It is important not to work with the first new realtor that presents themselves. Take time to make sure you feel comfortable and there is a good fit.
3. Do Your Homework: Realtors work on commission. This means that every hour of the day is an opportunity to make money. If they spend a few hours at properties you have no interest in buying, you are essentially wasting their time. There is a certain amount of work you should do on every new deal. Instead of asking to see a new listing, make sure it is a deal you really want. Know the area and neighborhood of the property. Find out information about taxes, style and square footage before you jump the gun. There is a lot of information that you can find online or from the listing sheet. If your realtor shows you properties that you really want, they will feel their time is not being wasted. Do your homework before you reach out to your realtor. The easier you make things for them the harder they will work for you.
4. Be Ready to Act: Are you ready to make an offer if you find a property you like? Before you meet with any realtor you should have your finances in place. This means having an updated prequalification letter or proof of funds ready to go. It also means knowing what you want out of a property and capital needed for improvements. You can perform your due diligence on the property, but when it’s time to act you need to be ready. With most bank owned deals time is of the essence. The longer you wait to supply documents or get the deal to closing the greater chance you will lose the property. If you do this enough times, your realtor will lose confidence in you and stop sending you deals as they get them.
5. Communicate: As is the case with any other successful relationship, communication is key. Your realtor should have a good idea of how you are going to conduct your business. If you plan on making lowball offers, they should know this. If you have a question you should feel confident your realtor will respond quickly. By being as open and honest with the purchase price range and investing area you are interested in your realtor will know what to expect. You should have an idea of what is expected out of you as well. Your realtor may not be able to show you properties some days until after hours. As long as you know this up front, you shouldn’t have a problem with it. You and your realtor are a team that can be successful for many years to come. Get as much on the table as possible before you get started.
Working with the right realtor can change your business. Understanding that it is a team effort will help strengthen the relationship.