Chapter 5: Building Your Workforce
Finding a Real Estate Agent
There are all kinds of books that discuss various interviewing techniques for real estate agents. All of them offer valid questions. Here are some basics you should ask:
- Years of experience
- What kind of house do they live in?
- Do they deal with investment properties?
- Do they own investment properties?
Years of experience: Based on my adventures, it’s nice to find an agent who has been around a location for at least 10 years. Over a 10-year period, this agent has seen bull markets and bear markets. They also know the area really well.
What kind of house do they live in now? If the president of General Motors is driving around in a Toyota, I probably wouldn’t buy a GM product. The same applies here. Agents who have spent their lives living in condominiums will be experts on condos. Houses? Maybe—maybe not.
Do they deal with investment properties? The rules change slightly for investment properties versus primary residence. Someone who understands these nuances is extremely useful.
Do they own investment properties? This trumps all other questions. Agents who own investment properties can be an invaluable resource because they understand the market, the rental market, and all the pitfalls and rewards of investing.
How to find an agent? If you used www.Craiglist.org to find properties for your business model, pay attention to the real estate ad. Is an agent listed? Write down phone numbers. Keep track of who is selling. Check out local newspapers or online websites. Do their names continue to reappear?
Another effective way to find a real good real estate agent is to visit them in their natural habit: open houses. When scanning the newspaper or craigslist, if you spot a real estate agent who might be worth looking at then go to their open house. Talk with them. Treat it like an interview. Don’t tell them you’re looking to buy something unless you are. But by meeting them face to face, your intuition will tell you if they are a good match for you or not. If you like what you hear, make sure to get their business card and follow up with them. Make sure you tell them that you met them at their Open House and you were impressed with them.
Why? Flattery goes a long ways.
What NOT to do: Blindly call any real estate office. Your phone call is typically dumped into a queue, responded to by the first warm-blooded person who happens to be not busy.
It is important to find a good Real Estate Agent first before talking to any lenders. As discussed previously a majority of real estate agents are new and the same holds true with lenders. You want experience on your side.
But experience is only part of the picture. With experienced real estate agents, they know quite a bit about what it takes to close a real estate deal. This not only includes the details with dealing with the seller and their agent. It is also how to deal with the lender. Experienced eal estate agents know lenders who are able to close deals.
If you think about it, using the “chain” analogy: The chain is only as strong as it’s weakest link. If a real estate agent knows how to close a deal, and the lender continually can’t, then the real estate agent is going to dump that lender and find another. Why? Because all the parties involved only get paid if a deal can close. The same holds true for experienced lenders dealing with inexperienced real estate agents. Considering between 20 and 30% of all deals fall out of escrow, not many people who stay in business if 1 in every 3 deals fell apart. The difference between those deals that close versus ones that don’t is the team of people that are behind it.
This not only includes you but it is also in the hands of your real estate agent and your lender. If you have a strong, experienced real estate agent behind you then anything is possible. Since more and more listings are bank repos and foreclosures, having an experienced agent who knows how these deals work with the bank is critical to finding good deals.
The rest of Chapter 5 covers how to effectively manage not only your real estate agent but also your Loan Officer. And what does PMI have to do with Captain Ahab? More great information awaits. Get the book now!
