Does your realtor analyze and/or vet potential deals first?

78 Replies

I'm currently networking with realtors in my area hoping to find a great deal to either BRRRR and/or Flip.

So far the realtors I've talked to are just sending me listings on the MLS without vetting the deals based on my criteria.

Sometimes they don't even provide market rent or recently sold comps for the subject properties.

How am I supposed to efficiently analyze a potential deal without having any of the pertinent information?

Are you guys taking the time to research every listing that gets sent to you to find the most recent comps, find out what similar properties are renting for in the area, etc? Or is your realtor digging into the listings to vet out the junk and then only sending you the properties they think could work for you? I'm trying to figure out if my expectations are too high or if the realtors that I've connected with are just lazy and trying to take the easy way out without having to put much time or effort into making deals happen.

For example last week I had a realtor send me 67 properties on the MLS. After looking at the first 2 I quickly realized they didn't meet the criteria I had sent them. I didn't even bother looking at the other 65 since I know the deals were not vetted at all.

So I guess what I'm asking is should a realtor be vetting out properties based on your criteria or is it typical for them to just send you everything that's out there and leave it up to you to do the due diligence, research and analysis yourself?

I do my searching in reverse.... I send properties to the realtor and make them vet it. I have an idea of what I think it should cost and what the rents are then I ask them to verify it/send documentation. I look at my realtor as providing technical/local knowledge, I can browse MLS myself. I also assume my realtor is networked and can help me position my offers so they are as strong as possible.

I don't buy a lot of houses nor am I shopping for high dollar deals... my realtor has to make a living and it's certainly not from my business haha.

Originally posted by @Matt K. :

I do my searching in reverse.... I send properties to the realtor and make them vet it. I have an idea of what I think it should cost and what the rents are then I ask them to verify it/send documentation. I look at my realtor as providing technical/local knowledge, I can browse MLS myself. I also assume my realtor is networked and can help me position my offers so they are as strong as possible.

I don't buy a lot of houses nor am I shopping for high dollar deals... my realtor has to make a living and it's certainly not from my business haha.

I'm just starting out so I'm leaning more on the realtors to bring me deals that they feel fit my criteria. Once I have a few deals under my belt then I'll likely use your approach. At the moment I'm still learning the market and looking for their assistance. If I just wanted to see everything on the MLS I could do that myself like you said. They are ultimately being paid a commission for their work so am I wrong in assuming they should be putting some time and effort into the deals?

For example last week I had a realtor send me 67 properties on the MLS. After looking at the first 2 I quickly realized they didn't meet the criteria I had sent them. I didn't even bother looking at the other 65 since I know the deals were not vetted at all.

So you wanted them to pull sales and rental comps on all 67 of those properties? That is not a realistic expectation.

What is realistic is for you to look at those 67 properties, pick 2 or 3 of them out that you might think work, then ask for the comps on those 2 or 3 properties.

@Brian Garrett Realtors should set up a search for you based on criteria such as list price, number of bedrooms and bathrooms, square footage, single or multi family, etc. etc.  That should be basic enough for any realtor to do.  Is this what you're referring to?  Or are you expecting them to run an analysis on the property and tell you "buy this one it will give you a xx% return."  In my opinion even if the realtor did provide this feedback you'd be a fool to follow it without really scrutinizing how they arrived there.

Regarding sales comps, they should be able to give you some help with that, but keep in mind they have other clients so maybe they want you to trim that list of 67 down to the ones you have real interest in before doing so.  If you don't want to look at that many listings why do you expect that they will?

For rent comps, they can pull mls data on that as well, though that tends to be more limited.  Depending on the market Craigslist, Hotpads, Zillow, etc. can be the best place to look to compare rental amounts.

Except you need to understand how the numbers work, that's where you the investor comes into play. You should analyze the property, figure the numbers out, then get conformation form the realtor. If your stuck ask them for help.

Like this:
You: Realtor what areas(zipcodes) to be strong rental? What kind property do you see as most in demand for that area? What's the rent range I can expect from that area.

