Hi:
I would like to focus my business on Investor Transactions, are there any suggestions?
Thank you.
Hi:
I would like to focus my business on Investor Transactions, are there any suggestions?
Thank you.
A couple things that come to mind to start this discussion off:
- In my experience, investors want agents who understand the basic principles of investing (valuation, exit strategies, analysis, etc).
- Investors don't want to be treated like typical buyers/sellers who need their hands held...they want someone who will be their partner, be brutally honest, not sugarcoat the information, etc. In other words, at all times maintain the investor's trust, even if it means delivering bad news.
- Be prepared to play the role that the investor wants you to play. Some investors will want you to take the lead on transactions, while others will just want you to write up offer, submit counters, etc. Don't assume what the investor wants...actually discuss it.
- Be prepared to provide incentives for long-term relationships. If you're normal commission on a sale is 3%, be prepared to offer a long-term investor client somewhere closer to 2.0 - 2.5% for their repeat business.
- Make sure you provide GOOD comps, and it's always better to provide more information than not-enough information. Many investors want you to provide the raw data, but want to do the analysis themselves; be okay with that, but also know when to throw in your two cents and bring them back to reality.
- If you can provide any design/staging consultation, that's a bonus. Many investors are guys, and don't know how to pick a paint color, let alone how to furnish a house for sale. If you can help, you're a huge value-add.
J Scott, Lish Properties, LLC
Telephone: 770-906-6358
Website: http://www.123flip.com
http://www.123flip.com
Here's what I would expect from an investor-friendly agent:
1. Low commissions. The 3% commission was created for retail clients where a significant amount of time goes into finding clients and there are significant periods of no revenues. I pay my agent 0.5% instead of 3%. If you think that is low, consider that my agent, based on my volumes, will be making a comfortable 6-figure income annually. And without the stress of trying to figure out how to get the next deal.
2. As Jason said, investors expect an agent to think like an investor. We don't want people on our team who do not buy into our investor mindset and we do not want to struggle to convince our agent to do things creatively. An agent who does not completely buy into the investor's philosophy will not be very good at negotiating with potential buyers.
3. The agent has to be a good deal-maker. For a retail client, a 2% difference in final closing prices may not make a big difference. For us, that can add up to hundreds of thousands of dollars lost each year. Similarly, letting a buyer go without trying the best to make a deal happen can result in longer hold times, which translaters into lower ROI.
4. Finally, the agent should be very prompt, efficient and effective in correspondence, returning calls, preparing counters, updating the listings, following up with the buyer's lender, appraiser, etc.
If you can do all of this, you should have no problem at all making a high six-figure income with just a few really strong investors as your clients. If you cannot do all of this, you will be like most other agents - trying to figure out how to grow your business forever.
I'll admit, I didn't read the previous two comments but if you want to be an investor friendly agent, forget everything you've been taught.
Well done! You're on the right path :)
You've had some great comments already. An investor is often looking for more of a professional partner that will help in some areas of marketing, analysis, or negotiating.
Understanding the market area is a huge plus. Most investors will have a good idea of their market, but an agent that understands cap rates, comparables, trends or other factors likely to effect the market or a specific property can be an asset.
It can take time for some investors to develop and having the patience to work with them can lead to a long term profitable relationship for both parties.
Ariane:
To get the attention of the investors you will need the following:
1. Know the investment area he/she is working in. Provide advice as needed.
2. LISTEN to what the investor is looing for. I was once looking for land with water. I was shown property with dry ponds and so was not very impressed.
3. You will have to be a top agent working both buyer and seller sides not just isolating yourself to one side.
4. Open lines of communication betwen you and the investor is a must for the success of the partnership.
5. Negotiations - you must be a tough negotiator to get the best deal possible for your partner.
6. Remember that as an agent you are working for a commission. Sometimes the commission becomes more important than the wants and needs of the investor who is your client/partner!
7. If you are working for another Broker - they usually do not understand investors so will not work with any commission cuts. This is a negotiable area, but you have to follow the directives of your broker who flat out states "any commission under 7% comes out of your pocket as I want mine"!
For those that are thinking about getting a license - I try to discourage them as most are just big stumbling blocks between the Owners/Buyers & Investors.
Hope you can get things together and add some investors to your client list.
One of the things I ran into when looking at properties in FL was the realtors there would take another agents listing - stick their business card over the listing agents data and try to pass it off as being their listing. Unscrupulous acts like this is why your dues are so high and NAR spends millions each year combating the negative perspective of the public toward realtors as a whole.
Thank you all for excellent, and great comments. I will be sure to take in all of this information and apply it. I will let you know how it goes.