Must Ask Questions When Meeting Realtors in New Market

Question

Hello everyone,

What are your top 3 to 5 questions that you always ask a realtor when considering a new market? Any hard lessons learned that resulted in these becoming "must asks"?

Thanks,

Mark

John Underwood · Answer

I do my own research when locating a market and a house. The Realtot just let's me in to see the house.

I'm not dependent on a Realtor.

Collin Hays · Answer

I'll second John. A realtor is occasionally useful in negotiating, and then helping with all of the loose ends in closing.  Unfortunately, more times than not, I have found realtors more of an impediment to the process than anything, although they are typically punctual at the closing when they receive their commission check.

Realtors are salespeople. And that's OK. I've been a salesman my whole career.  But I'm not going to go to a car lot and ask the salesman how much experience he has, if he personally owns a car, what car he recommends, and if this is a good time to buy a car.  His opinion on all of these things is about as valid is my own.

DYODD.  Do Your Own Due Diligence.

James Carlson · Answer

I guess I'll be the realtor here who defends our job ...

Here's what I think buyers who come to me should ask:

Can you tell me the laws in X, Y, Z cities? In the Denver metro area alone, for instance, I can count at least 11 different cities. Most prohibit non-owner occupied STRs. Those that allow them vary widely. Some restrict STRs by density. Some restrict vacation rentals by nights you can rent. Some rent by overall caps. Know thy laws!!

How many deals have you closed with people buying specifically for a short-term rental?I work almost exclusively with Colorado investors and second-home buyers. I'm shocked how many times I see listings advertised as "would make a great STR" or "is a successful vacation rental," and then I have to fight with the listing agent about the fact that either:

A) the sellers are operating illegally b/c it's not allowed in that city; or B) No, in fact, $42k gross revenue does not make a good STR investment if you're asking $700k for the house.

You want someone who does this all the time, every day.

Finally, I'd want to send them a few homes and ask them their thoughts. If they think five out of five homes would work, that's a red flat.

Michael Baum · Answer

I am with @Collin Hays and @John Underwood. I know pretty much exactly what I am looking for and how to calculate everything.

A good agent is nice in an area you have no knowledge. Those little things that differ from area to area, or even block to block.

For example, we went through Sedona, which we had never been. It was a nice getaway and gave us a chance to check out a possible new area for us.

Sedona is wracked with restrictions, sometimes less than a few blocks away can be A-OK for STRs while 3 blocks away, they are banned.

Having an agent like @Martin D. who is an investor himself and is very knowledgeable about the Sedona area and knows every little detail about the restrictions AND the political climate that can drive the changes is very valuable.

Ken Boone · Answer

Do you own STRs in this market, if so, how many?

Are you currently seeking more in this market? Why or why not?Assuming they are STR operators themselves, what are the biggest challenges you face in this market?I only use realtors that have first hand STR experience.

Wilson Lau · Answer

100% you need to do your own due diligence and run your own analyses. One thing that I recommend is to send 1 or 2 properties to the realtors - have them give you their analyses and explain how they would approach this deal. Oftentimes that's enough to filter out majority of the average realtors.

Andrew Steffens · Answer

Definitely vet their prior sales history, you can do this via Zillow

Marcus Auerbach · Answer

Find an agent who is also an investor. Most agents would not even know what market rents are for individual properties (beyond what you can google).

The only real question I would ask is: based on my goals, where do you see the best opportunities and how do they look like?

Must Ask Questions When Meeting Realtors in New Market

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