Real Estate Investing Basics

5 Key Steps In Hiring A Real Estate Agent

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15 Articles Written

I am always amazed when I see the typical real estate agent do their one deal of the year. Mostly, their customer is a family member who felt compelled to work with them because after all, "it's family." But what about all of the people who just work with the first agent that they find?

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When I see one of these (I’ll just say less than stellar) ill-prepared agents just dragging their customer to hell and back, I really have to wonder why the customer didn’t do a better job of agent selection. It’s not like the tools aren’t available to figure out some basic background information on every productive agent. Funny Real Estate Agent Video

But if you are a professional real estate investor, you better have a much smarter way to hire a real estate agent.

First things first, I am a real estate agent so my opinions are biased. But I also have been a real estate investor for  nearly 20 years, so I know a thing or two about how to screw things up when buying, selling, or turning a transaction. Most of these mistakes can be prevented by hiring a great real estate agent, and this can be done by following these general principles.

The 5 Key Steps In Hiring A Real Estate Agent

  1. Determine Your Goals First – Do not hire a real estate agent by default. What I mean is don’t call on a home, meet an agent, and then just start working with them. This common practice leads to more heartache and more lost momentum for investors than any other practice that I have seen. Write a plan first. Determine your specific goals, whether buying or selling investment property (or both). Make sure your plan is simple, but thorough (a good test is give it to one of your children and ask them to tell you what it says). Remember the old adage, “nobody plans to fail, they just fail to plan.”
  2. Do Your Research – Once you know what you want, go to Google and start a search with a focus on the attributes that you know you want in your real estate agent. If you cannot find them on the web, then they most likely are not wired into all of the resources that will help you optimize your returns. There are some great traditional agents … who are now retiring. Make sure your agent is somebody who is linked in to all of the modern real estate technologies.
  3. Demand The Best – This might come as a shock, but you typically pay the same for a crappy agent as you would for a great agent (in terms of commissions, not in returns!). The best real estate agents are very busy, and they will demand your loyalty on each specific transaction. If you have done your research, you should embrace working with an agent who requires a buyers brokerage agreement. Most do not (and most are not very good!).
  4. Nothing Lasts Forever – This is a sad fact of life, buy most relationships are not forever. If you feel that your agent is not giving you 100% attention and service, get another one! While there are only a handful of really good agents in your market area, you need to know that your agent values your long-term business and will ensure that your investment decisions get full attention.
  5. Pay Attention – Even great performers have a lapse. Create a checklist that you use every time you buy, and create one for every time you sell. As you become more experienced in your real estate investing, your lists should grow to include “all the ways you can screw things up.” Needless to say, I have a pretty long list :).

If you follow these basic rules for hiring a real estate agent, you will end up being a much more successful real estate investor. Fewer mistakes in the transactional process will most likely be a major part of your long-term ROI. Finally, whether you invest full time or just most of the time, make sure you surround yourself with the best minds in the business.

