What does a Realtor look for in an investor?
Real Estate Investor · Kalamazoo, MI · Member since 2010 · 681 posts · 241 votes
What does a Realtor look for in an investor?
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Residential Real Estate Agent · Atlanta, GA · Member since 2010 · 2 posts · 4 votes
16yJackie, I am a REALTOR® who mostly works with investors. I look for investors who are seriously ready, willing and able to buy. They must be forthcoming about providing proof of funds in their name or their company name. I don't deal with investors who say "just show me some houses" without opening up about their ability to purchase. They must be willing to make realistic offers. I know the market is down right now, but don't expect to get a 4BR/2.5BA move-in ready home in a really nice part of Atlanta for $10K. Making ridiculous offers wastes everyone's time, the buyer, the seller and the agents. In a competitive market like Atlanta, you will most definitely get outbid. Also, I look for investors who take my professional advice on the market. When the investor is the seller, don't insist that just because you have painted the house and put some appliances in that all of a sudden you have increased the value by $50K. It is important for the investor to be informed and realistic about the market and their own financial situation.
32 Replies
- 16yCurt DavisBusiness MemberFlipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
Most normal Realtors are just looking for anyone to work with as they are withering away, they just need someone to represent.
Curt Davis - KAIZEN Realty538 Reviews - Real Estate Investor · Portland, OR · Member since 2009 · 660 posts · 244 votes16y
$$ and willingness to close....
- 16yMark UpdegraffBusiness MemberReal Estate Broker · Rochester, NY · Member since 2010 · 1k+ posts · 689 votes
Large Cash Bank Balance
Quick "As Is" Closing
Ability to do all the leg work, realtor simply provides contract...at least that is the case with mine!
Updegraff Group Realty4.746 Reviews - Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes16y
Hi, good points above, but a little deeper, as I did that side of the business as well.
Trust, someone who trusts my judgment and listens, they don't have to agree, but they do have to listen. The Realtor needs to earn your respect, if they are good at what they do, then build a good relationship. I'm not saying blindly follow them, I'm saying allow yourself to trust them to a point and let them know where that point is. A Realtor does not want to do a BPO if you are going to pull your own comps and ignor what he/she does.
A Realtor needs good communication with the client. If the investor has other things cooking and won't be able to buy for a few months (say while they rehab another house, I want to know when they are in the market and when they are not. Not good for the Realtor to spend time looking for a deal for you and when they call, you say "Oh, I can't right now, my money is tied up until December"!
Some Realtors try to make you think you are their best friend (and that can happen) but usually that's BS. Be business like, getting into small talk and getting to personal forces the Realtor to go places they may not really want to go. It can get to a point where you dread meeting with some people as they want to take up your time, go to lunch and talk about the grandchildren!
I preferred investors who were knowledgable about the area, who had opinions of what it was they would accept. This makes it alot easier to keep your eye out for that investor.
And if they find what has been stated as an acceptable investment, they need to act on it, or at least try....Someone who can make a decission, they don't need days to think about it or that has to spend days doing "strange" due diligence prior to contracting duplicating what the Realtor did. They need to know when to move on a property.
I guess you could say a knowledgable, business like, investor that is a good communicator and can act on acceptable deals.
They need to be organized, to the point that they can meet if something pops up, and have their financial ready to apply for financing as needed. They need to return phone calls in a timely manner. Had one guy that usually lost documents and comps I gave him and had to repeat things, I dropped him!
Someone who understands that the business of a Realtor is based on referrals. So if a good job is done, they will make that recomendation to others. Many times a Realtor will do alot of work for someone and a deal will never close. The Realtor does not get a dime. Harry home buyer may be another story, but an investor needs to realize the time spent and help the Realtor earn a living so that he can afford to spend that time searching the market and doing the extras. It works both ways!
- Real Estate Investor · Kalamazoo, MI · Member since 2010 · 681 posts · 241 votes16y
Thanks, Bill. As always, well said!
