Seeking advice for finding a realtor

15 Replies

A little about me...I'm brand new to real estate investing and looking for my first property. I am looking for either a single family or multi family property to buy-and-hold while using the BRRRR method. I am located in Saint Louis, Missouri and actively looking for a real estate agent.

The issue I am running into is any time I connect with a realtor they want me to sign exclusively with them. While I appreciate the work they are putting in I aim to have multiple realtors who all send properties for me to analyze on a regular basis. Now if I end up purchasing a property I will absolutely use the agent that sent me that deal in return for there work. 

Ultimately my question is how do I go about saying this to a realtor without being rude. I don’t want the realtor to feel like I'm wasting there time, but I also understand on their end how they could rather do this with someone who they have a trusted relationship. 

Any insight on this is much appreciated and I thank you in advance. 

Originally posted by @Alex Wuesthoff :

A little about me...I'm brand new to real estate investing and looking for my first property. I am looking for either a single family or multi family property to buy-and-hold while using the BRRRR method. I am located in Saint Louis, Missouri and actively looking for a real estate agent.

The issue I am running into is any time I connect with a realtor they want me to sign exclusively with them. While I appreciate the work they are putting in I aim to have multiple realtors who all send properties for me to analyze on a regular basis. Now if I end up purchasing a property I will absolutely use the agent that sent me that deal in return for there work. 

Ultimately my question is how do I go about saying this to a realtor without being rude. I don’t want the realtor to feel like I'm wasting there time, but I also understand on their end how they could rather do this with someone who they have a trusted relationship. 

Any insight on this is much appreciated and I thank you in advance. 

Just ask to be on their email list for on and off market deals. However, as you are new to real estate investing you will want buyer representation when buying. Going with the listing agent puts you in a tough spot. The listing agent really only has a responsibility to the seller and not to you the buyer. Building a relationship with a good buyers agent is key to finding the best deals around. 

Are you willing to pay a realtor hourly?  Whenever someone doesn't want to be exclusive to me, but wants to use my services, I offer them to pay hourly. My billable rate is $350 an hour. That usually helps out into perspective that my time is valuable, and Im not just going to waste it.  

@Alex Wuesthoff I agree with Alex and Russell above. I don’t ask for exclusive agreements, bc most investors are like you, they’ll honor the agent(s) who finds them the deal.

On the flip side for you, a buyer agent you can consider is one who is willing to put you on a list without an agreement. If they’re making you sign with them up front, consider another agent.

@Alex Wuesthoff Put yourself in the Realtor's shoes for a minute.

Almost without exception, we are private contractors (1099s), not employees (W2s).  That means we receive no salary, no expense reimbursements, no paid time off, no health, dental or life insurance.

On top of that, we pay for a lot of other ongoing expenses, all without reimbursement. NAR dues (mandatory for MLS and brokerage requirements in many places), MLS fees, E&O insurance, car, gas, mileage and marketing which alone is often several thousand dollars per month. Websites, CRM/Tech fees, brokerage fees, broker review fees. These things really add up.

Mind you, we don't make a dime unless we help a client buy or sell a property.

Enter the investor.  He calls and tells me that he wants a cash-flowing multi-family in a particular geography and has a budget of $XXX,XXX.  So far so good.

But then he tells me (and I just had this exact conversation 3 days ago!) he has 5 other agents looking for him, but he'd like me to be agent #6.  That means that each agent has the potential to work as hard as the other 5 but have a 1 in 6 chance of getting paid.  A 16.6% probability of a paycheck is not even remotely reasonable.

Being self-employed, time management is critical.  I have only so many hours per day that I'm able to work and if I invest that time in someone who doesn't respect it, I'm shooting myself in the foot.  Time spent on one client is time I can't spend with another.

My response is that I require an exclusive Buyer's Broker agreement and explain the reasoning given above.  Virtually all understand and most had never even considered the reasoning behind it. 

I hope that makes sense and gives you insight as to the world that Realtors live in.

@Alex Wuesthoff

I am not an agent, but i was in a similar situation when i started looking at properties. I interviewed 3 agents first then picked one to use. After i bought 3 properties with the agent, i informed her i would use other avenues to find properties. She was ok with this as i had already given her 3 deals and she knew i was serious. Since then, i have used her for another 6 properties and 3 not with her (one of my closings not with her coincided with another of her closings and attorney was worried, but no issue). My advice, find an agent an do some deals, then branch out.