Now you will have a idea of where to search. They'll send you listings that meet your criteria (size, prop type, price range). Then that's on you to find out what makes one better than another in terms of your investment, it's subjective. Then you find something to put an offer in and the agent will tell you hey let's do xyz to make our offer stand out/stronger. Or agent will say hey so an so is a ahole and always does best and final so lets offer low at first...

You the investor need to take ownership of the investment part.... lean on the agent for technical/local knowledge or off market deals.

My first question is why are you working with multiple realtors (unless you're shopping in multiple markets)? Find a experienced, knowledgeable, and investor-friendly buyer's agent who you "click" with. Meet (or have a phone conference) with them and make sure they understand your search criteria, and then have them send you listings that match those criteria. If the listings don't match your criteria, update the criteria, not the realtor!

As far as research and due diligence, that's a 2-way street. We realtors can only screen for so many things in the MLS (#beds/baths, square footage, price, location, amenities, price per sq ft, etc.), so at some point you have to review the listings carefully and do some research yourself. Come up with a short list, research what you can, drive the properties to come up with an even shorter list, then ask your realtor to pull comps and maybe schedule showings on a handful of properties to maximize your time.

Ironically, the best real estate agents are also the busiest real estate agents, so be respectful of that just like you would with any other professionalThat's not to suggest they shouldn't lend you their expertise and provide good customer service. But to expect a realtor to research and provide comps, rehab, and ARV estimates on multiple properties in advance of you even expressing an interest in those properties is unrealistic, and would be a colossal waste of time.

So you have to learn to be a realtor-friendly investor!

On a related note, you'll probably have people chiming in saying "Don't waste your time, there aren't any deals on the MLS anyway". This is absolutely not true. Even here on Bigger Pockets, in a recent poll, almost 72% of new investors purchased their first deal from the MLS. 

The other argument is "95% of deals on the MLS are a waste of time". This may be true. But guess what? There are currently 2,812 single family homes listed in my county (Pinellas) on the MLS. 5% of that is 140 deals that might be worth looking at!

I'd also argue that 95% of wholesale deals are a waste of time as well. And wholesale deals are usually "cash or hard money only, take it or leave it, close next week, no inspection contingency", whereas I can negotiate MLS listings (for example, I recently bought a property listed on the MLS for $120k. My actual purchase price was $96,200...you can't do that with a wholesaler).

Bottom line, find one great real estate agent, and that's all you'll ever need!

Originally posted by @Russell Brazil :
For example last week I had a realtor send me 67 properties on the MLS. After looking at the first 2 I quickly realized they didn't meet the criteria I had sent them. I didn't even bother looking at the other 65 since I know the deals were not vetted at all.

So you wanted them to pull sales and rental comps on all 67 of those properties? That is not a realistic expectation.

What is realistic is for you to look at those 67 properties, pick 2 or 3 of them out that you might think work, then ask for the comps on those 2 or 3 properties.

No that's not at all what I was implying. I would like them to not send me 67 properties that don't fit my criteria so we don't waste each others time. Instead I'd rather them only send me the 2-3 that they think could work based on my criteria. If I'm simply looking at everything listed for sale on the MLS which I could do myself then I'm not understanding what value they are adding and/or being paid a commission for.

Originally posted by @Shawn Loughman :

@Brian Garrett Realtors should set up a search for you based on criteria such as list price, number of bedrooms and bathrooms, square footage, single or multi family, etc. etc.  That should be basic enough for any realtor to do.  Is this what you're referring to?  Or are you expecting them to run an analysis on the property and tell you "buy this one it will give you a xx% return."  In my opinion even if the realtor did provide this feedback you'd be a fool to follow it without really scrutinizing how they arrived there.

Regarding sales comps, they should be able to give you some help with that, but keep in mind they have other clients so maybe they want you to trim that list of 67 down to the ones you have real interest in before doing so.  If you don't want to look at that many listings why do you expect that they will?

