Using a buyer's agent versus contacting the seller's agent every time and why REALTORS need a special level of TRUST with their "investors"
I'm a licensed broker here in Upstate NY and I'm amazed at the lack of understanding that new investors have when it comes to agency. A close colleague and mentor in the business put it quite simply when I shared my frustrations with time sucking clients who then turn to the listing agent to write an overpriced offer on a terrible investment. He said, "My friend, they don't care if you put steak on your table or hamburger helper"
As someone who points out all the flaws, runs conservative pro formas and struggles to attain REAL deals for my clients, it drives me absolutely bonkers when something like this happens. What the "investor" doesn't realize (but will down the road) is that the listing agent just wants to sell THAT property. They don't care how it compares to anything else. They just have to get the seller and the buyer to come to terms on price, it is completely irrelevant to other opportunities. Sometimes overpriced properties don't sell because the seller is un-realistic about it's value. Enter seller's agent to sugar coat things and sell investments that are more like an anchor for a capital starved young investor.
I'll give a recent example of how this situation may play out for those investors that believe always contacting the listing agent is the best way to "get a deal"
I received an email this morning from a client whom I have previously given much advice on the local market he is interested in, shared resources, shared contacts etc. Lot's of back and forth, a sit down meeting where I paid his tab, etc. In his most recent email he said something like this "I figured I would check with you before I contacted the Listing agent" Great! This is about 1 step better than going behind my back after I've allocated some of my most precious resource to you (my time). Here is a case where though I can obviously see either their naivety on how I make my money, OR just the plain downright inappreciativeness that some people have. I've learned a lot in this industry since I started investing about a decade ago. But what I think is the most important aspect to building a successful real estate business is appreciating those that help you along your way. Had I treated my team the way some of these new "investors" do, I would not be where I am. I can only hope that this thoughtlessness will come full circle as they struggle to find deals and rely on selling agents so they can "get a better deal"
The jury is still out on this client. We will see how he responds to my email. In this case he is interested in an apartment complex that is a 1/2 way house for convicts. Do you think the LA would disclose that info? Probably not. And I've viewed the LA's pro forma. Not even ball park close to my pro forma on the same property... Plus the insight that comes from a buyer's agent on other opportunities that are comparable... my goodness, from my perspective a buyer's agent is a no brainer!!! What is it that makes the "investors" think that 3% of an unsound investment = a great deal?? I just shake my head....
I would like to thank all my clients who understand the importance of having a dedicated buyer's agent, and who do respect my time and effort. Not all agents are created equally, and when you disrespect a professional that takes his job seriously by being a thoughtless selfish "investor" you ultimately just hurt yourself. In the world of agency it is better to be friends with the top agents, rather than known as a snake. What seems like a huge world of investment get's a lot smaller as you head to the top. Even the majority of Broker's suffer from poor business practices, bad debt, and laziness. What things seem on the surface are often an illusion.
Sorry for the rant, I do have thick skin and brush off those that act in such a manner without care. However, I never forget who they are. You're either a game player, or business person.
Hopefully you can see the difference and choose to be the latter!
