1st Meeting with Realtor (Potential Team Member) - What should I ask?

Question

When I read the great Free Beginner's Guide, I learned that I needed a team (i.e. Realtor, Lawyer, Title Agents, etc.) I'm meeting with a Realtor this week. What questions should I ask? What information should I get from the meeting to determine if the Realtor would be a valuable contributor to my team?

Your responses are appreciated!! Thank you!!

David Beard · Answer

Some have wholesaled HUD homes successfully, for instance, which requires an NAID-registered agent to place bids.  I think this has largely dried up, however, given the tighter inventory.  And these are folks who have the cash to purchase the property prior to reselling.  High volume wholesalers, especially if they have their own capital to guarantee closing, establish relationships with REO agents and other investor-savvy agents, and as a result get first dibs (essentially pocket listings).

Another angle is working short sales with an agent.  This is kind of a "pipeline" and numbers thing, since they take a long time and a healthy % of them will fail.  An experienced short sale agent can work these files through the negotiation/approval stage, earning a commission.

But I'm with you, you can't very well do "as-is" quick flips buying properties off the MLS.  Heck, rehabbers are having a very hard time finding projects with enough spread off the MLS, much less tacking on a wholesaler's fee.

Nice to see you posting again, BTW.  You looked kind of familiar when your pic came up.

Derek Faller · Answer

You might have problems getting a realtor to work with you at this stage if you are starting off with wholesaling since you are not going to be using them to buy or sell these properties. A realtor may be beneficial to you for running comps and CMAs, but if you aren't using them to buy or sell they aren't getting paid. I am not sure if you really need to bring a realtor on board at this stage if you are just doing wholesaling. The investors I work with are rehabbers, flippers, or investors that are buying rental properties.

I work with a lot of investors and do a lot of "free stuff" for them such as doing lots of CMAs on properties I know they aren't going to list or buy through me. However, these investor have used me to do deals when they can, and it all works out for both of us. If you aren't going to be buying or selling rental property or rehabbing homes for a while it might not be worth it to a realtor to work for you for free for a long time with the anticipation of a pay day in the future.

Back to your question though. If you are planning on finding a realtor you need to make sure the realtor has either worked with investors before or is an investor. A lot of realtors don't really understand how investors think or know exactly what they do. You need to be open with the realtor to what your business plans are and what you would expect from them, and what you will do for them. If you are going to be doing wholesaling for a while and wanting a lots of comps or CMAs or other information from the realtor, you might want to offer to pay them a consulting fee for the amount of work the do for you.

Paul B. · Answer

Okay, then again at the risk of asking a stupid question, why do you need an agent at this stage? I don't think agents will be of use to you in finding properties that you can wholesale, either on the buy *or* sale side. If someone can explain how an agent can play a part in a wholesaler's business, that will be very helpful to me. Perhaps I am overlooking something.

Stephanie Carter · Answer

Braden  C. JOAN DICKIE - Thank you for the knowledge!!

Paul B. -- I'm starting with wholesaling, but plan to buy and hold properties in the near future.

JOAN DICKIE · Answer

As a realtor, I would want to know what your business plan was.  How many properties you plan on buying, will you be a buy and hold, or rehab.  Be very upfront with the realtor.  Realtors want to know that you will be honest with them, because too many have been burned by investors taking their time, then not using them for transactions.

Paul B. · Answer

Apologies if I am overlooking something, but how does wholesaling work when you need an agent to find the properties?

My limited understanding of wholesaling is that you are trying only to tie up the property with either an option or a contract that is assignable for a fee. I don't see either of those scenarios working with an agent.

(Now, if you're looking to use an agent to buy houses you'll close on, renovate, and re-sell, that's something different altogether. I assume from your own description, however, that you're looking to wholesale.)

Braden C. · Answer

Are they willing to run dozens of comps before you actually get a property? Are they willing to write up dozens of low ball offers before you get an offer accepted?

As a successful wholesaler I can tell you that I would never be able to keep an agent, they would all quit. It's a lot of work for only earning a commission every month or two.

That's my opinion, maybe some other wholesalers who are doing multiple deals every month can chime in and give a different opinion.