It’s really one of the most common things new investors are looking for as they go about finding deals.
And yet, I have never seen a definition of an investor-friendly agent! I think what everyone means when they are looking for an IFA (that’s my handy new acronym for the rest of the article) is the right agent to help them achieve their goals. Aren’t we all!
One of the main assumptions I think investors make is that they want an agent who knows investment properties (and is most likely an investor themselves). The question is: why?
Who Is an Investor Friendly Agent?
In my humble opinion, based on my experience, this is what I think investors mean when describing the perfect IFA:
An investor friendly agent is a licensed real estate professional who has experience with investment properties, has worked with investors, and has knowledge of the local market. Said agent will be an investor, as well. They will help find deals, analyze them, make offers, and sell properties as necessary.
This seems reasonable enough, right? Sounds like every investor’s dream agent. But let’s revisit the previously mentioned question, “Why do I want this type of agent?”
Get Clear About Your Goals
When it comes to real estate investing, many people have trouble picking a niche or deciding how to go about purchasing their first or second property. I always come back to, “What are your goals?”
If you have clearly defined goals and a plan to get there, a lot of these other questions (and sometimes excuses) go away.
When you’re looking for an IFA, start with your goals. What is your plan to get where you’re going? How does an agent fit in?
If you’re looking to buy single family, cash-flowing rentals in a specific market, then this will help inform you of the type of agent you’ll need. If you’re looking for houses to flip, then you actually might need the skills of a different IFA.
Avoid Asking the Wrong Questions
A lot of consumers and investors make the mistake of going with the first agent that shows them a house. While this can be an indicator of hustle and competence, it can also mean negative things (like desperation).
Instead, it’s important to interview agents first. Let’s dig into some questions investors think are relevant but are actually the wrong ones to ask.
Don’t Ask: Are You an Investor?
Again, the assumption investors make is they need an agent who is also an investor. Why is that the case?
Personally, I’d almost prefer that they’re not an investor. I don’t want to be in competition with my agent for the same properties. I’ve heard of cases where agents cherry pick the best deals (usually before they even go to market) and then push their investor clients into less favorable MLS deals.
Wouldn’t it be better for you if your agent gave you those sweet off-market deals instead of keeping them?
Related: 7 Signs of a BAD Real Estate Agent
Don’t Ask: How Long Have You Been in the Business?
I think this is pretty irrelevant. Many people think you need to go with a super experienced agent. While sometimes this is helpful, let’s look at it from a broader perspective.
If an agent is “experienced,” they probably have many repeat clients and lots of referral business, are quite busy, and are probably doing just fine financially. Are they really going to work hard for you to find that severely distressed property that will only pay them a whopping $1,500 commission?
I’d rather work with a newer, hungrier agent who’s looking to build their business. They’re more likely to have the time to help you, they’ll go the extra mile, and they want to earn your future business.
While they may be less experienced, these newer agents tend to lean heavily on their managing broker for help, advice, and resources. It’s kind of like you’re getting two agents for the price of one.
Don’t Ask: Can You Help Analyze Deals?
Don’t be lazy, guys. Your agent shouldn’t be analyzing deals for you. You should be running all your own numbers.
Of course, you can lean on them for certain information, like local rents, comps, etc. But these you can also find on your own using Rentometer, Craigslist, Zillow, etc.
Don’t Ask: Do You Have a Deal for Me Right Now?
Even if they did, why would they offer it up to you if you haven’t proven yourself as a closer yet. Agents don’t get paid until closing, so they’ll tread carefully until you can prove yourself to them as a serious buyer. Have your financing lined up, know your criteria inside and out, and don’t waste their time.
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
Ask These Questions Instead
Here are some questions you’ll definitely want to keep in mind as you interview IFAs.
Do Ask: How Do You Find Deals For Clients?
If an agent is only going to set you up with an MLS feed based on your criteria, just understand that from the beginning. Bonus points if they can score off-market properties for your through their network or other marketing they do.
Do Ask: How Do You Communicate?
This is critical and can ruin a relationship if done poorly. Communication styles vary from person to person. For example, when I was an agent, I noticed that clients would tend to lean on one form of communication over another. Some would prefer a phone call, while others would prefer an email. Many people just want to text.
Once I noticed that pattern, I would ask clients before working with them in earnest: “What is your preferred method of communication?”
I would always do my best to honor their choice if the situation permitted. Make sure you and your agent are on the same page when it comes to communication—both how you’ll be communicating and how frequently.
Do Ask: How Fast Can You Act?
Speed is important in real estate. You never know when another buyer is around the corner, ready to snatch up your deal. So, make sure your agent can quickly write up a contract (preferably using DocuSign or Dotloop) or get you into a property with relatively short notice. Ask them: if for some reason they can’t show a property, can another agent in their office show houses in a pinch?
Do Ask: Are You Working With Other Investors Who Share My Criteria?
Kind of a no-brainer here, but you probably don’t want to be competing with other investors. Plus, it can be really tricky for the agent to represent both parties faithfully.
What Investors Really Need From Their Agent
So, as an investor, what do you really need from an agent? Here are a few things I think are critical.
It’s a very competitive market out there, so give your agent a little grace. You may need to take up deal-finding on your own a little bit. They probably won’t drive for dollars for you or send out direct mail.
But they are usually very well networked and constantly out on listing appointments. Also, if they work for a larger office, they can let the other agents know what you need.
There are some lazy agents out there. Yes, I said it.
Find one who puts in the work needed to make both of you successful.
Like I mentioned above, you need someone who communicates in a way that you like to be communicated with. And they need to feed you information in a timely manner.
Keeping the Deal Together
Don’t buy into the notion that a Realtor just shows you a house, writes up an offer, and then collects a fat commission check at closing. Great agents work behind the scenes to make sure the transaction is as seamless as possible.
Things go wrong—often—and your agent needs to act quickly to find solutions to problems that are bound to occur.
It’s vitally important to find an honest agent, one with integrity. I’ve been tangled up with dishonest agents in the past, both as an agent and as a buyer. It ends up being a huge waste of time and energy.
You also want an agent to have your best interest at heart. I’ve told clients in the past to walk away from a deal for many different reasons. They appreciated my insight.
The best business partnerships have perfect alignment. Just like your car needs to be aligned from time to time, your partnership with your agent needs to have the same goals. If they’d rather be showing clients luxury homes than helping you find a fixer-upper, you’re going to be in for a bumpy ride.
What do you look for in a real estate agent? Would you define agents you’ve encountered as investor-friendly? Does it matter?
Share your thoughts in the comment section below.