When you're buying property, Realtors work for you free, so why not take advantage of this tremendous resource? Let them find properties, make offers, and help negotiate your deals—and get paid by the sellers, so their services don't cost you anything.
If you're going to be investing in various types of real estate, you may want to have more than one Realtor on your team. Good real estate brokers specialize in particular property types and geographic areas. I have one Realtor who handles my high-end residential development projects, another who handles moderate residential investment properties for me, and a third who handles my commercial deals.
Just because someone has a real estate license doesn't automatically make her the right agent for you. In fact, probably 90 percent of the licensed real estate agents out there are wrong for you. The average real estate agent in the United States makes less than $6,000 a year. Do you want someone who can't do any better than that trying to help you become wealthy? Of course not. What about the top producers, the real estate agents who earn six-figure incomes? It may surprise you to know that they're not the answer either. The agent making that kind of money isn't likely to have the time to work with you personally; she's probably busy with her own deals and with the investors she's already built relationships with over the years. What you want is the agent who will eventually become that top producer.
Here's how to find a Realtor who belongs on your Power Team. Select the area or areas in which you want to invest. You'll learn how to do that with the specific types of real estate discussed in later chapters. Drive through the area and write down the name on every real estate sign you see. Pick the top three offices and call them. Tell the receptionist you are a real estate investor and want to speak to the broker (or owner of the office).
When you get that person on the phone, say, "I'm in the market for income-producing real estate. Give me the name of a good, aggressive agent, someone who has been with you at least a year—don't give me the floor agent." In real estate offices, the agents take turns with floor duty, which means they handle the calls that come in from signs, ads, and other sources.
Sometimes the person on floor duty—the floor agent—is very competent; at other times, the floor agent is new or doesn't have the experience you need. Dealing with the floor agent is a gamble you don't have time to take.
Once you get an experienced agent's name, call her to set up an appointment for an introductory interview. This interview needs to be in person. Sure, you could do it faster over the phone, but you'll be wasting your time, not saving it. A face-to-face meeting allows you to do more than get answers to your questions. You'll be able to see the agent's working environment, get a sense of her operating style, and decide if the two of you can work together compatibly.
Remember, you're not locked into working with one real estate agent for life. If you are going to be investing in different types of property, you'll want agents who specialize in each area. And if you have been using an agent who has a change in attitude for whatever reason and you're no longer satisfied with her service, let her know how you feel and start looking for someone else.
When you sit down for your introductory interview with a real estate agent, here's what to ask:
How long have you been in the real estate business? In most cases, three to five years is a good range because it indicates experience and a track record, and an agent who is probably still flexible in her approach.
Do you specialize in any type of real estate and/or any part of town? Successful real estate agents specialize, and you want one who specializes in the type and location of the real estate you want to buy.
Do you depend on real estate to make a living? You don't need a parttimer who is just doing real estate on the side for pocket change; you want someone who is hungry and depends on commissions to pay his bills.
Will you give me references? Talk to a few of the agent's other clients to find out how the agent is to work with.
Are you willing to put in the time to help me find the right property? How much time do you have? Listen to the nonverbal answer as well as what is actually said, and decide if the agent is really willing to invest his time in you.
Do you have any banking or other funding connections? Find out if the agent can help you with getting your deals financed.
Is this a good time to buy? Why? What is your opinion of which way the market is headed? It's always a good time to buy, but the answers to these questions tell you a lot about the agent's general attitude and overall market knowledge. A negative agent is poison; you want an agent who is positive but also realistic.
Do you own any real estate? He should. If he doesn't, why should you trust his "expertise" on buying and selling property?
How many properties do you currently have listed? You don't want a "listing specialist"; you want someone who closes deals. The ideal agent for you shouldn't have more than 12 to 15 listings, and if the market is hot and properties are selling fast, it's OK if he has none.
How many properties did you sell last year?The agent should be closing on three or four a month.
Can you be flexible in how you work with your broker? Find out if the broker will listen to new ideas and try different approaches in finding, negotiating, and closing deals.
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This book makes it easy to not only buy a home, but figure out everything that you need to do, even get a loan. In simple and easy to understand language, it talks about where you should buy a home, what to look for in a home, how to find a home, how to get an agent, how to get a mortgage and more. This is a step by step process that you, a new home buyer, can use to purchase a home.