Should I get another Real Estate Agent?

28 Replies

I've been wanting to invest in Real Estate for a couple of months. I've been listening to the podcasts, and reading articles here in BP while looking and learning more about my market.

At the same time, I contacted the real estate agent that helped my parents started out in real estate investing to see how she could help me. She signed me up for an automatic listing and she also helped me get pre approved for an FHA loan so I can house hack my first investment.

She helped out a lot at the beginning, but when I started to find deals on my own through realtor.com or driving for dollars, something change. She wouldn't reply in a timely matter, and when she did, She would reply I wouldn't qualify for the property under an FHA loan or that it was already contracted .

I feel she's becoming a rock on the road and not really helping anymore to keep moving forward and start making offers or find good deals.

Should I find another realtor that will help me ? Since she helped me get pre-approved with someone she knew, would I need to get another bank to pre-approve me?

You wouldn’t HAVE to get pre approved again, but a realtor may ask you to get pre approved again with a lender that they have worked with before.  

To be fair, some owners won't take FHA loans due to their restrictions. Realtor.com and Zillow are also not always updated in a timely manner so you may see them on Zillow or realtor.com as for sale, but they truly may already be under contract.

Most realtors won’t go actively searching for off market deals for their investors.  They will put them on an auto-e-mail list and wait until you see a property that you like.  Most realtors also aren’t “investor friendly”.  They don’t know how to properly analyze a deal.  They leave analyzing to their investor clients and they just negotiate and handle paperwork.  

I would suggest having a conversation with her expressing exactly what your needs are and ask exactly how she can help.  If after that conversation you still don’t feel like she’s the right choice, then move on.  

@Bill Plymouth

Thanks for your reply.

Yes I've been analysing the properties myself and I email her right away when I find something I'm interested in. And yes like you said, Realtor.com and Zillow don't update regularly but they have helped me see other properties within the market that don't get sent through the email listings she scheduled.

I just feel when I'm really and excited about a deal and ask her to schedule a showing for me, she either responded too late or flat out says no because it's not within the FHA loan requirements.

@Olga Merino is El Paso a hot market? I have no idea if it is or not, but you’re likely have difficulties for a number of reasons:

1. FHA loan is by far the weakest type of loan. Properties need to be in pristine condition and appraisals can be difficult. Long story short, it's often very inconvenient for a seller.

2. If your market is a hot market (that’s why I asked), often a good deal goes before you have a chance to look at it (from the inside).

3. You’re asking your realtor to schedule showings, run deals, pull comps (maybe), and do these other things. These are all low margin activities for most realtors. If they’re busy, they probably rather do something else.

These are just the things off the top of my head. Bottom line, I’d probably find a new realtor

I see.  This sounds like 1 of 2 issues to me.  She either doesn’t take you seriously or isn’t a good communicator.  

The properties that you're sending her that she says do not qualify for FHA loans, are they a little run down or in disrepair? In that case you may need a new loan. FHA (203k). It's similar to the regular FHA loan, but it allows to purchase homes that the regular FHA home won't finance. The FHA 203k also allows you to finance the rehab costs alongside the purchase price. The only downside is that you can't do the work yourself and you have to use a HUD approved contractor.

Based on what you’re telling me, she isn’t doing her job well.  An agent’s job can be boiled down to one aspect.  Communication.  She clearly isn’t doing that, based on what you have told me.  Maybe you should find a new realtor. 

If you’re looking for a fixer upper, you’ll have to use an fha 203k....a regular fha loan (203b) has fairly strict condition requirements and most fixer uppers will Not qualify.

Perhaps try and sit down with her and communicate expectations and mention that you are not seeing progress with your goals set out. Remember you hire agents as representation.

Don't feel bad if you feel the need to make the switch if things aren't working out. You can interview other agents.

However, in reality, there are a good percentage of agents that either 1) Will not know how to analyze investment 2) As you said, are not savy with off market 3) Are not familiar with real estate investing in general.

Not to say they are not great agents in finding a home for the general population. But a cash flowing, investment property with all of the criteria you may be shooting at her with what you have learned may not be their absolute expertise.

Disclaimer: These are not all agents (so i don't get yelled at). I found my first deal before my realtor sent it to me.

@Caleb Heimsoth

My market is actually Laredo, TX not El Paso, TX.

Im the one, with the help of my parents, doing all the analyzing and and looking for deals and if I find something I like, I email her so we can go see the property and get more information on the property if I can't get it online.

I'm open to other different ways to financing a property. Most of the properties here do need renovations. The only ones that qualify for the FHA loan are the recently built ones. And I'm not looking into that.

@Bjorik Mutize

Thanks for your reply.

I do need to sit down and talk with her. Tell her my concerns and explain that I don't need her to analyze properties or do comps. I just need her to be able to show me a property or submit an offer for me before a property is contracted.

@Olga Merino Yea, i'd say if anything the expectations need to be set as far just showing more urgency and partnership when needed. Also, obviously you don't expect her to know every single detail of real estate investing.

I'd still have her run comps and etc as an agent should do so she can showcase some value. Even if you do your own

@Olga Merino

Some properties don't accept FHA loans. A personal flip property of mines. I wasn't accepting FHA loans. Also, many of times Realtor.com and Zillow.com don't be updated in a timely matter. Especially Zillow, but sound like you may want to have an conversation with her to express your concerns. Also, ask more questions you may have. To have a better understanding on both ends.

Hello @Olga Merino ,

Is there a reason why you are aiming to use FHA? There are conventional loans that take 3% as down payment just like FHA does.

