Why do Agents suck? ... Why are they awesome?

15 Replies

I've overheard countless conversations about investors hating agents, investors loving agents, the death of the real estate agent and the necessity of a licensed broker. 

What's your take on it? 

I don't personally think google can answer all our questions regarding local real estate transactions. Neither can someone who does something different from what someone else does in real estate. So, there will always be the role of the broker who works with many different types of deals and styles of investment. 

Thoughts?

A real estate agent is no different than anyone else on your team - they either add value, or they don't.   We have a good agent - not only does he bring us pocket listings and off market leads - but he has also sent lenders/borrowers and other investors (looking for partners) our direction.

Originally posted by @Adolfo Cuellar :

I've overheard countless conversations about investors hating agents, investors loving agents, the death of the real estate agent and the necessity of a licensed broker. 

What's your take on it? 

I don't personally think google can answer all our questions regarding local real estate transactions. Neither can someone who does something different from what someone else does in real estate. So, there will always be the role of the broker who works with many different types of deals and styles of investment. 

Thoughts?

I've worked with many brokers. Some add value, others simply do not. Not much else too it.

i.e. My firm is in contract right now to buy a property and develop 80 apartments. The only way I was able to lock the deal up and get into contract was because my broker called me the day the investor fell out of contract because he couldn't come up with the deposit. Had an LOI out within the hour. That is value add imo.

So a broker @Christopher Cruz , must be on top of the deal more than anyone else is. Aware of every movement in the market, etc... 

And some brokers just aren't. 

As a broker, I often think about how I could be better and provide more. This post is really about getting the investors perspective on this.

the reason most RE agents suck compared to most industry's is that they aren't rewarded or incentivized to work harder or smarter. This is because most RE buyers and sellers are ignorant as they only buy or sell a few homes over their lifetime. therefore the always be closing, film flam , glad handing, somewhat dishonest, RE agent can usually do a lot better than the sincere and earnest agent given their average clientele . As investors and RE professionals, we are the abnormal ones, so judging agents from our perspective is inherently skewed. The bottom line is that most agents suck because crappy but slick wins in the marketplace.
Originally posted by @Adolfo Cuellar :

So a broker @Christopher Cruz, must be on top of the deal more than anyone else is. Aware of every movement in the market, etc... 

And some brokers just aren't. 

As a broker, I often think about how I could be better and provide more. This post is really about getting the investors perspective on this.

Know your client.

If you have existing clients, know their acquisition criteria (asset class, cap rate, deal size), (sub)markets of interest, investment strategy (repositioning, stabilized, development, etc.), so you are ready to bring them a deal when the opportunity arises. 

I am currently focused on multifamily development and repositioning opportunities. If a broker floods my inbox with stabilized core multifamily deals, he is doing nothing for me.

Hope this helps.

@Adolfo Cuellar

Most real estate agents/brokers are not suitable for an investor. Most realtors are interested in helping a couple find a house they are emotionally attached to or to help a seller offload a home so they can find something more suited to their taste/circumstances. They enjoy helping people and making people feel good. Nothing wrong with that, except that an investor doesn't need to feel good about the property, he needs to feel good about the deal. My old agent used to ask me if I liked a house and he was constantly puzzled when my response to him was in terms of ARV, Repair Costs, Cap Rates, and Comp Values.

-Christopher

@Christopher Cruz is on the money.  Know your client.  Bring them the deals they want and don't be wasting their time and yours with noise (properties that are of no interest).   

 @Christopher Brainard - you need a big disclaimer wrapped around your post qualifying it in the domain of "Retail/Residential agents and brokers".  It is true, most such agents/brokers make their way selling Dick & Jane a house 2 to 3 times in their life.  As such they sell on emotion rather than numbers.

On the other hand, the commercial brokers I've encountered understand real estate as a business and are professional.  Certainly some shine brighter than others, but they are an entirely different animal than the residential broker.

@Adolfo Cuellar my take is that I enjoy having a team member who is an expert at helping me maximize our return. My broker/s (have one in each of my markets) help keep me in the loop on good opportunities and referrals that I wouldn't have otherwise. They fee is steep for the amount of hours put in to the deal but it's worth it when factoring the amount of value they create. 

As stated above there are good agents and there are bad agents. From my experience, the bad outweigh the good.

I primarily invest in sub $50,000 units. Most experienced agents don't want to deal with these because they are focused on the bigger commissions. This leaves me with new agents that don't know the difference between hot and cold water. That is an exageration, not by much though. They either havr never bought thier own home or only bought one or two personal residents. None have actually had investment property. They don't get cash flow. But, I need them for the mls access.

When you get an agent that "gets it" make it worth their while to keep you as a client.

@Adolfo Cuellar As an investor in single famliy homes, I've found that trying to work with agents has been an exercise in futility. The only agents I've met who understood what I do, were investors themselves, doing the same kind of deals for their own portfolios. They had no interest in passing those deals on to me because they'd make a fraction of the amount of money. All the other agents have been impossible to educate.