For rent comps, they can pull mls data on that as well, though that tends to be more limited.  Depending on the market Craigslist, Hotpads, Zillow, etc. can be the best place to look to compare rental amounts.

I expect they would because it's their job and what they are being paid a commission for. 

Of course I would never rely solely on their information and I would analyze every deal I'm interested in myself as well but how am I supposed to recognize a deal to pursue without knowing the comps, market rents, etc?

Originally posted by @Matt K. :

Except you need to understand how the numbers work, that's where you the investor comes into play. You should analyze the property, figure the numbers out, then get conformation form the realtor. If your stuck ask them for help.

Like this:
You: Realtor what areas(zipcodes) to be strong rental? What kind property do you see as most in demand for that area? What's the rent range I can expect from that area.

Now you will have a idea of where to search. They'll send you listings that meet your criteria (size, prop type, price range). Then that's on you to find out what makes one better than another in terms of your investment, it's subjective. Then you find something to put an offer in and the agent will tell you hey let's do xyz to make our offer stand out/stronger. Or agent will say hey so an so is a ahole and always does best and final so lets offer low at first...

You the investor need to take ownership of the investment part.... lean on the agent for technical/local knowledge or off market deals.

I don' think you are understanding the point that I'm trying to make. I'm aware of everything you said but it doesn't address the underlying issue. I know how to analyze deals when I have the proper numbers. This isn't about me being able to analyze a deal it's about a realtor being able to provide accurate information in order for me to do so.

Originally posted by @Brian Garrett :
Originally posted by @Russell Brazil:
For example last week I had a realtor send me 67 properties on the MLS. After looking at the first 2 I quickly realized they didn't meet the criteria I had sent them. I didn't even bother looking at the other 65 since I know the deals were not vetted at all.

So you wanted them to pull sales and rental comps on all 67 of those properties? That is not a realistic expectation.

What is realistic is for you to look at those 67 properties, pick 2 or 3 of them out that you might think work, then ask for the comps on those 2 or 3 properties.

No that's not at all what I was implying. I would like them to not send me 67 properties that don't fit my criteria so we don't waste each others time. Instead I'd rather them only send me the 2-3 that they think could work based on my criteria. If I'm simply looking at everything listed for sale on the MLS which I could do myself then I'm not understanding what value they are adding and/or being paid a commission for.

 What criteria have you given them that the properties in question do not meet?  If it is things that are quantifiable like bed/bath sq. footage etc. I would agree they should be able to filter out anything that doesn't meet your criteria.  If you're looking for them to filter out based on subjective criteria like good deal/bad deal, good luck.

Originally posted by @Brian Garrett :
 If I'm simply looking at everything listed for sale on the MLS which I could do myself then I'm not understanding what value they are adding and/or being paid a commission for.

It isnt 1977. Buyers find their own properties these days from looking through an MLS portal of some sort. The agents job is making the offer, negotiating, connecting you with lenders, attorneys, contractors, inspectors, shepherding the transaction to close, using their relationships to get you the property. An agent finding the property for you just isnt how the business works anymore since the advent of the internet. If you are relying on your agent to pick 2 or 3 properties for you...they are going to likely just pick the 2 or 3 with the highest commission. If you want the list they are giving you narrowed, give them a narrowing criteria.

Im not only speaking as an agent, but also as an investor who uses other agents for my out of state purchases. I find the properties I want myself, then I have an agent write my offer.

Originally posted by @Jeff Copeland :

My first question is why are you working with multiple realtors (unless you're shopping in multiple markets)? Find a experienced, knowledgeable, and investor-friendly buyer's agent who you "click" with. Meet (or have a phone conference) with them and make sure they understand your search criteria, and then have them send you listings that match those criteria. If the listings don't match your criteria, update the criteria, not the realtor!

As far as research and due diligence, that's a 2-way street. We realtors can only screen for so many things in the MLS (#beds/baths, square footage, price, location, amenities, price per sq ft, etc.), so at some point you have to review the listings carefully and do some research yourself. Come up with a short list, research what you can, drive the properties to come up with an even shorter list, then ask your realtor to pull comps and maybe schedule showings on a handful of properties to maximize your time.

