5. How to Choose a Real Estate Agent
How do you find a real estate agent to work with? Most agents don't know how to work with investors. We'll show you a simple way to find an agent and some other useful information.
Let’s talk about how we choose a real estate agent or broker for our next, or first!, real estate transaction.
First, lets define a few useful terms:
Real estate agent- the licensed person representing you for your transaction.
Realtor- This is just a trade name for an agent who belongs to the national association of realtors. These two terms are used often used synonymously but for our purposes mean the same thing
Broker- A step above an agent. Every Real Estate Agent must work under a broker until certain requirements are met. Then they can start their own firm or work for themselves.
Brokerage- The company the agent works for
Listing Agent- or sellers agent. The agent who put represents the seller and puts the listing on the MLS
Buyers Agent- The agent representing the buyer
Most agents can represent either side of the transaction and even sometimes both
It also worth noting that at the commercial level, we call the person we are working with a broker, even if they’re just the equivalent of an agent at the brokerage they work for.
If you’re only going to remember one thing from this episode remember this. The *VAST majority of agents don’t know how to work with investors. Most of the agents out there are sales people trying to sell the American dream of a three bedroom two bath house with a large walk-in closet and white picket fence to the joneses. They don’t understand what a cash-on-cash return is, never heard the term value-add, and don’t know how to calculate ROI. That’s simply not what selling someone a primary residence requires. Commercial agents are accustomed to working with investors, while the majority of residential agents are not.
So how do we find those magical unicorn needle-in-a-haystack individuals who will make all your cash flow dreams come true?
Easy. go to the BiggerPockets website. If you haven’t heard of BiggerPockets then go to biggerpockets.com and start browsing. It’s one of the best resources out there for new and experienced real estate invstors. All you have to do is search the forums for real estate agents in your market. Unless your target market is super small, someone has probably already answered that question and you can find a few names to research. You’re especially in luck if an agent in your market posts on BiggerPockets. That means they really want to work with investors! So take some time to filter through as many posts as you can about potential agents in your market. Your research here will pay off. Double bonus points if they also own rental property themselves. You’ll probably only find this out by talking to them on the phone. Which is something you should definitely do. As hot as real estate is now, a phone call goes way farther than email.
If your potential agent only handles residential properties and works well with investors, they should also be able to do a bit of hand-holding if it’s your first deal. After all, they only make their money when the deal closes. However, that doesn't mean to lean on them for everything. Their time is very valuable so don’t waste it and your broker will enjoy working with you.
Now. hopefully, your potential agent will have not only a website, but free access to their local MLS portal on their website. Why does this matter? Your favorite real estate search website like Zillow , Trulia, or my favorite, Realtor.com doesn’t always list all the properties listed on the MLS. Also, the MLS is not one big national MLS. Each MLS is local or regional in nature. So the whole time you’ve been searching on Zillow or Trulia while in your pajamas late into the night you haven’t even been seeing all the properties listed on the local MLS. Even if the agent you want to use doesn’t have this access, some agent in the market will, so just use theirs!