We are always looking for Realtors to refer short sales to us, so it's important that we understand why they would choose to refer them to us rather than another investor. My thought is that they want to refer to someone that can get them done in a professional, ethical and productive manner, save the homeowner from foreclosure and a deficiency judgment, and make sure the Realtor gets the full commission. Good communication, organization and making their job easier as Bill points out are all important.
- SFR Investor · Orange County, CA · Member since 2009 · 1k+ posts · 1k+ votes16y
One that walks in with a briefcase full of cash and says, "I'll take the most expensive house you have!".
No, seriously, I imagine a Realtor wants the same thing in an investor that they want in a prospective homeowner, the means and desire to purchase a home.
That said, many Realtors and RE agents do NOT know how to sell to investors. They have been trained to appeal to the emotional side of retail buyers, so they show off the home's remodeled kitchen, the new bathroom, the master bedroom's french doors leading to a redwood deck with the jacuzzi, etc.
Investors have a different set of criteria to satisfy and many Realtors and RE agents don't understand that. They find investors:
1. Aloof - "How could they not LOVE that solid oak mantel?"
2. Vague - "A 4 bedroom house or a 2 bedroom condo? Which is it?"
3. Stubborn - "I showed him 10 houses and NOT a single offer! Keeps saying something about 'cash-flow'!"
4. Cheap - "Come down another $10,000? What's the big deal?"
5. Fickle - "Now they want that OTHER house!"
6. Eccentric - "I showed him a house with no carpet and peeling paint and he practically kissed the walls!"
- Real Estate Investor · Kalamazoo, MI · Member since 2010 · 681 posts · 241 votes16y
Good points, Mitch.
In our case, we're making offers on homes that we have never seen (and never will see!) Of course we're relying on comps from the Realtor among other things in making our decision. - Real Estate Investor · Kalamazoo, MI · Member since 2010 · 681 posts · 241 votes16y
REALTORS! Where are you???
It's very interesting that this topic is a question addressed to Realtors, but it's only getting answers from investors.
I really would like to hear from Realtors regarding what they look for in working for an investor.
- Flipper/Rehabber · Orlando, FL · Member since 2008 · 263 posts · 147 votes16y
I am not surprised that no realtors have posted. For a while I was using the Active Rain forums and would pose similar questions and would get little or no response. I think that as we look at professional realtors (people who are in it for the long term) we have a transactional model and a relationship model of doing business.
1. In the transactional model it is about ease of process - you tell me exactly what you want, I find it, you buy it, next. It's simply about volume.
2.In the relationship - you tell me exactly what you want, I find it, you buy it, next. But here it's not about volume but about finding the "cherry deal" the "home run." It's about professional pride and value.In the first your approach is about transaction speed, the second about transactional value. Just find out who you are dealing with and build the relationship based on those terms.
TTFN,
Greg. - Involved In Real Estate · Anderson, SC · Member since 2008 · 350 posts · 70 votes16y
I look for Closers not Posers.
- Real Estate Investor · Portage, MI · Member since 2010 · 470 posts · 315 votes16y
Originally posted by Mark Brian:
I look for Closers not Posers.
Mark,
Thanks! You cut to the chase on that one! Jackie and I are both Realtors as well as investors. We know how we would convince Realtors that we are in your first category, but what would you expect?
Bill - SFR Investor · Orange County, CA · Member since 2009 · 1k+ posts · 1k+ votes16y
For Mark and Bill: Obviously you want somebody serious and not someone just yanking your chain. But, seriously, how do you tell the Closers from the Posers? That kind of criteria would be useful to those of us that don't want to be mistaken.
