When entering the real estate investing arena, you must be prepared to face challenges. Real estate is not as cut and dry as some may think. Winning a deal doesn’t always come down to the highest bidder. The team you work with has more of an impact on your investments than you realize.
Building solid relationships with real estate brokers is crucial if you want to keep a winning investment streak and be the first to know about great deals. Believe it or not, real estate brokers have quite a bit of influence over who wins a property.
The first step to developing a relationship with a broker is understanding what they do and how they can serve you. Let’s cover what a real estate agent is and tips for establishing an alliance.
What is a broker?
A “broker” refers to a real estate broker, a licensed agent with specialized expertise in real estate. All brokers must be licensed. However, not all agents become brokers. A key difference between an agent and a broker is that a broker can work for themselves. Real estate agents that are not brokers are required to operate under a brokerage.
Brokers can do everything an agent can. While agents typically only handle clients, listings, and sales, a broker does more. Brokers ensure all real estate transactions are lawful, all paperwork is accurate and complete, and all capital, such as funds in escrow accounts, are documented and reported correctly.
Each state will have different licensing requirements, but one must adhere to some general stipulations to become a broker.
First, they must be a licensed agent for a certain amount of time. Secondly, they have to be over the age of 21, and third, they must reside in the state where they will be licensed.
What brokers can do:
- Manage funds in an escrow account
- Arbitrate any legal disputes
- Hire and manage real estate agents
- Market a property
- Write contracts
- Represent buyers and sellers
3 tips for building good broker relationships
There are a few key strategies that you can employ to create deeper connections with real estate brokers. The first step is deciding whom you want to work with. Focus on your investment goals and select brokers that will be able to bring you offers that align with your goals. Here are three tips for building relationships with brokers.
1. Meet them in-person
Meeting face to face is something we’ve lost touch with since 2020, but it’s a must in the initial stages of getting to know a broker.
Meeting in person allows them to see you as a real person and vice versa. Start with a quick meet and greet or lunch. Next, tour a property or two with them. This is a great time to discuss your investment goals and the types of deals you’re looking for while establishing a connection with them.
2. Communicate regularly
Provide continuous feedback to brokers. The specific communication channel (phone, email, text) isn’t as important here, as long as it’s one that you both agree on.
It’s essential to keep two-way communication open. Ask questions, give your opinions, ask for their opinion, and discuss ideas.
They are the professionals, after all. Let them know if you run the numbers on a property and decide it’s not the right deal. They will appreciate the honesty, and it will save you both time and money.
Don’t be afraid to speak the truth. Tell your broker precisely why you are not interested in a property or don’t want to accept a deal. Being honest will help them better understand what you’re looking for. In the future, they will bring deals that more accurately align with your goals.
Communication is the core to nurturing any relationship. Periodically give them a call or text to touch base and do your best to respond quickly when they contact you. A broker will stop working with you if they feel that you’re not carrying your load.
3. Come prepared
It’s ok if you’re new to real estate investing and don’t understand all the ins and outs. That is what the professionals are here for. Brokers won’t expect you to carry the ball, but going into the game with a general strategy will benefit all parties.
Take the time to research and set your real estate investment goals. This will help you discover the type of broker you need and aid the broker in understanding how to assist you. Come in with some knowledge of the markets and submarkets you’re interested in. Ultimately, this is your investment. You should be a part of it every step of the way. Learning more about the market will only help you in the future.
Find a Local Agent Today
The BiggerPockets Agent Finder makes it easy to connect with real estate agents who know the local market and can evaluate properties from an investor’s perspective. Here’s how it works:
- Pick your market
- Share your investment criteria
- Match with a real estate agent
The benefits of building a solid relationship with a broker
If you get in good with brokers, you’ll have a higher chance of scoring the properties you want. Brokers present offers to sellers, vet buyers, and recommend which buyer the seller should choose. If you’re going to be on their list of recommended buyers, you need to build a good rapport. Broker services will come in handy, especially if you plan to use 1031 exchange strategies.
Here are a few benefits of constructing a solid connection with brokers.
Access to good opportunities
Building relationships with brokers can open up opportunities that have not yet hit the market. Off-market deals are some of the best opportunities for investors because they eliminate competition and bidding wars that drive the price up.
Knowledge of the area
Building a connection with a broker local to the market you’re in will be a massive benefit. If you’re looking for property in Kansas City, find a local broker who has an experienced understanding of the area and market. A local broker will be aware of state and city laws and neighborhoods to avoid. They also have established relationships that keep you the first to know about upcoming deals. They can also recommend trustworthy property managers and other essential team members, making your life a whole lot easier.
A good broker will have a vetted network of buyers and sellers who are serious about opportunities. They will often have more trustworthy clients and other investors, which will help make the process run smoothly. A vetted network is beneficial when working with 1031 exchange timelines and finding like properties.
Building relationships with brokers is crucial to your success as an investor in real estate. By maintaining stable and long-term relationships with brokers, you’ll have an easier time finding suitable properties, having access to prime or off-market opportunities, and being on the shortlist of trusted buyers.