@Alex Wuesthoff I would work with one exclusively for each particular area. Most good realtors are strongest in a particular group of towns, types of properties etc. find one you want to work with for each area and treat them well. If you find a property yourself in that area you should cut them in. You will move up on the trusted client list.

You don’t have to accept the off the shelf contract as it is biased in favor of those who drafted it—which if you think about it for a second is perfectly natural—but it’s more than fair for them to ask you for a written agreement. I’d make sure it’s time limited and subject to automatic renewal.

I wouldn’t work with you under the conditions you ask for. Not because it’s rude but because it would clearly not be worth my time.

There's clearly a theme here with the realtors who have addressed the part of your question regarding using multiple agents , but I wanted to share a bit about how I found my agent and why he was such a good fit for my first and future investment purchases.

I'd kicked around the idea of buying rental property for a couple years, occasionally considering it as something smart to do.

After dabbling in the stock market for about six months with some unexpected success, I started obsessing about getting my first property. I had little knowledge on how to search, qualify, and what to do. So I turned to YouTube and found Morris Invest, with that Clayton guy. 

His videos gave me a basic understanding of how to invest, but I kept thinking, there's no way people can buy houses for 40- and 50-thousand dollars. 

Later I found Graham Stephan's videos and his content motivated me. Lastly, I found videos by Brandon Turner. Brandon's videos gave the most detail about how to invest, so I eventually decided to listen to the podcast. At that point, I called a friend of mine who works as an investment broker. 

Through talking with him, I learned that a former pastor and mutual friend of ours owned three rentals. I called the pastor and he gave me great information on the local market. He also connected me with a friend of his who sold real estate and owned rentals of his own.

I had no idea at the time how good this agent was. I only knew he came to me from people I trusted, shared my values and could help me buy. The reason I go into so much detail here is because it was the progression of studying, questioning, acting, and trusting that led me to a great buyers' agent who I'll work with repeatedly as I grow my portfolio. 

You likely know someone who knows someone that can help you find the property you want. My agent set up a custom listing for me that targeted the zip code I wanted to buy in at the price range I determined. Any time a listing came up that I wanted to see, he dropped everything to take me to the property. I felt guilty asking him to spend so much time on me, but he assured me it was his job.

Afterward, when we'd bought our first property, I started looking for a second property, because I want to scale quickly and I've been bit by the bug. Still having not learned much, I decided to reach out to a friend of mine who recently got into real estate. This guy has sold one deal and he's shown me in other areas of his life that he lacks motivation. 

I wanted to give him a chance to do a deal and at the same time get two sets of eyes working for me. I told him what I was interested in, and he said he'd show me anything anytime, no mention of a contract. I didn't even know agents used contracts. None that I've worked with have asked me to sign one. But then the new guy started talking about it and I stopped. He wanted me to contract with him exclusively.

You can imagine that illuminated my ignorance in a hurry. I pulled back, examined my situation, thought about where my success had come from, where my success was leading me, and apologized profusely to the new agent. If I had known I was using him, wasting his time, and undermining the first agent I'd bought with, I never would have done it, but that didn't make it right.

I managed to harm a friendship because of my behaviors, and I learned that you're better off trusting one good realtor and allowing him or her to work for you. Focus on finding an agent who understands what you want. If that agent wants you to sign a contract, do it. When you find a good one, that realtor will accelerate your investment strategy and help you find the right deal. That's how realtors make money.

1. Use your local network. 2. Network on BP. 3. Interview the agent and clarify your goals. 4. Trust the process. 5. Never feel guilty that you're asking too much. 6. Never ask to see a property you couldn't justify offering on, but also, just because you can justify offering doesn't mean you have to, and again don't feel guilty that you don't offer, but the point here is the realtor will make money when you make money so allow him to work hard for you.

"Ultimately my question is how do I go about saying this to a realtor without being rude."

1) Tell them what you're looking for.  Tell them you are qualified and have the funds and aren't there to jerk them around.

2) If they find you a deal, you'll let them write the offer and they can have the commission

3) Be nice to me and if I find a deal, I'll let you write on my behalf.