- Real Estate Investor · Kalamazoo, MI · Member since 2010 · 681 posts · 241 votes16y
Originally posted by Mitch Kronowit:
But, seriously, how do you tell the Closers from the Posers? That kind of criteria would be useful to those of us that don't want to be mistaken.I've sure everyone has run into "posers"......or what I call wannabees. They exaggerate their experience, puff up their importance, and make themselves out to be someone they are not. I've had people tell me they are closing x amount of deals a month, or making x amount of money, and come to find out, they haven't closed a single deal! I would much rather someone be honest and say they don't have any experience but are willing to do whatever it takes to learn. That's the person I'm going to give a chance. In my experience those that brag the most are usually the ones that have done the least. Whatever you're doing.....Realtor, investor, birddog, etc. I'm looking for the person that will do what it takes to get the job done in an ethical, smart, efficient manner. Don't tell me what you can do and how important you are......show me!
- Residential Real Estate Agent · Atlanta, GA · Member since 2010 · 2 posts · 4 votes16y
Jackie, I am a REALTOR® who mostly works with investors. I look for investors who are seriously ready, willing and able to buy. They must be forthcoming about providing proof of funds in their name or their company name. I don't deal with investors who say "just show me some houses" without opening up about their ability to purchase. They must be willing to make realistic offers. I know the market is down right now, but don't expect to get a 4BR/2.5BA move-in ready home in a really nice part of Atlanta for $10K. Making ridiculous offers wastes everyone's time, the buyer, the seller and the agents. In a competitive market like Atlanta, you will most definitely get outbid. Also, I look for investors who take my professional advice on the market. When the investor is the seller, don't insist that just because you have painted the house and put some appliances in that all of a sudden you have increased the value by $50K. It is important for the investor to be informed and realistic about the market and their own financial situation.
- Real Estate Investor · Phoenix, AZ · Member since 2009 · 1k+ posts · 1k+ votes16y
Originally posted by Tonya Jones:
Also, I look for investors who take my professional advice on the market.
Therein lies the problem. 99% of realtors have no clue about comping a property and I would most definitely not be interested in their opinion of the market except to evaluate them. I think pretty much any good investor is going to know more about market conditions than a realtor. - Real Estate Investor · Portage, MI · Member since 2010 · 470 posts · 315 votes16y
Originally posted by Vikram C.:
Originally posted by Tonya Jones:
Also, I look for investors who take my professional advice on the market.
Therein lies the problem. 99% of realtors have no clue about comping a property and I would most definitely not be interested in their opinion of the market except to evaluate them. I think pretty much any good investor is going to know more about market conditions than a realtor.Vikram,
You and I are often on the same page on issues and I value your input! This said, I have to disagree with you on this one! We buy & sell short sale properties Nationwide and without the market evaluations and comps supplied by the Realtors that we work with, we would have no clue. I have no faith in the "Zillow" type market search. I have checked them and their info is often way out of line! We still ask for comps and also evaluate our offers, but the Realtor's local knowledge is of critical importance. Even when we are in our own local area and run our own comps from the MLS, we also evaluate the recommendations of the local Realtors that we work with. I like to think that we are good, but another set of eyes and another perspective never hurts!
Bill
- Real Estate Investor · Phoenix, AZ · Member since 2009 · 1k+ posts · 1k+ votes16y
Bill, I do not disagree with you. In your business model where you do short-sales in many locales, you pretty much have to do it that way.
But for someone doing rehab flips, where a bad deal is not merely lost profits but the loss of significant capital, I think it is important NOT to rely on a realtor's opinion. You can listen to what they have to say but you have to make the call based on your own judgment of the market. If a realtor wants their investor to listen to their opinion of the market and decide based on that, I would suggest not doing business with that realtor because it could cause a lot of aggravation for both parties. (Unfortunately, I am speaking from experience here.)
