I am always amazed when I see the typical real estate agent do their one deal of the year. Mostly, their customer is a family member who felt compelled to work with them because after all, “it’s family.” But what about all of the people who just work with the first agent that they find?
But if you are a professional real estate investor, you better have a much smarter way to hire a real estate agent.
First things first, I am a real estate agent so my opinions are biased. But I also have been a real estate investor for nearly 20 years, so I know a thing or two about how to screw things up when buying, selling, or turning a transaction. Most of these mistakes can be prevented by hiring a great real estate agent, and this can be done by following these general principles.
The 5 Key Steps In Hiring A Real Estate Agent
- Determine Your Goals First – Do not hire a real estate agent by default. What I mean is don’t call on a home, meet an agent, and then just start working with them. This common practice leads to more heartache and more lost momentum for investors than any other practice that I have seen. Write a plan first. Determine your specific goals, whether buying or selling investment property (or both). Make sure your plan is simple, but thorough (a good test is give it to one of your children and ask them to tell you what it says). Remember the old adage, “nobody plans to fail, they just fail to plan.”
- Do Your Research – Once you know what you want, go to Google and start a search with a focus on the attributes that you know you want in your real estate agent. If you cannot find them on the web, then they most likely are not wired into all of the resources that will help you optimize your returns. There are some great traditional agents … who are now retiring. Make sure your agent is somebody who is linked in to all of the modern real estate technologies.
- Demand The Best – This might come as a shock, but you typically pay the same for a crappy agent as you would for a great agent (in terms of commissions, not in returns!). The best real estate agents are very busy, and they will demand your loyalty on each specific transaction. If you have done your research, you should embrace working with an agent who requires a buyers brokerage agreement. Most do not (and most are not very good!).
- Nothing Lasts Forever – This is a sad fact of life, buy most relationships are not forever. If you feel that your agent is not giving you 100% attention and service, get another one! While there are only a handful of really good agents in your market area, you need to know that your agent values your long-term business and will ensure that your investment decisions get full attention.
- Pay Attention – Even great performers have a lapse. Create a checklist that you use every time you buy, and create one for every time you sell. As you become more experienced in your real estate investing, your lists should grow to include “all the ways you can screw things up.” Needless to say, I have a pretty long list :).
If you follow these basic rules for hiring a real estate agent, you will end up being a much more successful real estate investor. Fewer mistakes in the transactional process will most likely be a major part of your long-term ROI. Finally, whether you invest full time or just most of the time, make sure you surround yourself with the best minds in the business.