Am I wrong? Am I expecting too much from my real estate agent?

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Am I wrong? Am I expecting too much from my real estate agent?

Jeff Terry
Investor · Chicago, IL · Member since 2021 · 31 posts · 22 votes

My wife and I are planning on relocating to East Tennessee to live and invest. We don't know much about the region other than what our research churns up (numbers, market forecasts, Google Earth views) and we really need a trusted partner to fill in those blind spots. 

Recently we've engaged with a realtor in Knoxville who has been willing to show us properties and fill in some details that aren't on the MLS listing. But when we ask "Is this a good neighborhood for rentals?" or "In your opinion, how many thousands will a rehab cost?" we get nothing. To the first question it's usually, "I have no idea," and to the second question, our agent won't even offer an estimate, a ballpark. We know that estimating a firm number on a rehab is somewhat foolish (things often go way over budget) but we are looking for a starting point and find a dead end.

My question to you fine folks: Am I expecting too much? I don't want to have someone do all our work and maybe I'm being a little selfish here. But this could be a beneficial relationship for us both as we plan on buying a 4 bedroom house to live in as well as several properties to rent for cash flow. 

I really don't know. 

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
5y

If they comment on the quality of the neighborhood, and there is a Fair Housing tester making that call, they may end up with a $16,000 fine for illegal steering.

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  • Jeff Terry
    OP
    Investor · Chicago, IL · Member since 2021 · 31 posts · 22 votes
    5y
    Originally posted by @Victor Jernigan:

    @Jeff Terry - Realtors are not allowed to answer either of your questions - the 1st is a violation of Fair Housing Law and the 2nd is a legal problem in that it is considered giving investment advice. I suggest you reach out to any of several good investor/Realtors in East TN who are also involved with local investment groups - @Derek Tellier and Whitney Nicely for example. They can introduce you to other local investors and show you where they are investing. 

    Thank you, Victor! This is a tremendous help. I'll follow up and hopefully share your wonderful city. 

    1Reply
  • Jeff Terry
    OP
    Investor · Chicago, IL · Member since 2021 · 31 posts · 22 votes
    5y
    Originally posted by @Karen Margrave:

    It's all about liability. As licensed agents we are held to a higher standard.  We aren't allowed to tell you about the safety of the neighborhood, if it's a good area, etc. We can however refer people to Megans Law (Is that just CA?) for child predators, advise that you look at safety maps, etc. As for if it's a good rental area, we can say there are a lot of rentals in an area. As to the potential for income, there's too many variables to give someone advise, not knowing how they manage units, amenities, upgrades they'll make, etc. As for costs to rehab, same thing. If you want real numbers, get a bid from a licensed contractor, based on the price of materials.  If you're looking at a property, do your due diligence, and don't expect the Realtor to do it for you. Realtors can show you properties, give you comps on other properties that have sold in the area or are on the market.  They cannot tell you the value of a home, only an appraiser can do that, agents can give "opinions". 

    Thank you Karen! And yes, to be clear, we were only looking for opinions. As someone from the area, we were hoping that she would be the first person in our Knoxville network and we could begin building connections with her. But we really do need to build these relationships without relying on anyone else. We just felt it was odd that she wouldn't even give her above-board opinions. 

    0Reply
  • Jeff Terry
    OP
    Investor · Chicago, IL · Member since 2021 · 31 posts · 22 votes
    5y
    Originally posted by @Alexander Szikla:

    Lots of agents are simply door openers - they will try and sell you on intangibles (i.e. "forever home" talk). Some, perhaps too few, agents are true professionals who know markets intimately and know about all facets of the real estate business. 

    Choose your agent wisely! 

    Truer words! Thank you, Alexander.

    0Reply
  • Jeff Terry
    OP
    Investor · Chicago, IL · Member since 2021 · 31 posts · 22 votes
    5y
    Originally posted by @Mike Dymski:

    Financial analysis to determine whether or not a property would make a good rental...and estimating rehab costs are both specific skills that few agents would have or need to have.  Selling property does not require the same skills and investing in property.  I recommend networking to find agents who specialize in rental properties (and, even then, you will need to be skilled in both of those tasks).

    With the responses I've gotten, this is abundantly clear. Thank you for adding to the discussion.

