Everyone who’s investing in real estate is looking high and low for the next killer deal. Some real estate investors argue that they get their best deals by generating their own leads and and that all properties listed on the MLS are overpriced and thus not worthwhile. This begs the question of what value, if any, the real estate agent has for the real estate investor? Here’s a few ways I think real estate agents can be an asset to a real estate investor that does not including emailing overpriced properties listed on the MLS.
How to Purchase Real Estate With No (or Low) Money!
One of the biggest struggles that many new investors have is in coming up with the money to purchase their first real estate properties. Well, BiggerPockets can help with that too. The Book on Investing in Real Estate with No (and Low) Money Down can give you the tools you need to get started in real estate, even if you don’t have tons of cash lying around.
Agents Can Help Locate Relo Listings, Distressed Sales, and Motivated Sellers
Real estate agents have access to relocation listings and other distressed or highly motivated sellers whose listings will sell for 10-20% below asking price or more at times. Sellers will often communicate their desire to sell quickly to their agent and if you, the investor, are able to close quickly with cash you might be able to purchase properties that are listed on the MLS for substantially less than the advertised asking price. Let your local real estate agents know the type of properties or discounts you are looking for and ask them to contact you if the opportunity arises.
Agents Often Have Pocket Listings or Quiet Listings
Tenured real estate agents may have access to pocket listings or quiet listings – listings that aren’t publically advertised but that are still quietly available for purchase. Many times these come from sellers who have already listed and sold a property with the particular agent who now has insider knowledge of that client’s portfolio or from past dealings with investors and clients. For the most part agents only know about their own quiet inventory and not the quiet inventory of other agents. For this reason it is good to reach out to all of the local agents in the community or communities you invest in and ask them to contact you with any quiet or pocket listings.
Agents Have Access to Expired Listings/Withdrawn Listings
Every day dozens of listings expire or are withdrawn from the MLS. Only members of the MLS have access to these properties in real time so ask your local real estate agent to send you the expired/withdrawn inventory and then you can attempt to contact the sellers on your own. You’ll already be able to get the property for at least 6% below asking price plus whatever additional amount the seller was willing to negotiate now that the seller no longer has to pay a real estate commission. You will probably have to have a gentleman’s agreement with the real estate agent providing the expired/withdrawn leads that if you purchase any properties you will list all of the flips with him or her after renovation is complete.
Agents Can Make Great Property Managers
Reliable, experienced real estate agents often make great property managers. Be careful when selecting a real estate agent because there are laws that govern who can manage properties and what procedures must be followed but if you do find an agent that is willing and qualified there is nobody in a better position to handle your day to day real estate issues than an agent who is already dealing with real estate issues on a daily basis anyway. Real estate agents also usually have lists of reliable contractors and other real estate professionals – for more on this see below.
Agents Have Great Contractor Lists
Real estate agents usually have an up to date list of reliable contractors, vendors, lawyers, accountants and other real estate related professionals that a real estate investor can use to help keep his or her real estate investing business profitable. Since real estate agents are frequently giving out referrals and getting feedback they are in the perfect position to know whether or not a contractor is reliable and priced competitively. Obviously the value of this type of information can’t be overstated.
Agents Know Neighborhood Info
With blogging and social media becoming such an important component of the real estate agents daily tasks few are in a better position to know where the neighborhood has been and where it is going, what commercial ventures are coming or going, how the neighborhood association feels about improvements or zoning requests and lots of other information that will help investors decide where and how to allocate risk.
As you can see local real estate agents can be a valuable asset to your real estate investing business in many ways. Making yourself known to real estate agents in the community will help you find opportunities and help you mitigate some of the risks that come with investing in real estate!
Photo: Frederik Heller