Successfully Working with Realtors
Since over 80% of real estate is sold through realtors, it is important to learn how to work successfully with realtors.
First, let’s look at what an agent can do for us:
- Promptly provide complete and accurate comps.
- Literally unlock the door to potential deals so we can see the property at our convenience.
- Submit all our offers immediately as requested with our amount and our terms.
- Promote our low offers to the seller and other agents, improving our chance of acceptance.
- Help us get the seller to finance the deals.
Realtors can help you find properties using the MLS (multiple listing service). Not only can realtors help you find properties to make offers on, they can also help you obtain information on similar or comparable sales, also known as comps, using the MLS. Comparable sales can give you an idea of what investment houses will sell for. Realtors provide the most up to date and accurate comparable sales. These comparable sales are one of the most important items to know when calculating offers.
Anyone serious about wholesaling or rehabbing properties needs to look at properties that are vacant and in need of work/repairs. Realtors can help you here. Realtors are the only legitimate way to see listed properties that meet the criteria of needing work and being vacant. Here is where a realtor can help promote your low offers to the seller and dramatically increase your chance of getting your offer accepted. Your offer is much stronger if you include as an addendum captioned pictures up close and ugly showing what is wrong with the property. This can make an amazing difference in getting your offers accepted.
While it may seem that all realtors will be happy to work with you, such is often not the case. Eighty Percent (80%) of new agents are out of business within the first year. Worse, some realtors don’t even want to submit offers or give the third degree about your credit worthiness. They do this because they fear doing a lot of work and not getting a sale. You need to train them to work with you your way. Does it make sense to invest in learning how to buy at wholesale and then let a realtor teach you how to buy at retail and they make a big commission while you lose money?
A new investor will often come across to the agent community with what is referred to as “rookie-breath.” The agents think the newbie investor doesn’t know what he or she is doing and will attempt to get rid of them. This is a sign to them that they must do a lot of work with no commission money in return. Further, they see your low offers as an embarrassment in front of the seller who was expecting them to get them “all the money.” Hence, they refuse to submit those offers, don’t return your phone calls, or insist you do things that are difficult, costly or even impossible, such as making a huge deposit and proving you have cash ready to complete the transaction.
Finding good agents, and training them is the first, best, and easiest way to become successful in investing, especially wholesaling. The good news is that even if they don’t want to submit your low offers, they have a fiduciary responsibility to do so. It is not their job to decide the acceptability of offers. They are merely there to submit the offer presented to them and let the seller decide.
You can remind them of their responsibility. You can present the problem to their broker or/and the local real estate association. Do this and see how quickly they decide to submit your offer.
Don’t let realtors get away with submitting your offer verbally over the phone. Remember that verbal offers will never work. Your offer must be submitted in writing to have a chance. Further, you will want to resubmit your offers ever two weeks or so. As high as 75% of the investment deals that are done are either on resubmitted offers or offers submitted as a back-up to a deal that is under contract. Hence, you will want your agent to resubmit your offers.
Finding agents who are also investors can be a great strategy. They see and understand what you are doing. They may even be willing to partner with you on deals. Hence, they will be quick to recognize the value of getting seller financing. Typical Realtors see seller financing as negatively delaying their commission collection.
To find investing realtors just ask receptionists if they have any realtors that are also investors. Then ask to visit with them. Not only are you more likely to get your offers submitted, these realtors can often show you where the bones are buried. Just a little selectivity and training of realtors can dramatically increase your success in real estate investing.