Ironically, the best real estate agents are also the busiest real estate agents, so be respectful of that just like you would with any other professionalThat's not to suggest they shouldn't lend you their expertise and provide good customer service. But to expect a realtor to research and provide comps, rehab, and ARV estimates on multiple properties in advance of you even expressing an interest in those properties is unrealistic, and would be a colossal waste of time.

So you have to learn to be a realtor-friendly investor!

On a related note, you'll probably have people chiming in saying "Don't waste your time, there aren't any deals on the MLS anyway". This is absolutely not true. Even here on Bigger Pockets, in a recent poll, almost 72% of new investors purchased their first deal from the MLS. 

The other argument is "95% of deals on the MLS are a waste of time". This may be true. But guess what? There are currently 2,812 single family homes listed in my county (Pinellas) on the MLS. 5% of that is 140 deals that might be worth looking at!

I'd also argue that 95% of wholesale deals are a waste of time as well. And wholesale deals are usually "cash or hard money only, take it or leave it, close next week, no inspection contingency", whereas I can negotiate MLS listings (for example, I recently bought a property listed on the MLS for $120k. My actual purchase price was $96,200...you can't do that with a wholesaler).

Bottom line, find one great real estate agent, and that's all you'll ever need!

I appreciate your insight but I disagree on the need to have one realtor. The more realtors that know what I'm looking for the better chances I have of them bringing opportunities and deals to the table. Limiting myself to one realtor doesn't make any sense from my perspective. I want every realtor in town to know the deals that I'm looking for.

Originally posted by @Russell Brazil :
Originally posted by @Brian Garrett:
 If I'm simply looking at everything listed for sale on the MLS which I could do myself then I'm not understanding what value they are adding and/or being paid a commission for.

It isnt 1977. Buyers find their own properties these days from looking through an MLS portal of some sort. The agents job is making the offer, negotiating, connecting you with lenders, attorneys, contractors, inspectors, shepherding the transaction to close, using their relationships to get you the property. An agent finding the property for you just isnt how the business works anymore since the advent of the internet. If you are relying on your agent to pick 2 or 3 properties for you...they are going to likely just pick the 2 or 3 with the highest commission. If you want the list they are giving you narrowed, give them a narrowing criteria.

Im not only speaking as an agent, but also as an investor who uses other agents for my out of state purchases. I find the properties I want myself, then I have an agent write my offer.

I don't expect and/or need a realtor to do any of the other things you mentioned besides help find deals.

I'm not looking for them to negotiate, connect me with lenders, contractors, etc.

I do give them a narrowed criteria that's my point. They don't bother to vet based on that.

It sounds like I don't need a realtor since it's not 1977 anymore and I have to do everything myself anyways.

@Brian Garrett your criteria should filter deals. For example if you are looking for a 3 bedroom, 2 bath, 2000 square feet for $250K in a certain zip code, you should know the rent range and market value ahead of time. Your criteria may be too wide. Your agent is just putting filters on the MLS. They don't generally analyze deals. It starts as a wide bucket. You filter the 67 properties down to 5. You look at those properties and filter it down to 2-3. Your agent pulls comps on those and you make offers on one or two.

We look through new listings in our criteria every day and reject most of them for one reason or another. If they have a price drop, they may be reconsidered.

With more experience, you will be able to filter through things very quickly.

You don't need one you can have a attorney close for you

Originally posted by @Joe Splitrock :

@Brian Garrett your criteria should filter deals. For example if you are looking for a 3 bedroom, 2 bath, 2000 square feet for $250K in a certain zip code, you should know the rent range and market value ahead of time. Your criteria may be too wide. Your agent is just putting filters on the MLS. They don't generally analyze deals. It starts as a wide bucket. You filter the 67 properties down to 5. You look at those properties and filter it down to 2-3. Your agent pulls comps on those and you make offers on one or two.