Speak with a lender, and ask them to do a case by case scenario analysis. I have a lender that I work with here in El Paso, TX that is very good at communicating with his clients regarding the ups and downs of certain loans on a case by case basis.

As an investor, it seems that you would benefit from house hacking, perhaps buying a two units that need some work, rent one (price it right) and move in to the other unit, while gradually start fixing it. You will have cash flow coming in from the rental that will help you cover the mortgage.

Regarding your comment about realtors, I became one after being an investor and seeing the urgent need of savvy realtors that understand how to properly analyze deals, are familiar with wholesalers, are aware of remodeling work and know a level of property management. Most realtors are not investor-friendly simply because they are not investors themselves.

Good luck, keep analyzing tons of deals, and you will know when you find a great one.

@Caleb Heimsoth El Paso has a strong rental market. You can buy properties for 2/3 of what they cost in Vegas and get around the same rent. The only difference is higher property taxes. Friend just moved to El Paso and tells me great things. It’s worth looking into

You would not need to get pre-approved again. You would just need to contact the lender directly. The issue may be that some homes you may be looking at won't meet FHA guidelines to begin with so the agent might not want to show those homes, to not waste of both of your time. You can also reach out to other agents, if you feel the need to. If you are looking for something more investor friendly needing minor repairs a conventional loan is the route to go because FHA loans may be subject to repairs that the sellers/banks wont repair, then your deal is dead. You can also contact the lender you met with for more details in regards to the property meeting qualifying guidelines.

So you prefer for an agent to let you make offers on properties you dont qualify for and show you properties that are already under contract?

@Olga Merino You need to find an experienced 203k lender if that's the route you want to take and met them face to face, see Exactly how th process works. So you know, there is no such such as HUD/FHA approved contractors....the actual lender approves the contractor. Your lender may have gc's they have approved in the past. Getting approved as gc is rather simple....they need to be licensed, insured and show 3 references of similar work...it's like a two page approval form.

You are absolutely wasting your and your agent’s time if you are looking for fixer uppers with a regular fha loan.

@Olga Merino

Those sites like Zillow and similar are unreliable as they are not updated like the MLS. The properties likely ARE no longer available for one reason or another. I personally run into this all the time. People say they saw it online and I check the MLS and it's been off market for YEARS.

Also, your agent will know what homes will qualify for what type of loans and if you don't believe her, talk to your lender to verify. FHA loans are strict about what condition they are in to qualify but they also offer a rehab loan if the place is in bad shape.

@Russell Brazil appreciate the comment. Realtors catch a lot of flack (perhaps more on this site than in reality, yet still plenty in reality from unrealistic buyers- investors or owner occupants). Seems like Buyer and Agent are not on the same page and that may all be solved with a bit of communication or a consultation to get those goals align and into reality with the market.

@Olga Merino - If you’re sending your agent addresses of homes the day they hit the market or have a price drop and she’s not touring them with you and/or helping you write offers, you should find a different agent. Make sure you haven’t signed or can cancel a buyer agency agreement.

Normal Fha loans aren't good for foreclosures / reos or fixer uppers because the seller needs to do the repairs and can't sell it to you as is. 203k or Fannie Mae homestyle conventional rehab loans can get costly because you need to get a scope of work from a consultant ($750+) and get a reasonably priced licensed contractor who will front the money and labor and get paid after bank inspections (mine charged about 30%+ more for all the work than I could get directly from the subs.) Your sweet spot might be well maintained (functional) but fugly homes needing cosmetic updates. You'll be competing with investors for these properties. Try to watch Fannie Mae homepath.com, Hudhomestore and other foreclosure sites that offer homeowner "first bid" opportunities. I bought a nice foreclosure (paid 247, ARV 360-380) with my husband during the first days on market. We did Fannie Mae homepath and got a homestyle rehab loan for 70k renovation and put 5% downpayment. Now we're into it for about 305k and have a house worth 360-380k and got to pick our dream finishes (wood look tile, wide plank hardwood, white 42" cabinets, grey granite counters, grey paint, new hvac, etc.)

@Olga Merino

Everyone here has giving great advice so far.

1.) shop around for loans. FHA 203k seems a great route. Try finding a hard money lender.

2.) shop homeopath.com and hudhomestore.com

3.) look at how you can add value to fha approved homes. Convert garage or carport. Add bedrooms / bathrooms. Updating can add value.

4.) You don’t need a home run, you need a single!

4.) don’t be afraid of a “no answer”

Keep up the great work!

-Arod

As Hard Money Lenders we lend to fix and flippers every day. Including in TX. Most of them somehow manage to do the deal and close using our loan without a real estate agent necessarily being involved. 

If conventional loan sources do not suit you either because you or the property don't qualify, or the length of time till closing is too long to get the deal done, consider a HML. More expensive than traditional loans but much more flexible and usually considerably faster in closing.

It is not clear to me how many deals (fix and flips?) you have done. At least one but maybe more. As you become more experienced and can do the maths yourself better, don't feel constrained to only consider projects that FHA loans or any conventional loans for that matter can cover.

Real Estate Agents like doctors or even all powerful lenders ;) are a resource. Loyalty and a personal connection is great and will hopefully be of great benefit, but if one of the above no longer suits you as you develop your skills and career, see if another is a better fit.

Best wishes in your endeavours.

@Olga Merino . If you have to use an FHA loan then getting excited about properties that don't fit the criteria are a waste of everyone's time. I don't mean this to be offensive but you sound like a difficult client. Your agent appears to be dialed into and area and price point within your lenders guidelines. You seem to be chasing properties online that are under contract or outside of FHA guidelines. Do you want her to act more excited or get you into the best property available?