Hi there! I am still ramping up toward buying my first property in the Kansas City area where I live. What should I be looking for in an agent or broker partner? What does YOUR agent help you with most?
For example, does your agent pull rental data for neighborhoods faster than a gunslinger?
Are they your sounding board for deal analysis and running the numbers?
Or is their focus on the logistics of buying and selling smoothly?
I want to make a good choice but am feeling some analysis paralysis. The few agents I've talked with seem like yes-men and yes-women all too ready to help because I'm looking to invest in several properties in the near future.
Make sure the agent is an investor first and foremost. Otherwise a good agent should be readily available, personable and ready to hustle. Make sure the agent is also honest and does not push a deal just for the commission. Referrals and reviews are your best bet when working with agents.
@John Kary - I am an agent and KC but I only use my license to invest for our business. (sorry everyone but this isn't a shameless plug) I will level with you, most agents have no clue what you are looking for. It is really tough to find a good investment agent. Find out how many properties they own, how long they have been investing, what location they invest in and what is their criteria or reasoning for investing there. Find out how they work their commission.(most investment agents will work off a set fee instead of a commission. 3% on a 50k property doesn't exactly bring home the bacon)
Find out what their experience is with renovations or working with KCMO codes and regulations.
Best of luck to you! Please PM me if you have any questions.
I am like Dan - I am a broker, but when those marketers call to help me get more buyer and seller leads I tell them I don't want them - they don't get it. I am a broker for my own investing business and I advise anyone investing in real estate to become their own agent as well.
Why - first being a buyers agent or sellers agent for a 3 to 6% commission is not an economically sound proposition. Selling to first time home buyers is awesome because they know exactly what they want - a house in this area, at this price with this many bedrooms. Listing for an owner occupant is fairly easy, as is listing for the investor.
But being a buyers agent for an investor is VERY HARD.
What does the Owner Occupant Want - a very specific property, which is very easy to put into a computer and then go look at and make an offer, yes the market is fast, but for owner occupants not nearly as fast as it is for an investor.
What does the Investor Want - anywhere in the metro and a good deal. Now some agents will get "a good deal" but most will not, and it's hard to put that in a search in MLS. As an investor when I bought off MLS, I put in EVERY PROPERTY in AREAS I bought, period and look at every listing, photo, and text to find the houses that might make a good deal - as an investor, working with an agent, you have to do all the work, the agent can set up the search for everything, but you as the buyer would have to pick and choose and guess what, most buyers will not. The buyers' agent, unless they are brand new and have no clients does not have time. So you might look for a brand new agent and work with them.
Owner Occupant Offers: As an agent, you go look at a few houses and make an offer and negotiate it and usually you end up with a house, at most you make a few offers till you get one on the hook. And the owner occupant is looking for a house to live in with a certain price tag, not a "good deal"
Investor Offers - As an agent for an investor, you go look at a lot of houses, you make a lot of offers, and usually, they are low. So either your buyer is low balling the sellers in which case a lot of offers go nowhere, or it is a hot property with a lot of competition and you the offers again go nowhere. That's a lot of offers to never earn a commission.
Investor Agents Are Not All What they are supposed to be - now this is not the average agent, but my own personal experience. Before I got my own license I worked with a couple of "Investor Friendly" agents, I was new, I took their advice - one helped us buy some good deals, but omited a lot of info and once he made his $40,000 commission he went on vacation and we never heard from him again. Another investor called me because his buyers' agent told him that the house she helped him buy was a great deal - which it was, as it sat for a rental, he wanted to rehab and flip, too bad it was not an area where one would actually flip a property. So, search long and hard for an honest, ethical agent, who will represent your interests and not their commission.
We finally decided being our own agent was the best course
1. full access to MLS so we can set up searches, go look when we want and spend our time writing as many offers low ball or otherwise as we wanted. You could get this with a buyers agent as well, but you might need to pay them by the hour to do so, and once you have done a few deals, possibly cut them in on some profit to keep them interested.
2. run our own comparables, we spend hours on MLS searching - the average buyer's agent just does not have the time, unless you pay them, and giving you access to their MLS is against the rules.
That said there are a lot of good buyers' agents who work with investors - but most have developed a relationship over time and possibly started as a brand new agent with the investor and learned the investors business. Most experienced agents are very very very cautions to taking on a new investor buyer client because it takes a lot of time and effort to build the relationship and start doing deals. Time that that agent could spend on a regular owner occupant buyer and get paid a lot more a lot faster.
Hope that helps and in Kansas City, you will find agents who do want to work with real estate investors who attend the monthly MAREI meeting in Overland Park. Fairly close to Lawrence.
Thanks, @Kim Tucker ! That makes a lot of sense. I can see how working with investors could/would really suck, especially for an agent who didn't do investing themselves or focus on investor clients. I'm starting my search for an agent in the Raleigh area. You've given me some ideas of questions to ask.
You definitely want an agent who does investing themselves or at least has done it quite a bit in the past for buyers/sellers. They have to know how to analyze an investment property which many do not as they don't specialize in it. I am my own agent/broker which is great, but it does take time, knowledge & money to become your own agent. I recently closed on my own 6 plex & it is nice to save the commission, but on the other hand, I also definitely earn that commission when working for investors especially for newer ones.
A referral also helps... but like for me I browse redfin non stop. I mean to the point where it's probably too much haha. My agent is more eyes/boots on the ground for me. If I had to buy a plane ticket every time I found a house I liked I'd be broke. I figure like a PM I am paying them for their efforts in A) looking at property for me (doesn't apply to you since local) B) local knowledge, as is everywhere things in big cities can vary block by block at times C) networking. If you have a good agent they should either know other agents or at a min understand what it'll take to get offer accepted.
The biggest thing I looked for is to make sure the agent is familiar with the type of investment you are looking for. You don't want to waste your time with an agent that primarily deals with single family homes if you are looking for multi units. The more sales they have within your specific market and desired property type the better they probably understand your particular wants. Also if you check out any local meet ups, you can find an investor similar to what you are trying to do that most likely can refer you to an agent or two, they can also give you a heads up on who you may want to avoid as well.
@John Kary Here's a Pro-Tip for you. Offer to pay the agent something in addition to the commission the agent will earn per the listing agreement.
Like most people above have said, it's really helpful if your agent is an investor, but I don't think that's a dealbreaker. For me, the most important thing is that the agent is willing to submit any crazy offer that I want to try, and give me HONEST feedback about the terms I am proposing. If an agent says, " you'll insult them with an offer like this," I know that agent doesn't "get" what I am trying to do.
On the flip side of that, I am not asking my agent to submit 15 offers a week- any agent will get tired of that really quickly. I offer when I am serious and my agent knows that they can support the offer because I can close.
Most experienced realtors also own properties. Each person have his own criterion what is a good or not good deal. This site has some great tools. Again GIGO. If you do not have useful input you get trashy analysis.
Work with someone who invests in properties similar to what you are buying, preferably someone who has been investing for a long time. Knowing the area of the city is helpful too, especially if you are looking at multifamily homes, which have lots of ins and outs you probably won't find if you buy a newer SFH in a development (which could have a different set of issues). Do not work with someone who doesn't understand the investment market. Many who aren't investors think rent - mortgage = cash flow, which isn't the case, and they will bring you to properties that won't perform well or will be difficult to rent.
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