- Real Estate Broker · Fort Pierce, FL · Member since 2009 · 221 posts · 95 votes16y
Allow me to do what I do best. Pull comps based on specific market/neighborhood data from reliable resources. Understand that I am not a pawn to be used while other receives the compensation. Realize your generalized request will result in generalized performance or results. Know that I will ask questions, many questions, so that I can fully comprehend your needs. Once the criterion is complete, know that I will be moving 100 mph to get what you want. So, be able to pull the trigger when previously stated unless unforeseen circumstance occur and know that most events are foreseeable.
My career choice is just that, I have and will continue to work hard for my rewards. If your suggestions involve violating rules or laws (no, I do not know all rules or laws), I’m not your realtor. I know some have read the previous sentence and said to themselves, “that’s obvious†but, many have said “I guess I will not be calling Stanâ€. I apologize to both.
Be motivate about your requests, but not emotional, because I certainly will. Remember, it’s a numbers business. After all is said and done, if there is something you can educate me on; then do so, I will listen.
- Real Estate Investor · Lake Worth, FL · Member since 2009 · 263 posts · 92 votes16y
Investor should offer
1. Cash or POF from a legitimate company.
2. Investor who is knowledgeable about their strategy (rehab, buy and hold, wholesale)
3. An investor who has defined target areas, property types, sizes, conditions and has an eye for the diamond in the rough for rehabbers.
4. Someone who asks for the comps for the solds and for sales prior to looking at the properties. (The condition of the home, price, financial situation, and seller obligations (moving, foreclosure) dictates who the buyer should be or if the seller is unrealistic.
5. Someone who is realistic, professional, wants to make this business a career and decisive.What to look for in a Realtor
1. Someone who is organized, knowledgeable about what investors are, professional.
2. They should be moral and ethical providing Unbiased data (comps).
3. Should be willing to educate the investor on why a bid is to low or when there are better valued properties for the investors particular strategy.
4. The Realtor should be communicating with the Investor when the investor hasn't called them. (If the Realtor can't look for deals from criteria I provide then they are not sales people)
5. Understand that Investors will always want info or to view properties or submit bids ASAP. (It is a competition for us) - Residential Real Estate Broker · Baltimore, MD · Member since 2010 · 8 posts · 6 votes15y
Hello All,
I am both a real estate agent ( broker actually) and an investor, and believe it or not I started both careers at the same time!
I list and sell bank foreclosures and short sales and I have personally bought and sold hundreds of homes in the past 13 years for either rehab/resell, wholesale or buy/hold rental.
Please don't treat the realtor like a slave and use them! I hate it when investors would demand to see 25 houses and then not buy one or worse yet buy it through their brother in law who was a licensed agent after you showed them the property! That's why a realtor might ask you to sign a buyer broker agency agreement - to guarantee that if you do buy at least they'll get a paycheck!! Realtors do spend a lot of time on these deals - a lot more than you think, although you may not see it- a lot of it is behind the scenes.
Nowhere is there such an inexpensive professional as the realtor! First of all, we must be licensed with the state! And it's generally performance based - if the property doesn't sell no commission is paid! Can you go to see a doctor and only pay them a fee if your cancer is cured?
You are also paying realtors for the inherit knowledge they bring to the table ( similar to a doctor or lawyer) - And therefore it would be wise to choose a realtor who is also an investor and has "walked in those moccasins". Except for commercial deals, realtors generally don't get paid "up front". Do something different for the realtor, send them a gift card, take them to lunch, but don't expect them to work for free! If you treat them fairly they will respond in kind.
Please keep in mind that time is money, and there are also other expenses, gas.etc. The average cost for a realtor is about $ 2000 per year to "hang one's shingle" out so to speak (licensing fees, MLS fees, signs, board fees. lock boxes, lock box entry cards, etc).
Also, do what you say you will - don't give an earnest money deposit only to have it bounce or ask her/him to hold it until you have enough money in the account!
If you establish a good relationship and the first deal goes smoothly, and I don't mean in reference to the title work which can get screwed up, I mean make sure you have the Cash $ to close, then YOU WILL PUT YOURSELF ON THE TOP OF THE PILE!!! Who will that realtor call first next time a good deal comes on the market?