    1Reply
  • Jeff Terry
    OP
    Investor · Chicago, IL · Member since 2021 · 31 posts · 22 votes
    5y
    Originally posted by @Matt Nico:

    @Jeff Terry

    I just became an agent last year in addition to purchasing investments. When i have a client i put together the list of homes to show based on what the client wants/needs. These homes go onto a spreadsheet where i give the client a rough estimate of the mortgage payment, the homes condition, and my estimate of what a reasonable rent price would be.

    If the agent doesn’t know anything about investing and wont even give you rough estimates, please move on to an agent who knows better. In one of your initial conversations with them, tell them what you want him/her to do and as long as its reasonable you are not asking for a lot.

    Happy Housing,

    -Matt

    I appreciate that, Matt. We didn't feel like we were asking for a lot, but I also wanted to know where the boundaries are. Your response definitely helps. Thank you!

    0Reply
  • Jeff Terry
    OP
    Investor · Chicago, IL · Member since 2021 · 31 posts · 22 votes
    5y
    Originally posted by @Jay Hinrichs:
    Originally posted by @Waylon Zook:

    @Jeff Terry is this a good neighborhood for rentals is somewhat a tricky question. The agent may be fearful of getting in trouble over the fair housing laws. I hear there are people out there testing agents for violations of this sort of thing and since he probably doesnt know you well doesnt want to answer.

    Exactly..  for rental areas one should be talking to a PM not a retail agent. also no way can you expect a retail agent to give you rehab numbers that totally not appropriate for you to ask or them to answer

    Thank you, Jay. I'll have to be quicker with my network-building to include others apart from just this one realtor. 

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  • Amanda JacobellisBusiness Member
    Real Estate Agent · Southern California · Member since 2020 · 96 posts · 43 votes
    5y

    @Karen Margrave yes was going to say the same thing!

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  • Amanda JacobellisBusiness Member
    Real Estate Agent · Southern California · Member since 2020 · 96 posts · 43 votes
    5y

    @Jay Hinrichs yes I instead show my investors where to find the numbers and how they can run their own calculations. That way it’s not me giving investment advice. I guide clients but let them know where to check for themselves.

    I do give rough ideas of rehab numbers but also recommend we bring contractors though A good agent should have great resources ans vendors and be able to show you where to find the info you are looking for without breaking the law

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  • Marc A. Thurston
    Member since 2021 · 16 posts · 20 votes
    5y

    One great source of locating knowledgeable agents is to talk to the local real estate appraisers in a given market. They will have first hand experience with which agents are dealmakers and who is an expert in the investing market.  Appraisers seek out and rely on the agents who have the most knowledge in a specialty.  

    1Reply
  • Jaquetta T Ragland
    Real Estate Agent · Winston Salem, NC · Member since 2014 · 486 posts · 303 votes
    5y

    @Jeff Terry “ i have no idea” sounds alarming to me as well. My response would be let me look into this for you if I didn’t know. Then I would do some research before I answer you.

    0Reply
  • David Avery
    Flipper/Rehabber · Phoenix Arizona · Member since 2020 · 1k+ posts · 686 votes
    5y

    Get another agent!

    I would direct your two concerns to them.

    "would you want your Mom or kids to  live in that neighborhood"?

    " If you bought this house how many things would you do to get it sale/rent ready"?

    I'm thinking your agent is to busy to help with your concerns and your concerns are

    2 really big DEALS.   The agent is your eye's and direction and that is why they make

    $6000-$10,000 for their split of the comish!

    A good agent will direct your two questions in a way that no one gets in trouble and you

    get your answers, if they cannot do this then they should not be an agent!

    Get another agent!

    1Reply
  • Matt Nico
    Member since 2019 · 448 posts · 306 votes
    5y
    Originally posted by @Jeff Terry:
    Originally posted by @Matt Nico:

    @Jeff Terry

    I just became an agent last year in addition to purchasing investments. When i have a client i put together the list of homes to show based on what the client wants/needs. These homes go onto a spreadsheet where i give the client a rough estimate of the mortgage payment, the homes condition, and my estimate of what a reasonable rent price would be.

    If the agent doesn’t know anything about investing and wont even give you rough estimates, please move on to an agent who knows better. In one of your initial conversations with them, tell them what you want him/her to do and as long as its reasonable you are not asking for a lot.

    Happy Housing,

    -Matt

    I appreciate that, Matt. We didn't feel like we were asking for a lot, but I also wanted to know where the boundaries are. Your response definitely helps. Thank you!

    The boundaries are wherever you set them within reason. Agents work for you. Just set expectations clearly upfront and you should be fine.

