Real Estate Investors and Real Estate Agents: Building a Partnership that Works
It’s not often that a real estate agent works with a real estate investor, but when the pair clicks together, rest assured that profit will rain like magic. This is the reason why if you’re a real estate investor, you may want to reconsider your long-held beliefs about real estate agents because a real estate agent can help you uncover valuable…
…pieces of information, negotiate with bank representatives, thus creating more tempting opportunities for you.
The most common hurdle in working with real estate agents is that they aren’t aware of your property acquisition needs. Real estate agents sell at retail and the tiniest of deviations from what they consider as the correct strategy can threaten or even destroy your working relationship. But real estate agents can work wonders for you if you tell them exactly what you want to do.
Here’s how to make a real estate agent work for you:
Chatting followed by a thorough discussion of what needs to be done helps establish a solid working relationship with a real estate agent, especially one who has never seen or worked with a real estate investor. Go get a cup of coffee together or have lunch so you have plenty of time to explain your goals, investing strategy, and your other needs to him. The real estate agent would be able to express his needs to you, too.
Considering recent history, today’s market conditions can’t be more perfect to form a mutually profitable long-term relationship with a real estate agent. It’s pretty well known that retail buyers are already gone. Combine this with the dipping prices and you’ve got retail investors hurtling here and there to buy and buy. This means that you can reap huge profits if you work with a real estate agent who knows exactly what you want to do and get.
Investors usually avoid real estate agents because they don’t want to shell out for real estate commissions. There’s no problem with that but you have to understand that there are a number of locations out there today where you don’t have a choice. The list of states that implement legislation to protect consumers from entities who want to take advantage of them is growing. Oregon, for example, has passed a couple of laws that require real estate agents to participate in any home equity transfer deals. Judging from recent news, California and other states may be the next to put their names on the list.
Complaining and debating these laws likely won’t get you anywhere, so it’s better to just accept them and make your next move. Using a real estate agent to negotiate for you in short sales is a very effective strategy. When it comes to short sales, it’s highly possible that you don’t know the necessary steps to take when you’re working with a lender for a first time. Remember that there are also a number of lender loss mitigation departments that implement their own procedures, policies and rules. A little violation of protocol and your offer may be delayed, or worse, rejected.
In contrast, real estate agents are very close to bankers. Banks usually coordinate with real estate agents to conduct traditional purchases, so the institution and the system favor them very much. In fact, there’s a greater chance a bank will consider an offer if it comes from someone whom they understand clearly and who shares their mindset. The bottomline is that a good real estate agent can help put your offer in front of a lender, so you can get some answers right away, and close more deals in a shorter period of time.
Another bonus you get when working with a real estate agent is valuable research. Once you and your real estate agent have developed a “I scratch your back, you scratch my back” type of relationship, he can share with you bits of information that would take a considerably longer period of time for you to unearth. A real estate agent can provide you with MLS data and comps. There’s one thing that’s very important to remember in all of these though: be careful not to abuse your relationship with your real estate agent.
To conclude, working with a real estate agent opens up opportunities to keep on earning money even when the retail residential real estate market is now very saturated. So do not be trapped by your previous conceptions about real estate agents and what they do. Start finding the one who feels right and then build a solid professional relationship with him to reach your goals faster, improve your career, and boost your bottom line.
John has been working as an agent with ERA Cayman Islands for 8+ years specialising in high-end real estate, hospitality and property management. Formerly of Vail, Colorado; John has set down his roots in Grand Cayman. John holds a degree in business law from the University of Saint Thomas.