Remember, we as bank REO listing agents can't purchase these homes ( in most cases, it's considered a conflict of interest), but I let my investors know if that particular property would be one that I would invest in if I could. I give honest advice!
And don't forget that many of the REO banks require us to put the utilities in OUR name! Generally, we don't even get paid for that!! They simply reimburse us ( about 3 months later) and then they have the audacity to charge us an invoice fee for submitting the invoice! We have to either hire someone or do this extra bookeeping ourselves! And to boot, most of these REO listing side commissions are so low ( some are about only $ 800 for these cheap 20-40k properties) that if the realtor didn't get the selling side of the commission at least once in a while we would be losing money ( or making more money at McDonald's working for minimum wage - I kid you not! ).
Once an investor has compiled a criteria list for me, I as a realtor, am looking for the investor who can pay cash, not run me around ragged, perhaps do drive-bys to weed out some properties, give me valid proof of funds ( not a hard money pre-qual) that I can document and send to the bank, and close quickly without hassles. I do work with investors who need hard money loans, but these deals are often passed up by the banks in favor of those with cash money.
After you have each met face to face, and established a rapport and criteria list, having the ability to receive a scanned RE contract, sign, scan and send right back is a plus. Once the realtor has worked with you or you have a good track record, they will come upon these deals and want to close quickly and this can expedite the procedure. Remember, time is money!
I hope this has helped, feel free to send me an email if you like,
[EMAIL REMOVED] - Landlord · Seattle, WA · Member since 2010 · 3k+ posts · 1k+ votes15y
Interesting to read through these expectations. I get a sense of what I might expect from the relationship.
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes15y
I think the whole point is that BOTH sides want to get the best representation possible.
Many new investors want to buy certain commercial properties but do not have the backing or liquid funds to do so. Instead they want to BORROW from someone else or use TRANSACTIONAL FUNDING and the funder wants a massive amount of points like 10 to 12.The buyer can't pay so wants it rolled into the loan which the lender laughs at.
You can suggest all these crazy deal structures out there and most of the time the deal won't fly.
So when I work with someone I look at probability of a project funding and closing.If they meet x,y,z criteria then chances are high of success.If they fall into other categories the chances of success are very low.
There are exceptions but you run a profitable business by sticking to what works the most.Everything you do needs to bring a quantifiable return on time equaling money.
I personally like to run my business working with serious individuals and creating a lasting lifelong relationship.You learn their expectations and vice versa and create a team with great results.
I do not work residential. If you are selling residential REO's you are better off on the buyer broker side as you get more money on the co-op. There are houses in Atlanta right now for say 6,000 to 7,000.The commission listing these is maybe a couple hundred bucks to 800. I can't justify the time involved to do that.Now If I was flipping it myself then I can justify the return.
The residential REO side many investors do not know how the banks suck the brokers/agents dry on fees.
They make you get certifications which costs hundreds of dollars.Then they pay a crappy commission of say 2 percent on the listing side.Then for submission of offers they make you use an electronic platform system that you get hit with monthly fees or a per transaction fee in the hundreds.
This does not include the other costs as mentioned above.
I think both sides will work together better once they understand each other more.
- Landlord · Seattle, WA · Member since 2010 · 3k+ posts · 1k+ votes15y
Originally posted by Joel Owens:
I think the whole point is that BOTH sides want to get the best representation possible.I think that is a point, but IMO the main point has more to do with misunderstanding the needs of each party. An investor is generally speaking far more knowledgeable than a homeowner and has substantially different criteria for what they will purchase.
Knowing that an investor can perform and knows what they are doing is important.
As an investor I look for RE partners that can be lifelong partners that add value to any deal as well.
- Real Estate Investor · Kalamazoo, MI · Member since 2010 · 681 posts · 241 votes15y
Great responses, Vicki and Joel.
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