If that's not enough, get another broker.  Not everyone is a grifter which is how I see exclusive buyer contracts.

Originally posted by @Alex Wuesthoff :

@Alex Olson Thank you for the advice, much appreciated. Any tips on how to find a stellar buyer agent? 

Do you your research, here, linked in, and call around to several agents in the area you are looking at. Tell them you want a buyer's agent who works with buyers on a regular basis. And tell them your expectations and how you both can make money together. Know your requirements and they will be more impressed. 

 

@Alex Wuesthoff & everyone. Brandon had a guest on a recent podcast that said it best. Find a Realtor you trust and who understands your goals, and then make sure to take care of them, as any other valued partner in your business. If your Realtor feels valued and respected, they will bring you great value for it. Some of the best deals may be off market deals or deals where a seller doesn't want to pay the Realtor. The guest on the podcast explained that he still paid his Realtor out of his pocket on those deals, because that agent is still working hard to find him deals. We can't work for free...

Find an agent you trust. Read their Zillow reviews and see how many deals they have completed recently. Talk to them on a zoom call or for coffee. I don't make my clients sign an exclusive agreement until we find the property - but realistically how hard do you think I am going to work for you if I think you aren't very committed to working with me....? But I also understand that I need to prove my value to you as a client. Find a client centric agent and you will avoid the issues you're worried about. 

A great agent should be able to understand your goals, your business model, and even add value or other angles to that model. They should be able to find properties for you on and OFF market, and have a network to help you in your BRRRR or business model. And they should be able to be creative in negotiations to get you that great deal.

The guest on the podcast also mentioned something that someone else said above. If you tell me what you are looking for, and I bring you 2 or 5 or 7 options that all fit your criteria, and then you decide to buy NONE... well then I am going to conclude that you are not ready to buy, and therefore wasting my time. Great agents have other clients too. So if you want a great agent and want to maintain that partnership, don't waste their time either... Be ready to buy when they find you that deal.

Ultimately I agree with the statement of having different agents in different geo areas - but make it a big enough area. I help investors in Austin, TX, but also up to a 30-50mi radius around Austin. I still have competency in those areas. But I won't help someone in say Dallas. So make it a big enough radius... Besides, it's better to partner with one great agent who is busting their butt for you than dabble with multiple agents. Get that cenergy going.

Thank you to everyone who has answered first off. All the responses have really gave me multiple point of views (especially from the eyes of a realtor) that I have never thought of before. The lengthy responses leave me with a lot to think about and a reformed approach. 

Become an assistant to an agent so you have access to the MLS/e-key and then just pay them to draw up the docs when you find a property you want to make an offer on.

or hook up with some reputable wholesalers and they will get you properties.

Alex,

The other agents here kind of nailed it with the time/value perspective of a realtor.  In MO, welike to have clients sing a buyers agency agreement to make sure we don’t put in the time and money finding a property only to have the buyer use another agent to close the deal.  It makes sure we get paid for our time, like everyone else said.

Generally, I’ll do some auto-searches for people and maybe show a property or two, then when I sense they’re serious I’ll ask them to sign an agency agreement.  


Let me add one more perspective here not yet discussed.  As a review though you are new to the game.  I would look for ONE very good realtor that has EXPERIENCE and KNOWLEDGE of INVESTMENT REAL ESTATE.  He or she should know the 1% rule, land lording, typical jargon used by investors and what motivates an investor vs a client seeking a personal residence. It is also a bonus if they own investment real estate as well.  MOST REALTORs DON"T.   

I specialize in buying duplexes and I am very bias towards small multi-family properties. Most realtors don't know jack about the multi-family investment real estate.  Seek out those who do. Know your goal and objectives you want to achieve, but a good realtor will help you develop and refine your goals to focus on what is right for you. 

Assess your realtors to find out if any have a strategic advantage in finding properties off market. You don't need quantity of realtors you need ONE GOOD QUALITY REALTOR. Being new to the game, you simply don't want a realtor to put you on an email feed of MLS properties. YOU NEED GOOD ADVICE. YOU NEED SOMEONE WHO YOU CLICK WITH and UNDERSTANDS EXACTLY WHAT YOU ARE LOOKING FOR. Cheers and Good Luck.