For regular home buyers and sellers, I use a set of pre-qualifying questions such as:
1) Why do you want to buy? What's your motivation?
2) When do you want to move in?
3) What type of home do you want?
4) Where do you want to move?
For Investors, what types of pre-qualifying questions do you ask for your investors?
Also, do you give a buyer's presentation or make them sign a buyer's agency form?
I apologize if this question is stupid. I'm a newer agent and there is usually nobody in my office that I can ask because nobody actually goes to the office.
I primarily work with investors and my services to my investors looks very different than my service to my retail buyers. So using the same script isn't going to work. With my retail buyers I use auto-emails and can usually get away with that unless I know they are more serious. With my investors I can go through every property before sending them out.
As far as pre-qualifying, I am happy to help them if they are just starting, but I won't submit offers or even look at properties without a pre-qualification letter or proof of funds first. Investors need their financing in place before having a deal in place in my opinion.
Often times investors are working with other agents in different markets. I always make sure they aren't working with any other agent in my market first. But I won't make them sign an agency relationship doc until I am submitting an offer on a property for them, and often times that agency relationship is written to be valid only for the specific property I am writing an offer on. I usually try to encourage sight-unseen offers with an inspection contingency, otherwise you can spend a lot of time looking at properties that your client won't bid high enough on to get.
Making sure the buyer has the ability to buy is a great first step.
When working with a potential investor after making sure they have the ability to buy I make sure their expectations are in line with the market.
For instance if homes in an area are trading for 50-60k you don't want to work with an investor who is looking to by those homes for 30k.
WOW that was good information! More than I can ask for! Thanks Colin and James! =D
I agree with @Colin Smith about the bidding sight unseen with contingency. As an investor, I don't need to see the house, it isn't an emotional purchase. All I need is pictures and numbers.
We just had this topic at our last rei club. I suggest joining your local reI club and learn what the investors are really looking for. You can't sell something you don't understand. Especially if you take on new investors. They will have a lot of questions.
I would also suggest "tuff love". Ask to see proof of funds or pre-qualification before showing any properties. If they really want to get started, they won't mind. You don't want to drive to 50 properties and not get one offer in.
I think one of the key things to consider is the investor's liquidity. Instead of telling your client to "show me the money," simply ask for a pre-approval from a verified mortgage lender. This will help ensure that you and your client will not waste their time.
Pre Qual letters are great.
Another thing we do that helps ensure no time is wasted, We have a lot of investors come to us who are very new to investing. They have no lender contacts so we put them in touch with our network of lenders.
When they get that pre-qual letter we know that it is from a legitimate lender and not a fly by night company.
This is great info
Hi @Gino Bautista - You've gotten some great advice! You may already be familiar with the following guide from BP on how to agents should work with RE Investors:
If not, definitely use it as a reference! I work primarily with investors, and I concur that preapproving buyers is critical.
I wish you lots of success!
Bumping this thread with a few more questions:
- is this a long or short term investment?
- How important is cash flow? Equity?
- Do you have a team to do value-add deals?
What other questions do ya'll think is best to qualify investors?
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