We look through new listings in our criteria every day and reject most of them for one reason or another. If they have a price drop, they may be reconsidered.

With more experience, you will be able to filter through things very quickly.

Thank you for the insight Joe.

Originally posted by @Matt K. :

You don't need one you can have a attorney close for you

This sounds like the better option for me. Thanks Matt.

@Brian Garrett - It sounds like you are misunderstanding the role of a buyer's agent and the function of the MLS.

The single greatest tool at a realtor's disposal is the data contained within the MLS - which we pay handsomely to access, and are responsible for maintaining ourselves (by way of entering listings and sales data).

Here's the thing, all ten of those agents you're stringing along are looking at the same data, from the same source. Find one agent who understands your needs and can mine that data for you, and the other 9 become redundant.

And what if three of those agents pitch you the same deal? You'll quickly burn those bridges when the other two realize you bought it through someone else and were just wasting their time all along.

I'm on the side of quality over quantity in this case (which, ironically, is probably the root cause your original complaint).

Originally posted by @Jeff Copeland :

@Brian Garrett - It sounds like you are misunderstanding the role of a buyer's agent and the function of the MLS.

The single greatest tool at a realtor's disposal is the data contained within the MLS - which we pay handsomely to access, and are responsible for maintaining ourselves (by way of entering listings and sales data).

Here's the thing, all ten of those agents you're stringing along are looking at the same data, from the same source. Find one agent who understands your needs and can mine that data for you, and the other 9 become redundant.

And what if three of those agents pitch you the same deal? You'll quickly burn those bridges when the other two realize you bought it through someone else and were just wasting their time all along.

I'm on the side of quality over quantity in this case (which, ironically, is probably the root cause your original complaint).

Although I understand your perspective I have to disagree. All agents do not have the same data and/or the same sources, off market deals, pocket listings, relationships, etc. The more agents who know what I'm looking for the better.

@Brian Garrett

You will have to do a few deals with a realtor before getting to the point where they bring you deals and pocket listings.

After I bought my first investment property, I had a realtor bring me my second deal, which was a pocket listing. They could see that I was serious.

I no longer am primarily looking for deals on the MLS. There is too much competition over too few deals. Not only that but other investors who do far more deals than me are getting those pocket listings.

Originally posted by @Anthony Gayden :

@Brian Garrett

You will have to do a few deals with a realtor before getting to the point where they bring you deals and pocket listings.

After I bought my first investment property, I had a realtor bring me my second deal, which was a pocket listing. They could see that I was serious.

I no longer am primarily looking for deals on the MLS. There is too much competition over too few deals. Not only that but other investors who do far more deals than me are getting those pocket listings.

The realtors I've talked to know I'm serious but I understand what you mean. Thanks Anthony.

@Brian Garrett Here's how it works for me (most of the time):

Buyer Finds Listing -> Builds Preliminary Spreadsheet -> Decides if Interesting -> Sends Listing to Realtor -> Realtor a.) Gives Opinion of Area, b.) Assesses Reasonable Rent Level Herself, c.) Views Property -> Based on Feedback, Buyer Decides to a.) Fly Out, b.) Make an Offer, c.) Punt the Deal Based on Feedback from Realtor

These days I usually end up at the "Punt the Deal" stage because what I would pay is far below the listing price.  Those go into a "Folder" on Trulia so that I can periodically check back to see what's going on with the property.  Sure, I occasionally get suggestions or rumors of properties that are pocket listings, coming to market, might be available in 6 months, etc. but that's a really small percentage.  

I know the bigger challenge for me would be to trust anyone to do the preliminary screening.  In part because I also want to see the deals that *don't* make sense so that I can get a feel for where the market is going.  Otherwise I have no idea if a deal that I'm interested in is a "1 in 5" or a "1 in 500" opportunity.  I also like to take a stab at doing my own comps.  Especially since I have data and old spreadsheets on properties that didn't sell that were listed.  Again, that helps to know if my expectations are flawed or if the seller/listing agent just doesn't understand the market.

