Are you looking for the elusive creature they call the “Investor Friendly Agent”? Have you searched Zillow and Realtor.com only to find imitations? Is the realtor your best friend’s nephew’s daughter’s mom recommended getting frustrated with your multiple low ball offers? Did your current agent give you the “deer in the headlights” look when you told him “It has to at least match the 1% rule?” Have you simply given up on finding this mythical being?
Well, you are in luck because I am going to give you the “Definitive Guide to Finding an Investor Friendly Real Estate Agent”!
OK, all kidding aside, there is a very real difference between a Traditional Real Estate Agent (TREAfor short) and an Investor Friendly Real Estate Agent (IFREA for short). If you want to have any success in real estate investing; ESPECIALLY if you are investing out of state (like say Kansas City….), you MUST find a REAL IFREA!
So how do you find a possible IFREA, you ask?
- You can start by asking other investors who they use.
- Call the local real estate association and ask them for a recommendation.
- Most brokerage websites have a list of their agents along with a short bio. Look for the bios that talk about working with investors.
- Call the local REI clubs and ask for references.
- Search Bigger Pockets for agents that provide intelligent responses to forum posts and blogs. “PM me, I’m an agent and I can help” is NOT an intelligent response!
O.K., so now you have a few possible candidates, but how do you know if they really have the knowledge and experience to be an IFREA? After all, most agents don’t turn down business, so if you just ask them if they work with investors, chances are they will say, “Yes”.
Here are the questions you need to ask along with the answers you need to receive to know for sure that you have a true IFREA:
1. Are you a Full Time agent or a Part Time agent?
A. You only want a Full Time agent! Part Time agents are part time because they either are newbies and they are not yet making enough income to support themselves or they are part time because they are not able to make enough income to support themselves. Either way, you are settling for less than the best if you go with a part time agent.
2. How long have you been licensed?
A. I wouldn’t work with an agent who has had their license for less than 4 years UNLESS they are working on a team where the team leader has more experience and will be available to help, if needed. Don’t forget to verify their answers! Licensing info for every state is available to the public and in most cases is available online for free. Just Google the state you are investing in and “real estate commission” and you should be able to quickly find out if your agent is lying about their experience.
3. What percentage of your business is done working with investors?
A. The higher the % the better. If the answer is 60% or less, I would find another agent. If it was my money being invested, I wouldn’t settle for any agent doing less than 85% of their business with investors.
4. Approximately how many investor related transactions have you completed in the past year, and in your entire career?
A. Obviously, the more the better. Don’t be surprised if they don’t know the answer off the top of their head. Busy agents don’t have time to stop and count how many transactions they have done; but they can still give you an idea. The average number of closings per residential agent, per year, across the country is always around 11 or 12. You certainly don’t want average but you definitely don’t want below average!! If you want a residential IFREA then you should be looking for somebody that closes at least 20 deals a year. If you want a commercial or multifamily IFREA, the number of transactions may be much lower, but the dollar amount per transaction should be much higher (in any market).
5. Follow up to Question #4 – Show proof of your transactions.
A. This one might startle the agent as they arenât used to people asking them to prove their statements! After all, we are sales people and everyone knows that sales people tend to embellish sometimesâ¦. Simply ask them to print off an MLS report showing how many transactions they have closed. It is the same thing a broker will do when he is trying to hire an experienced agent from another firm. This will work well for transactions recorded in the MLS, but your agent may state that âmost of their deals are done outside of the MLSâ. This can be true; especially for commercial and package deals. If this, in deed is the case, then simply ask to see a few of the contracts. Every agent should be keeping a copy of all of their transactions electronically so emailing a few docs over isnât a major request. If the agent is unable to prove or unwilling to prove their answer to Question # 4, then find another agent! Most likely they just got caught in a lie!!
6. Are you an investor?
A. This can be a tricky question. If the agent answers “Yes”, then you need to follow up and make sure the agent won’t be keeping all of the “good” deals and leaving the bad ones for you. At the same time, if an agent hasn’t invested for themselves, then how will they truly know all of the ends and outs to investing? Look for an agent that has invested in the past or currently is investing, but one who won’t be competing with you for deals.
7. What kind of education/certifications/memberships do you have?
A. I wouldn’t get too caught up in this question because real life experience is way more important than fancy framed certifications and degrees, but I do think that a really good IFREA will have some form of education above the high school level needed to get your real estate license. Look for an agent who at least has a 4 year degree. Certifications related to investing are always a plus as are memberships in real estate related clubs. I would also suggest putting more emphasis on a broker’s licenses as opposed to just an agent’s license.
OK, now you know how to find a real Investor Friendly Real Estate Agent. So what are you waiting for?
Go build your own winning team… and good luck investing!
Contact ORENDA Real Estate Services
For more information on the Kansas City Real Estate Market, or to learn more about how you can increase the value of your investment property, contact us today by calling (816) 355-4242 or CLICK HERE to connect with us online.