    Sherry Swift
    Replied about 9 years ago
    Joe, I agree with you. As an agent I’m surprised how many people don’t want to sit down and interview the agent that might be assisting them in one of the biggest purchases they make in there life time. Or at least perhaps the most expensive. I like to interview the buyer or seller to see if we are a good match as not everyone can work together. We all have different styles and at times they don’t match and it’s best not to work together. Once I get through the interview and we both agree to work together than I give it 110% as I want repeat and referral business as well as I want to treat them as I would want to be treated if I was the buyer or seller.
    Joe Manausa, MBA
    Replied about 9 years ago
    Thanks Sherry. The “fit” between buyer and agent is crucial, perhaps we will see more buyers being smarter after the results of the last boom market.
    Jean Philippe
    Replied about 9 years ago
    Very nce post It’s pretty same in France Reply Report comment
    Jean Philippe
    Replied about 9 years ago
    Very nce post It’s pretty same in France Reply Report comment
    Joe Manausa, MBA
    Replied about 9 years ago
    Thank you Jean Philippe, I have always been curious about the real estate market in Europe.
    Jean Philippe
    Replied about 9 years ago
    Very nce post It’s pretty same in France
    Bill Gassett
    Replied about 9 years ago
    This is certainly a topic I am passionate about. It amazes me how consumers make their choice when picking an agent to work with. On many occasions it is who tells them what they want to hear!
    Joe Manausa, MBA
    Replied about 9 years ago
    Thanks Bill. I have always found that most buyers do not even think about picking an agent, they are more focused on finding a home.
    Nick Seevers
    Replied about 9 years ago
    I’m amazed at the amount of agents that don’t use buyer brokerages. This not only helps the agent, but also the consumer. At least here in California there are certain requirements the agent is required to perform or the buyer can legally fire the agent and get out of the contract.
    Joe Manausa, MBA
    Replied about 9 years ago
    Amen Nick! It’s the only way to properly create the best experience for both the agent and the consumer.
    Kaye Dennan
    Replied about 9 years ago
    Hi Joe I have been a real estate agent with my own office and now semi-retired. Over the years it constantly amazed me that salespeople expect to have a career in real estate but would not put themselves out to learn about real estate investing as part of their training. There are so many intricacies that apply to investing that do not apply to home purchasing, but most never seemed to get it. I guess that is why they did not last!
    Joe Manausa, MBA
    Replied about 9 years ago
    I agree Kaye. Most agents are not qualified to help an investor, unfortunately most beginning investors do not take the time to find the right agent.
    Jeff Brown
    Replied about 9 years ago
    I love real estate agents who fancy themselves as ‘trained’ to handle investors too. When I still worked in my local San Diego market (I’m coming back now.) it was like taking candy from babies. I look forward to more of the same. You’re absolutely on the money, Joe. Good stuff.
    Joe Manausa, MBA
    Replied about 9 years ago
    Thanks Jeff. Once you get the word out, you should be very busy.
    Chris
    Replied about 9 years ago
    Hi Joe, Good list! I really feel that #2 is a big one. Research, research, & more research. Like you suggested “Google” your agent, does he/she have a Facebook page, is he/she using Twitter, are they actively promoting themselves online? These are all important things to consider when looking for the right agent.
    Joe Manausa, MBA
    Replied about 9 years ago
    Thanks Chris, I agree. Google will tell you everything about an agent, if nothing is there, that too is telling you everything about an agent.
    Christopher Somers
    Replied about 9 years ago
    A lof of our investor clients love the fact that we are investors too so perhaps when the investor starts speaking with the agent they can ask the question if they own any properties or do any buying and selling themselves. It is nice when agents and investors (clients) are on the same wavelength.
    Joe Manausa, MBA
    Replied about 9 years ago
    Amen Christopher. There is nothing like experience as a teacher.
    Joe Manausa, MBA
    Replied about 9 years ago
    Amen Christopher. There is nothing like experience as a teacher.
    Matt Mathews
    Replied about 9 years ago
    Thanks Joe-I needed that! Seems like I was the only one here on BP, for a while who spent most of my time making comments, defending the need for Investors to find a Mentor/Agent who had Investment experience and could talk their language. Too many Investors are either told that they don’t need an agent or that WE don’t exist! Although we are few in number, we’re out there-you just have to find us. I also find Investors, especially newbies as well as others, making the same big mistake as first time buyers. They find a property and the first thing they do is call the Listing Agent who works exclusively for the Seller! My Advice is: “Hire one for your Side”.
    Joe Manausa, MBA
    Replied about 9 years ago
    Good advice Matt. I understand why most investors don’t want “most agents.” But you’re right, they should take the time to find someone that can really help them out.
    Jaz Cook
    Replied over 8 years ago
    Great Post! I like #3 Demand the best.
    Danni Black
    Replied over 3 years ago
    I really like your tips about determining your goals and doing your research! My husband and I have been thinking about hiring a real estate agent to help us with selling our home. I think that these tips will really help us to find someone that will guide us through this whole process. Thank you for sharing!
    Aria Wellington
    Replied about 3 years ago
    I really like how you said that doing your research is a great place to start when it comes to hiring a real estate agent. My husband and I have been thinking about moving for a while now! We have been looking for houses online and in our area so we will be sure to keep these tips in mind. Hopefully, we can find a great person to work with, thanks for sharing!
    Jade Brunet
    Replied almost 3 years ago
    It is good to know that one should make sure the real estate agent is someone who is linked in to all of the modern real estate technologies before hiring. Being completely up to date with everything happening in the real estate world would be beneficial. Another thing to consider would be to find a realtor with great negotiation skills to make sure you get the best possible outcome when it comes to certain negotiations.