    -Matt

    1Reply
  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    5y

    @Jeff Terry - outside of the fair housing laws, most people don't understand this: 90% of the agents do only a hand full of deals per year. The remaining 10% is who you want to work with, because they do lots of deals and therefore have their finger on the pulse of the market. At least for retail.

    We consider an agent proficient who closes at least 25 transactions per year. If you are looking for a rental property as well, find an agent here on BP,  who also owns rental properties and is an investor. There are not many, but you can find them here and they can easily answer questions about rentals from their own experience.

    Don't worry about a "good rental" area. You can rent a property anywhere - actually the fewer tenants live in an area the more desireable it is for tenants! When I moved to Milwaukee I had the same concerns. We invest mostly in the suburbs, following good school districts and it takes me usually no more than a week or two to fill a vacancy out of a stack of applications.

    0Reply
  • Jason Norton
    Specialist · Huntsville, AL · Member since 2020 · 96 posts · 35 votes
    5y

    @Jeff Terry

    Everything you’re asking is a valid question. A lot of people get into real estate thinking it’s easy but there’s a lot of information like the questions you’re asking that they need to know. And they think they’re just salesman. You’re really not if you come out at more like we do on the Funding) side if you come out it more from a advisory standpoint and really do the research to help your clients like we do you have happier clients constantly.

    I do wish as a whole real estate agents would learn more about their market and what they actually do than just being a salesman or a sales woman. I’m not saying you have to know every detail or baffle them with BS, but you should be able to know the basic questions that are being asked here. Me personally I classify it as common knowledge.

    0Reply
  • Jeremy Reynolds
    Real Estate Agent · Myrtle Beach, SC · Member since 2021 · 17 posts · 7 votes
    5y

    @Jeff Terry Any agent should be an expert in their local area. Rental data is fairly easy to pull from MLS. Agents are usually instructed to "stay in their lane" so as to avoid litigation against them. If they don't know anything about current costs of construction or rehab they shouldn't offer an opinion. Even a ballpark guess would be considered "out of their lane". Bottom line is if you don't feel like you're getting what you need from the agent then find a new one. Search for one here on BP through the resource provided.

    0Reply
  • Joshua ChristensenPro Member
    Real Estate Broker · Albuquerque, NM · Member since 2015 · 285 posts · 232 votes
    5y

    @Jeff Terry - Remember that all Realtors are not created equal.  I am a broker in Albuquerque, NM.  I started my career as a young dumb 18 year old (no college, off to the Navy and home in the same year.  Oh, yeah, did I say dumb?)  framing houses and doing construction work.  I worked my way into banking in the mid-90's and eventually into the mortgage business where I started investing in RE in 2008.  Finally in 2012 I got my real estate license.

    My background gives me a very unique view on real estate while working with my clients.  The things you're looking for such as knowing the market and areas are important for a Realtor to know.  Also, there are laws about things like "how is this neighborhood" questions or what's the crime like?  It is actually illegal and called redlining.  He should however be able to point out some obvious things like proximity to schools and websites for school grading, crime statistic websites, etc.  

    As far as rehab estimate quotes.  That's one I would really be careful asking your Realtor about.  Ask him for recommendations for contractors who can estimate for you.  Realtors throw out all kinds of numbers that are not always accurate.  Check out his back ground.  What did he do before being licenesed?  That's a clue as to whether he is the right guy for those kinds of questions.  Again, our license and ethics prohibit speaking on things outside our expertise.  

    I hope that is helpful.  If he's not the right fit for you and you don't have any signed contracts with him, there are other brokers in Knoxville.  I hate to say it, but it is a very competitive business and we are tasked with knowledge the average person does not have.  If he's not delivering, hire someone else.

    2Reply
  • Nick Walts
    Residential Real Estate Broker · Indianapolis, IN · Member since 2016 · 42 posts · 14 votes
    5y

    I think it's already been said a few times, but find a new Realtor. It'd help to visit the area and meet your Realtor in person to create a stronger relationship and bond if you'll be communicating and purchasing via long-distance most of the time later.

    Last year, I traveled with family that are relocating from California to Tennessee (I am a broker in Indiana) and met a Realtor in the Tri-city area (Kingsport, Johnson City, and Bristol) to collaborate with, guide us, and show homes over a 4-day trip. The idea was to get first-hand experience in the area, truly get to know our Realtor there in order to get them dialed in on what was being asked for and needed, and to show that we were serious about our business. I suggest doing something similar.

