3 Tips for Choosing a Realtor for Your House Hack

11 Replies

Hi everyone. Here are what I believe to be the most important qualities of an exceptional realtor for your first house hack. 

1. Running Numbers

At a bare minimum, it's important find a realtor that generally understands the numbers, but it's even more helpful to find a realtor that will take the time to sit down with you and run the numbers together to ensure you know exactly how the financials of the deal look. If they don't know how to run the numbers of a house hack or aren't willing to take the time to sit down with you, then they probably aren't a great choice when you are making the largest financial investment of your life.  If your realtor says that 'everyone home is an investment', slap them on the face and run as fast as you can. That is a nightmare waiting to happen.  

2. Isn't Pushy

Realtors should be more transparent with their self-interest. They are looking to make money. They certainly would not be helping you pull together your house hack if they weren't going to profit on the back end. This isn't a bad thing - it's just important to be transparent about the situation. If someone says "I really don't care about the money! I care about providing value to you!" - The lie detector determined that is a lie. Ask them if they'll help you for free and see how quickly they don't care about you making a lucrative investment. 

Like I said, it's not a bad thing - the bad thing is not being aware about the reality of the situation. With that being said, if you feel like your realtor somehow thinks every property is a good deal or pushes you in a direction that makes you feel uncomfortable, then please find a realtor who is patient, calm & empathetic of your situation and emotions. 

3. Extra Mile & Responsiveness

Find a realtor that is extremely responsive that is willing to go the extra mile for you. There will be times throughout the house hack process when you have a question, and not hearing back from your realtor for 20 minutes may feel like 20 hours. It's not necessarily the end of the world, and more often then not the situation isn't as urgent as you may think, but regardless, having a realtor that is empathetic towards the fragility of the situation and responds quickly to mitigate your stress is extremely valuable and important. It may be worthwhile to ask your realtor how many clients they are currently working with. If they have 10 clients and you are the 11th, you may not get the attention and responsiveness that you need, especially if you are not a seasoned investor that's been through the process many times. 

Hope this helps! 

@Austin Negron you've made some valid points here but I would like to add market knowledge and expansive network to this. 

If we are speaking out 'house-hacker' category specifically, they're typically first time investors and homebuyers who are not as fluent in areas, developments, and growing areas in a city, it is the agent who guides them along to indicate whether this is a rough neighborhood or a gold mine because of xyz. Additionally, having the network to tap into would be imperative as they prepare for inspections, contractors, and other key players to making their investment the most fruitful it can be. There lies the x factor as to why one investment is one for one person but great for another. 

Hi Lien. I appreciate your comment. Market knowledge and an expansive network are certainly qualities of a good agent. I would say those are qualities that should be inherent with every realtor. 

Especially in a competitive area like Boston, having a strong understanding of the market & access to contractors, inspectors, etc is the industry standard (or at least should be if it's not), where as the qualities I mentioned are characteristics that go above & beyond what most realtors are willing to offer. Is that fair to say? 



Originally posted by @Lien Vuong :

@Austin Negron you've made some valid points here but I would like to add market knowledge and expansive network to this. 

If we are speaking out 'house-hacker' category specifically, they're typically first time investors and homebuyers who are not as fluent in areas, developments, and growing areas in a city, it is the agent who guides them along to indicate whether this is a war zone or a gold mine because of xyz. Additionally, having the network to tap into would be imperative as they prepare for inspections, contractors, and other key players to making their investment the most fruitful it can be. There lies the x factor as to why one investment is one for one person but great for another. 

 

@Austin Negron I definitely agree. I had to part ways with the first agent I used because he was extremely pushy and didn't value the numbers I was trying to achieve. In the end, it worked out great because it taught me what I didn't want in an agent!

That sounds about right. The reality is that most realtors are accustomed to selling homes to buyers who don't see it as an investment but a home to live in for 20-25 years (granted this is somewhat an investment in it of itself). But realtor's weren't originally meant to have a strong understanding of investing strategies, let alone the blatant misalignment of incentive - realtor's get paid a higher a commission when the purchase price is higher - when in reality a better system would be if realtor's were compensated more (at least on the buyer's side) if they were able to get the lowest price for their client. 

But I don't see that happening anytime soon. I agree that sometimes learning what you don't want to more fruitful than what you do. Hope you are well - Austin

Originally posted by @Kevin Zolea :

@Austin Negron I definitely agree. I had to part ways with the first agent I used because he was extremely pushy and didn't value the numbers I was trying to achieve. In the end, it worked out great because it taught me what I didn't want in an agent!

 

Agree with @Lien Vuong -- without local knowledge you could use an agent or broker from anywhere in the world.

As for Running the Number -- I would on rely on an agent or broker to run the numbers on comps, area rents, etc. Agents and brokers aren't in the insurance, mortgage, investment, management, legal, etc. markets. You need to do your own due diligence. An agent or broker has zero "skin in the game" after a transaction. It is within their financial interest to make a deal look lucrative. 

It's important to keep in mind that agents and brokers make money based on transactions. A good agent is focused on relationships, but they make money on transactions.

None of my comments are meant to be anti real estate agent or broker. These professionals play a very important role in the investment process. However, they play a role and serve a function.

Good list, although I would add some knowledge about rehab and construction as well.

I agree, it is extremely beneficial if an agent has a general feel for how much things might cost in addition to having a strong relationship with some contractors that will treat their clients well. Of course that's not to say the client should blindly believe an agents estimates, it serves as a good place to start.
Originally posted by @Andrew Syrios :

Good list, although I would add some knowledge about rehab and construction as well.

 

I agree that first time home buyers should not blindly trust an agent's calculations, however from my experience clients have very much appreciated agents that are willing to take the time with them to highlight how the numbers may play out - especially for those who are making their first investment.

For someone like you, it makes sense that you probably don't care if an agent sits down and run numbers with you or not - but I would also consider you to be a seasoned investor, who has done these calculations many, many times before.

I also believe that in one way or another, agents very much do have skin in the game after the transaction - their performance and willingness to help with most likely either lead to referrals or not - which quite directly effects their future financial interests. 

With that I suppose I would add to the list to not work with agents who are looking to make a quick deal stemming from their own self-interest. 

Originally posted by @Dan K. :

Agree with @Lien Vuong -- without local knowledge you could use an agent or broker from anywhere in the world.

As for Running the Number -- I would on rely on an agent or broker to run the numbers on comps, area rents, etc. Agents and brokers aren't in the insurance, mortgage, investment, management, legal, etc. markets. You need to do your own due diligence. An agent or broker has zero "skin in the game" after a transaction. It is within their financial interest to make a deal look lucrative. 

It's important to keep in mind that agents and brokers make money based on transactions. A good agent is focused on relationships, but they make money on transactions.

None of my comments are meant to be anti real estate agent or broker. These professionals play a very important role in the investment process. However, they play a role and serve a function.