{"id":59911,"date":"2014-07-22T12:30:17","date_gmt":"2014-07-22T18:30:17","guid":{"rendered":"https:\/\/www.biggerpockets.com\/renewsblog\/?p=59911"},"modified":"2021-03-16T10:21:47","modified_gmt":"2021-03-16T16:21:47","slug":"2014-07-22-4-reasons-shouldnt-blindly-take-advice-realtor","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/2014-07-22-4-reasons-shouldnt-blindly-take-advice-realtor","title":{"rendered":"4 Reasons You Shouldn\u2019t Blindly Take Advice from a Realtor"},"content":{"rendered":"

Don\u2019t be fooled by the title.<\/p>\n

Let me start out by saying I love working with Realtors in my business; that is certain Realtors.\u00a0 What do I mean by that?\u00a0 \u00a0I like working with those agents that have also done some investing themselves.<\/p>\n

Before you take advice from a Realtor in your investing business, you should know that all Realtors are not created equally. Like folks in any other profession, some are better than others.\u00a0 When it comes to working with seasoned real estate investors, I have found that the great majority of them have no real understanding of what we do and why we make those annoying low offers.<\/p>\n

The 4 Reasons to Use Caution When Taking Advice From a Realtor<\/h2>\n

Here are 4 reasons to use caution before you take any advice from a Realtor when buying investment property.<\/p>\n

1. Most of Them Only Have “One Hat”<\/h3>\n

In most states, there are strict laws about what Realtors can and cannot do.<\/p>\n

They have to attend some type of training then take (and pass) a test.\u00a0 They learn about the law and how they must conduct themselves in the course of doing business.<\/p>\n

It\u2019s all laid out for them; their method of doing business.\u00a0 Then along comes a real estate investor and asks them to do things they have never been schooled on. \u00a0What is likely to happen is that they will \u201cfly by the seat of their pants\u201d and you will pay the price later down the road.<\/p>\n

Related:<\/strong> The Real Estate Agent\u2019s Ultimate Guide to Working with Investors<\/a><\/em><\/p>\n

2. You are Likely to Pay Too\u00a0Much for Your First Few Properties if Your Agent isn\u2019t Also an Investor Themselves.<\/h3>\n

This is an important point of distinction.<\/p>\n

A Realtor that is not also an investor probably has no clue how to put together an offer based on the formulas we need to use. \u00a0They don\u2019t know what a good deal even looks like (for us). \u00a0It\u2019s not their fault. They weren\u2019t trained to do this.<\/p>\n

I will take this one step further.\u00a0 In most cases that low-ball offer you need to make will be something they really won\u2019t want to do. \u00a0\u00a0I have actually had agents tell me they weren\u2019t wasting the listing agent\u2019s time by presenting a lowball offer.\u00a0 I\u2019m pretty sure they are obligated to present every offer.\u00a0 This is a sure sign you don\u2019t have the right agent.<\/p>\n

They might have the best of intentions, but they simply lack the knowledge they need to give us good advice in our business.\u00a0 When you are a new real estate investor, you simply assume they have the skills and knowledge to help you which is almost always a mistake.<\/p>\n

3. Just Because They Belong to Your Local REIA, Doesn\u2019t Mean They Are Qualified to Advise You!<\/h3>\n

Don\u2019t assume they know what they are doing just because they are a regular at your local REIA. This was a big \u201cAh ha moment\u201d for me when I finally figured this out.<\/p>\n

When I was just starting out, I became friends with another woman who was a licensed Realtor and a member of my local REIA.\u00a0 I was aware that she was fairly new in the business, but I assumed (incorrectly) that she has certain knowledge and skills that she simply didn\u2019t have. After all, she was at every REIA meeting networking with other investors that were doing deals. \u00a0She spoke the language of real estate investors.<\/p>\n

Our combined inexperience really cost me down the line. I paid too much for my first couple of houses she found for me.\u00a0 Being a complete newbie, I didn\u2019t know what \u201cI didn\u2019t know\u201d.\u00a0 Sure the houses were cheaper than retail, but it was a while before I realized I had made a big mistake the day I signed on the dotted line.<\/p>\n

\u00a04. Don\u2019t Assume They\u00a0Are Qualified To Advise You On Good Neighborhoods<\/h3>\n

Your Realtor isn\u2019t going to have \u201cany skin\u201d in your investing business. \u00a0It won\u2019t be coming out of their pocket if you make a bad decision and lose money on a deal. \u00a0In the end, these decisions are all up to you.<\/p>\n

However it\u2019s vital that your Realtor be knowledgeable about the demographics of the specific neighborhoods you look at when you are just getting started.\u00a0 After all, that\u2019s why you have them on your team.<\/p>\n

They should be able to answer some simple questions about the area such as:<\/strong><\/p>\n