And if you do want a realtor to do 67 rent assessments, I hate to break it to you but they'll probably just hit up Rentometer, a Zestimate style guess, or something else that's quick.  That really doesn't add value to you (the buyer) at all.  

Originally posted by @Andrew Johnson :

@Brian Garrett Here's how it works for me (most of the time):

Buyer Finds Listing -> Builds Preliminary Spreadsheet -> Decides if Interesting -> Sends Listing to Realtor -> Realtor a.) Gives Opinion of Area, b.) Assesses Reasonable Rent Level Herself, c.) Views Property -> Based on Feedback, Buyer Decides to a.) Fly Out, b.) Make an Offer, c.) Punt the Deal Based on Feedback from Realtor

These days I usually end up at the "Punt the Deal" stage because what I would pay is far below the listing price.  Those go into a "Folder" on Trulia so that I can periodically check back to see what's going on with the property.  Sure, I occasionally get suggestions or rumors of properties that are pocket listings, coming to market, might be available in 6 months, etc. but that's a really small percentage.  

I know the bigger challenge for me would be to trust anyone to do the preliminary screening.  In part because I also want to see the deals that *don't* make sense so that I can get a feel for where the market is going.  Otherwise I have no idea if a deal that I'm interested in is a "1 in 5" or a "1 in 500" opportunity.  I also like to take a stab at doing my own comps.  Especially since I have data and old spreadsheets on properties that didn't sell that were listed.  Again, that helps to know if my expectations are flawed or if the seller/listing agent just doesn't understand the market.

And if you do want a realtor to do 67 rent assessments, I hate to break it to you but they'll probably just hit up Rentometer, a Zestimate style guess, or something else that's quick.  That really doesn't add value to you (the buyer) at all.  

Thanks for your input Andrew. Glad you found a system that works well for you!

Not only do I not expect it, I wouldn't want anybody but me vetting my own properties - not even as a first pass.

Your realtor is there to filter properties based on the criteria you set as far as dollar amount, neighborhood, layout, etc.  It is completely and totally up to the purchaser to then go through and start weeding out properties that won't work.

That is never going to be your agent's job.

The agent is going to be awesome at negotiating your deal, handling all the deadlines, working with and recommending vendors like inspectors and all of the details.  But choosing the property, or even whittling the options down to a short list?  

No.

I have a property that I bought about two years ago.  I called my agent and asked him to submit an offer.  He said, "Linda, that is a turn-key property.  You told me you wanted fixer uppers."  I said "I know, but that price is about $15,000 under market.  I want it."

He never would have picked that property out for me, not because he didn't know it was under market, but because I never told him that I was looking for a property like that.  It's now one of my best performing properties.

If I gave my agent a list of everything I'm truly looking for, it would look something like this.

Properties in these 12 communities

Any property less than $x.  Except I'll go a little more if it's a good deal.

Any property that is a fixer upper and meets these Y criteria for price and remodel level (how the hell he'd find this, I have no idea, so I just tell him "fixer uppers")

Any property at more than x% under market

Any property that I get a great feeling about when I see the ad (again, impossible for him)

You've got to be dynamic enough to look through what you're sent and understand, within the first few minutes, whether or not the property will work.  Nobody expects you to work through all of the calculations for 71 properties.  I also wouldn't expect a realtor to do it either.

I feel bad for my agent.  I have bought properties when I told him I wasn't looking.  I've bought fixer uppers when I was looking for turn keys and turn keys when I was looking for a project.  

Finding a great deal is about 90% gut and 10% research.  If your agent is throwing away 75% of the properties before you even get to see them, you are at a severe disadvantage.

I also think you are way over-estimating the number of pocket deals that occur in any given market.  Even if the 10 realtors you're working with each have one, you're unlikely to ever hear about it unless you've already proven yourself to be a good customer.  Those pocket deals go to a select small list of people that the agent knows can and will perform.  Pocket listings that are offered outside of that group are languishing because there is something wrong with them.  So unless you're that guy, then the 10 agents really are going to feed you the same data, for the most part.  

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