Concerning situation with my agent

Managing Your Property
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Concerning situation with my agent

Christopher Davis
Rental Property Investor · Boulder, CO · Member since 2019 · 144 posts · 72 votes

Hello, Need advice.

I had my property in Nashville rented for three years with a particular agent. We didn't have great chemistry, so when the lease ended and came time for a new tenant, we parted ways. I re-hired the agent who helped my buy the property originally. With her we had good rapport, although it was a bumpy experience. She has a lot of hustle and talks a great game about protecting my investment, streamlining procedures, etc. 

Currently, she has overseen repairs and we are now trying to place a new tenant.

However, we have not yet signed any property management agreement. I asked her to provide this document so we could agree on terms and sign and move forward. She instead sent me a sales contract, with "SALES" struck out (annotated) and replaced with "RENT." The document had absolutely nothing to do with property management. It was a sales contract with, after 9 legal pages of irrelevant information, had a couple sentences added about her commission.

I rejected the document, and asked her to provide me with a Property Management Agreement.

She then sent me a "Confirmation of Agency Status" one page contract. Again, a document of her representing me in a Sale. It again had absolutely no information on property management. Even less than the first document.

My requests are not getting through to her for some reason. I am traveling out of the country at the moment and we are communicating via email.

She claims to have done this many times before but seems to have no clue what I am asking for. I will not sign any document like she has sent, I want a proper property management agreement that outlines all terms, correctly, for both our protection and clarity.

What should I do? Am I being too strict? Is this a major red flag of her professionalism? I am totally baffled and very concerned.  

Please I need some professional advice. Thank you very much.

Chris

 

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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
2y
Quote from @Christopher Davis:

If she is an "Affiliate Broker" then it means she meets the requirements of owning her own brokerage, but she is currently working under another Broker.

Look, it's real simple. She has no clue what she is doing and you shouldn't waste any time trying to train her to be to suck less. I would look for a professional manager and move on.

Remember: cheaper doesn't mean you'll make more money.

Start by going to www.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. You can also search Google and read reviews. Try interviewing at least three managers.

1. Ask how many units they manage and how much experience they have. Feel free to inquire about their staff qualifications if it's a larger organization.

2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, especially if they violate the terms of your agreement.

3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 6% management fee but the extra fees can add up to be more than the other company that charges 10% with no additional fees. Fees should be clearly stated in writing, easy to understand, and justifiable. Common fees will include a set-up fee, a leasing fee for each turnover or a lease renewal fee, marking up maintenance, retaining late fees, and more. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate, particularly if you have a lot of rentals.

4. Review their lease agreement and addenda. Consider all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.

5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance, late rent, evictions, turnover, etc. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that policies are enforced equally and fairly by their entire staff.

6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. A tenant complaining online might indicate that the property manager handled them appropriately, so be sure to ask the manager for their side of the story.

7. Look at their marketing strategy. Are they doing everything possible to expose properties to the broadest possible market? Are their listings detailed with good-quality photos? Can they prove how long it takes to rent a vacant property?

This isn't inclusive but should give you a good start. If you have specific questions about property management, I'll be happy to help! 

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  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    2y
    Quote from @Christopher Davis:
    Quote from @Marcus Auerbach:

    Why do you hire agents to do property management? That's like ordering pizza in a Chinese restaurant. While I support hiring a professional PM (not a cheap one), you verbally hired her and she is already doing work for you..

    If I were in your situation I would call her, explain the situation, apologize for walking back my agreement, compensate her for what she has done so far and hire a good PM.

    I'm not sure you understand the situation. Walking back what agreement? The second agent helped me buy the house originally. At this point I have basically wrapped up my account with the first (dedicated professional) property manager who couldn't do her job properly. While I was disappointed with her work, the second agent swooped in and talked a great game about protecting my investment and managing the property efficiently. She helped me buy the house originally. And she wants to position herself to be there when I sell. It started out as a verbal agreement because time was a factor. I trusted her as a professional and a friend. Then she sent me sales and agency contracts, and three weeks have gone by with no updates on the repair work. She has seemingly disappeared.  I have no evidence that she has in fact done any work for me. No updates, no receipts. So this is entering ugly territory. So what should I apologize to her about again?..  


     Apparently not, but you are changing the story a bit. Your original post mentioned you had a verbal agreement and she started working for you.

    "Currently, she has overseen repairs and we are now trying to place a new tenant."

    I was not there, I don't know the details, all I have is the post from you. I always try to treat people with respect and that includes everyone working for me. But you do you.

    My main point was to hire a professional PM and not an agent. Most agents (like 98%) know almost nothing about residential rentals. That's why I finally decided to get my own license 10 years ago, I was fed up as an investor.

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  • Account Closed
    Investor · Houston, TX · Member since 2017 · 20 posts · 2 votes
    2y
    Quote from @Christopher Davis:
    Quote from @Nathan Gesner:
    Quote from @Christopher Davis:

    If she is an "Affiliate Broker" then it means she meets the requirements of owning her own brokerage, but she is currently working under another Broker.

    Look, it's real simple. She has no clue what she is doing and you shouldn't waste any time trying to train her to be to suck less. I would look for a professional manager and move on.

    Remember: cheaper doesn't mean you'll make more money.

    Start by going to www.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. You can also search Google and read reviews. Try interviewing at least three managers.

    1. Ask how many units they manage and how much experience they have. Feel free to inquire about their staff qualifications if it's a larger organization.

    2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, especially if they violate the terms of your agreement.

    3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 6% management fee but the extra fees can add up to be more than the other company that charges 10% with no additional fees. Fees should be clearly stated in writing, easy to understand, and justifiable. Common fees will include a set-up fee, a leasing fee for each turnover or a lease renewal fee, marking up maintenance, retaining late fees, and more. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate, particularly if you have a lot of rentals.

    4. Review their lease agreement and addenda. Consider all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.

    5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance, late rent, evictions, turnover, etc. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that policies are enforced equally and fairly by their entire staff.

    6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. A tenant complaining online might indicate that the property manager handled them appropriately, so be sure to ask the manager for their side of the story.

    7. Look at their marketing strategy. Are they doing everything possible to expose properties to the broadest possible market? Are their listings detailed with good-quality photos? Can they prove how long it takes to rent a vacant property?

    This isn't inclusive but should give you a good start. If you have specific questions about property management, I'll be happy to help! 

    Thanks very very much. I will ask these questions. I'm on the NARPM site, but how can I interpret the search results? There are seemingly hundreds of results for PMs in Nashville. But no commentary or a way to rank or evaluate.

     Hi,

    I feel your pain about this. In my experience 2 things work well: 1) Verified recommendations through long term or trusted contacts. If you are out of state, join local community orgs and make connections. In my experience this works well in person, but maybe you can do this online too. 2) BBB ratings. I go with strictly A+ rated vendors/companies and still check reviews online, but I've found that BBB reviews and ratings are a good indicator of how efficient they are.

    The 'manage the PM' seems to be a tough reality of the PM industry. Hopefully it will change at some point.

    Good Luck

    Zara

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