That said. Agents do provide a very useful service to me. They do all the leg work of finding sellers, and when they can't sell the house and the seller becomes motivated, the time is right for me to step in and buy.

Sounds to me like targeting investors as a broker goes against the grain a bit because 6% of sub 50k for an investor is much less than 6% of 300k for Sally and Mark. 

But volume is another consideration. On of my mentors mixes everything up. When she has a seller that's trying to move quickly she'll assign and sell to an investor, when she has a couple purchasing a house she'll understand exactly what they need. 

I look to being as diverse. 

I became an agent because the agents I met were terrible, never called me back, or had no clue what they were doing. Now that I'm in the industry I have to deal with those types of people a lot more, but when you meet a professional they stand out. The industry changes so fast that you constantly have to be bettering and educating yourself and most people don't have that drive.

As far as being diverse, I think catering to investors vs normal buyers takes completely different skill sets, processes, and knowledge.

It really is a numbers game.  I went through 10 of them before I found one that understood the dynamics of how I invested.  They need to be trained like anyone else.  Mine knew that I wanted to look at only listings just about to expire.  They also knew I would pay in cash and close quick which in turn knew they were going to get paid sooner working with me.  In general if they cannot keep up with you FIRE them.  The nice thing about letting an agent go is you don't have to pay unemployment :)

As investors we need to deliver a concise message of what we're looking for in an investment to agents and brokers we come into contact with during our travels. Equally important, I think its imperative that we not only communicate this verbally, but also send or hand our buying criteria to the agent in the form of a simple flyer or typed out memo. If you have a website it should be posted prominently on its own page.

We can list off our desires and wants all we want, but if all the information doesn't register with the agent then they're likely to only pick up on the information they want to hear. 

If I'm reading between the lines correctly from those that have already posted, many of you may have already experienced this with the agents you've encountered. Sure, we all know there are agents that are only going to want to put in just enough effort to get you to close on something they've taken you, and its those agents we don't want to burn time with.

And then you have the opposite. My wife and I recently started to execute on a business plan to start and create a fix N flip business. And we've recently had some experiences with residential real estate agents, really a whole new experience level for each of us.

A brief background might help here. Our investment experience is in owning and operating commercial real estate e.g. office, industrial, and retail. My professional background is in commercial real estate brokerage, and together we have owned and operated both large and small commercial brokerages in a major metropolitan marketplace.

Moments before I began typing this message I was reading through some emails my wife sent me earlier today. I was a bit perturbed by the 12 emails. She had apparently spoken with a local real estate agent, and through the conversation told the agent she was an investor interested in buying fix N flip residential, and would like to know of any distress property situations as we would look to buy those too. The range she gave the agent was from $100,000 to $2,000,000.

The broker sent her a list of every property in the mls broken down into 1/2 million dollar increments, I guess to reduce the size of each list (they're only about 300-500 hundreds listings long).

She's run a brokerage before, I mean she literally kept our office running while I brokered, managed, and trained a large sales staff. She knows the brokerage business, and together we've trained 5 - 6 dozen new commercial real estate agents entering the commercial real estate business (about 1/2 of them former attorney's). 

When we began to execute on our plan I suggested she get an agents email when talking to them in person or over the phone, and then email them our buying criteria (I also want to use this to build a list of local residential agents for when we're marketing properties for sale). She didn't do it, and because she didn't do it this guy send her the Chinese phone book of mls listings.

Its funny though, when I questioned why she didn't ask for his email she said she had called on about a 1/2 dozen listing she had found interesting and each of the agents she spoke with really had little if any interest that she was an investor interested in buying property in their marketplace.

You can't change the habits of an undisciplined and maybe unprofessional real estate agent. Thats said, there are many very good and professional agents in every market. And its those agents you want to find and work with to help you grow your portfolio.

It may take you some time to find a really good agent, and you may have to work with some not to good agents until you do, but when you find a really good agent that delivers properties that meet your investment criteria they will add more value to your deals than you'll ever pay them out in commission. 

just because you are an agent doesn't make you an good investor.

investor friendly agent like me are around :)

i find we tend not to advertise we are..... here is why, in my opinion....

I got my license bc I COULDN'T find an agent like me.

I've have my license for a few yrs now. mostly to facilitate my own deal. and help other investors along the way

there are just different kinds of agents. just like there are different kinds of doctors.

if you need surgery you don't go to your gp. you go to your surgeon.

unfortunately agents aren't labeled unless they market themselves. luxury, REO, relocation.

investor friendly agent I found go by WORD OF MOUTH. 

I find eventually investor friendly agents can only handle a few pocket investors. 

because investors is a repeat business a relationship business. 

I like to joke that I have many "boyfriends", and its nice that they all are interested in different thing so no jealousy.

as I do a daily scrub. I can go multi for A, REO for B, and commercial for C

and most importantly there is not conflict of interest bc I also invest completely differently from my client

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