    If you decide to look further East from Knoxville, I'd be happy to introduce you to my contact in Kingsport, TN.

    Goodluck!

    1Reply
  • Dion Rainey
    Flipper/Rehabber · Washington DC · Member since 2018 · 8 posts · 12 votes
    5y

    I happen to be a Realtor as well as an Investor. We (Realtors) have to be careful with the "Is this a good neighborhood" question because of Fair Housing laws. When I get that question from prospective buyers, I always offer resources to where they can get the information that their seeking i.e. police/crime report. We cannot say things like "this is a bad crime infested area" or "personally I wouldn't buy here because...." One of the reasons for this is any response (positive or negative) could be subjective based on personal experiences. Since everyone's experiences are different, what one person my perceive as "great", another my perceive as terrible. 

    As it relates to rehab estimates, while there are agents who have a rehabbing background, that's not the case with most agents, nor is it part of a Realtor's area of responsibility. Of course it's helpful but should not be expected. 

    2Reply
  • Jeff Terry
    OP
    Investor · Chicago, IL · Member since 2021 · 31 posts · 22 votes
    5y
    Originally posted by @Dion Rainey:

    I happen to be a Realtor as well as an Investor. We (Realtors) have to be careful with the "Is this a good neighborhood" question because of Fair Housing laws. When I get that question from prospective buyers, I always offer resources to where they can get the information that their seeking i.e. police/crime report. We cannot say things like "this is a bad crime infested area" or "personally I wouldn't buy here because...." One of the reasons for this is any response (positive or negative) could be subjective based on personal experiences. Since everyone's experiences are different, what one person my perceive as "great", another my perceive as terrible. 

    As it relates to rehab estimates, while there are agents who have a rehabbing background, that's not the case with most agents, nor is it part of a Realtor's area of responsibility. Of course it's helpful but should not be expected. 

    Thank you, Dion! This whole conversation exposes how new I am to this, and how naive. When I asked "is this a good neighborhood for rentals?" I was thinking about demand. Basically, do the numbers work? Are there people looking for a place to rent and will rent command enough to generate cash flow? I wasn't thinking crime or safety or even a comparison to other neighborhoods. In fact whenever we shared a property it was in isolation and we just wanted to know if that specific address was in an area with a healthy rental market. 

    As far as rehabbing, this realtor is also a flipper so we are surprised she won't share ballpark estimates. 

    0Reply
  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    5y


    @Jeff Terry 

    Hi Jeff, I think it's definitely important as well to work with an investor-friendly realtor because if the realtor only works with first-time homebuyers investors are a complete 180 from that. I work for a brokerage in Columbus, Ohio, where almost everyone in the brokerage is an investor and 99% of our clients are investors so we better understand them. We also always tell them we don't run numbers on how much the money the property would make that is for you to do I can't predict how you would run numbers, and what you're looking to calculate, and what variables you would or wouldn't take into consideration. I think rehab costs are a different story depending on how reasonable. If the rehab is real light, as an investor I don't see any problem of indicating what to expect because of your experience in that field, but if it's going to require a lot of extensive work, I would just phone the contractor or professional of that given field who will do the work. It also helps if the realtor is an investor as well because he knows what being a landlord in that city is like, and he will tell you where he invests and why. You also might learn something from them you can implement into your rental properties.

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  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    5y

    Realtors can show you properties, give you comps on other properties that have sold in the area or are on the market. They cannot tell you the value of a home, only an appraiser can do that, agents can give "opinions"
    --->
    This is why I believe 6% commission for real estate transaction is non sense. High school kids can also show property, give comps, tell the value or neighborhood, good rental or not and good price point.

    This is the exact reason I ditch realtor, just use Zillow and communicate with the listing agent directly.

    1Reply
  • Dion Rainey
    Flipper/Rehabber · Washington DC · Member since 2018 · 8 posts · 12 votes
    5y

    Thanks for clarifying Jeff. In this case the agent should've been able to tell you about market conditions in the subject neighborhood. If the agent is an investor and highlights his expertise as a service to other prospective investors, he should have at least provide resources of where you might obtain rehab estimates i.e. contractors...

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  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    5y
    Originally posted by @Jeff Terry:

    My wife and I are planning on relocating to East Tennessee to live and invest. We don't know much about the region other than what our research churns up (numbers, market forecasts, Google Earth views) and we really need a trusted partner to fill in those blind spots. 

