A real estate agent is one of the most useful resources for a real estate investor. An agent’s job hinges on being knowledgeable about the real estate market. This knowledge includes property that is available for purchase, the exact thing a real estate investor is looking for.
When you are working with a real estate agent, it is important that you get him or her to understand that you are not the typical buyer or seller. Most real estate agents, if they have worked with investors previously, will already be aware of this. However, there might be some instances that you have to educate the agent on the way real estate investors look at buying and selling real estate.
Whenever you make a connection with a new real estate agent, even one that is already aware of an investor’s viewpoint on real estate, it is necessary for you to let him know the criteria you use for purchasing investment properties. Doing this ensures the real estate agent will only contact you with properties that have investment potential for you.
Sometimes agents have their own questionnaire forms for you to fill out. In any case, the key information you need to relay to the agent includes the following: the criteria you use to purchase a property, your goal for purchasing the property, whether or not you wish to be contacted about properties outside your criteria and goals, total number of properties that you might purchase at a time, and any issues with financing that you might have.
If you are an investor that primarily works with properties that you can fix and flip, you need to let your real estate agent know the kind of “fixing” you prefer to do with your property. You might only want to do light repairs such as painting, replacing fixtures, etc. Perhaps, you are not one that shies away from houses that need extensive repairs like plumbing or foundation repairs. It is important to let your real estate agent know these criteria as well.
Keep in mind that real estate agents are paid commission based on the price of the property. When you purchase a low-priced property, the agent makes a low amount of commission on this property. Unless you plan on doing the extra work associated with the purchase, like writing up the offers, it is a better business practice to compensate the agent for the time spent working with you. If the agent spends a great deal of time showing you properties, consider negotiating an hourly wage. The real estate agent will see that you value his time and is more likely to notify you with good investing deals.
In your career as a real estate investor, you will meet many people that will be of use to you. The real estate agent is perhaps one of the most important of these. Maintain a good working relationship with agents by being clear on what you are looking for and compensating him for the time he spends working with you.