    Recently we've engaged with a realtor in Knoxville who has been willing to show us properties and fill in some details that aren't on the MLS listing. But when we ask "Is this a good neighborhood for rentals?" or "In your opinion, how many thousands will a rehab cost?" we get nothing. To the first question it's usually, "I have no idea," and to the second question, our agent won't even offer an estimate, a ballpark. We know that estimating a firm number on a rehab is somewhat foolish (things often go way over budget) but we are looking for a starting point and find a dead end.

    My question to you fine folks: Am I expecting too much? I don't want to have someone do all our work and maybe I'm being a little selfish here. But this could be a beneficial relationship for us both as we plan on buying a 4 bedroom house to live in as well as several properties to rent for cash flow. 

    I really don't know. 

    I didn't read through all the comments, so I am not sure if it was mentioned, but it is illegal for the agent to give you an opinion about the neighborhood.  All we can do is provide you with public information on schools, safety, ect.  We cannot tell you what we think of the area.

    As far as reno costs, a good investor agent will know that and be able to tell you off the top of their head

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  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    5y

    @Jeff Terry

    I don't think you are asking too much, all you need is an ON-FIRE Agent. 

    This agent will gladly answer all your questions but make sure to also educate yourself so you are asking the right questions. You also want to respect their time because this kind of agent are very busy and does not have much time for those that need to be spoon-fed. Not all agents are investment savvy and you need to find the right one for you to have a successful investment.

    ON-FIRE Agent mean they are:

    O - Organize (The Investor-Agent must be well-organized)

    N - Network (The Investor-Agent must be well network with other Real Estate professionals like Lenders, Appraisers, Property Managers, Inspectors, Insurance Agent, Contractors, etc)

    F - Focus (The Investor-Agent MUST Focus on YOU)

    I - Investor/Investment-Savvy (MUST be INVESTMENT SAVVY)

    R - Responsive (Must Be responsive and answer your call/text)

    E - Experience (Must be an investor or have experience working with investors)

    You can find one under Network ->Real Estate Agent here: https://www.biggerpockets.com/...

    Goodluck

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  • Christopher B.
    Rental Property Investor · Knoxville, TN · Member since 2011 · 701 posts · 531 votes
    5y
    Originally posted by @Jeff Terry:

    My wife and I are planning on relocating to East Tennessee to live and invest. We don't know much about the region other than what our research churns up (numbers, market forecasts, Google Earth views) and we really need a trusted partner to fill in those blind spots. 

    Recently we've engaged with a realtor in Knoxville who has been willing to show us properties and fill in some details that aren't on the MLS listing. But when we ask "Is this a good neighborhood for rentals?" or "In your opinion, how many thousands will a rehab cost?" we get nothing. To the first question it's usually, "I have no idea," and to the second question, our agent won't even offer an estimate, a ballpark. We know that estimating a firm number on a rehab is somewhat foolish (things often go way over budget) but we are looking for a starting point and find a dead end.

    My question to you fine folks: Am I expecting too much? I don't want to have someone do all our work and maybe I'm being a little selfish here. But this could be a beneficial relationship for us both as we plan on buying a 4 bedroom house to live in as well as several properties to rent for cash flow. 

    I really don't know. 

     Hey Jeff, I am mobile and haven't had time to read through all the posts so excuse me if that has already been stated. 

    Agents have to abide by Fair Housing laws so are not allowed to answer the question "is this safe". Some may but technically they aren't supposed to. They will direct you to crime maps and data sources for your own research. DM and I will be happy to give you some insight into the different areas though (I am not agent). 

    For your 2nd question, "what is the rehab cost". Well, that is a toughy for anyone but especially agents. No offense to agents at all, there are some excellent agents out there but I have found most know little to nothing about the nuts and bolts of houses much less the cost to fix them. They're sales people. To be fair, what needs to be done or will be done isn't always 100% objective either. I am a GC, you could send me and another GC into a property  and we could come up with wildly different #'s if we're not on the same page on what the end goal is. Even if we were it still could be wildly off from eachothers #'s.

    My wife is an agent. She rarely takes on buyers as she mostly uses her license to support our real estate business but she knows the game from both angles of retail and investment. If you're looking for referrals on a good agent(s) to interview I can connect you two, she knows some excellent agents in town she could introduce you to that work both retail and investors, just DM if you want. 

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