I like to use good real estate agents whenever possible. Did you catch the key word in the last sentence? What was that word? If you said “good” you are correct. And what I mean by good is a full-time real estate agent. Agents that eat and sleep real estate on a full-time basis. Selling houses is how they make their living. That’s what I mean by a “good” real estate agent. But in all my years, I don’t believe I have run across a “bad” agent. Lazy? Yes, just like you can find in any profession. Uneducated in working with investors? Yes, and for investors, they are not the ones to work with in finding deals.

For the purpose of this article I will be referring to using real estate agents that are knowledgeable in selling distressed houses, pre foreclosures and ugly houses, houses with little or no equity to real estate investors. These are usually the real estate agents you find at your local real estate investors association, not the agents that strictly handle the pretty house sales from happy homeowner to happy retail buyer. And even at that, I prefer the aggressive agents that will make deals happen so everyone is satisfied. These are the agents to work with.

For example, if someone gives me their card and it says XYZ Real Estate Company, Happy Harry, Real Estate Agent “for all your real estate needs”, and then on the bottom of the card it says… “Accordion Player available for small weddings, anniversaries and funerals”, I say yikes! This person is not for me.

A good real estate agent can make a marginal deal a good deal. Part time agents can make a possible good deal into a non-deal. In this article, I will discuss tips for finding good agents, reasons for hiring those agents, and some thoughts on agent commissions and whether you should sell properties yourself.

By the way, do you know the difference between Realtors® and real estate agents?

Real estate agent and Realtor® are not the same. Although both are licensed to sell real estate, the basic difference between a real estate agent and a Realtor® is that a Realtor® must subscribe to the Realtor® Code of Ethics. While I don’t believe Realtors® are any better as far as their conduct than unaffiliated real estate agents, the designation is an attempt by the industry to regulate and, as such, deserves recognition.

Here are some of the things that are of great importance to investors that a Realtor® must promise as a part of the Realtor® Code of Ethics:

• They pledge to put the interests of buyers and sellers ahead of their own and to treat all parties honestly and fairly.
• They Shall refrain from exaggerating, misrepresenting or concealing material facts;
• They have a duty to disclose if they represent family members who own or are about to buy real estate, or if they themselves are a principal in a real estate transaction, that they are licensed to sell real estate.
• They shall not provide professional services in a transaction where the agent has a present or contemplated interest without disclosing that interest.
• They shall not solicit another Realtors® client nor interfere in a contractual relationship.

4 TIPS TO FINDING A REAL ESTATE AGENT
Finding a good real estate agent / broker is essential to enjoying a painless real estate transaction. The saying is “20% of the agents do 80% of the business”, and it is true. The question is how can you find a good real estate agent? The best agent for you doesn’t necessarily work at the largest brokerage, close the most transactions or make the most money. The best agent for you is an experienced professional who will:

• Listen to you – Know what you want and what you don’t want.
• Conduct him/her self in an ethical manner – Represent you with your interest at heart.
• Know your market area – Know what sells and at what price in that area.

Referrals are Always the Best Recourse – But Not Always Easy to Get for Investors
Most real estate agents stay in business because satisfied clients and attorneys refer them to others. While this is true in the retail market, it doesn’t always work in the “investor world”. So don’t be surprised if one of your investor friends doesn’t refer you to their agent. Why? Well if you haven’t figured it out, it’s this… Why would an investor who has an agent bringing them deals, refer them to you?!

The truth is, many real estate investors sometimes get a few deals and must concentrate on getting them done and can’t take another deal. So it stands to reason they will recommend their agent to you when they are busy. Right? NO! I can’t tell a lie. This is not always the case. Sorry, but many investors don’t like giving up their lead source. This area is even more protected with “bird dogs”. Go ahead and ask someone who their bird dog is and if you can have his number… go ahead, try it. They will look at you and say something like, bird dog? I don’t have a bird dog. What do you mean? Or oh yeah, but he’s a flake and kind of weird. I don’t think you’d like him. Meanwhile that same flakey weird guy brought the investor a $50,000 deal last month.

So what is the answer? Join your local real estate investors association and network. Agents are not hard to find. Usually the top agents are always well dressed (from being successful) and are walking and talking with papers or folders in their hands. They might have a button on their shirt or jacket or still be wearing their real estate company pin which they never take off! I met an agent on the beach two years ago. I don’t want to tell you where I had to look to read his name tag. Geeez, I’m on vacation here! Sometimes you just need to take a break! But that is what successful agents do. They advertise, network and never let a chance go by where they may make a good contact.

Search Online for Agent Listings
There are plenty of Web sites that will refer agents to you but that is no assurance of quality. The agents they refer are those who have paid the Web site owners a fee to be listed in their directory. A better bet is to Google the top real estate companies in your area and go to those Web sites and look up profiles of individual agents at offices near you. Another site I like is www.reonetwork.com as you can pick the area and see the profiles of the agents. Many of these agents work with bank foreclosures.

That last tip can bring you some nice deals once you form an association with one of those agents.

Often top agents are busy and can’t spend enough time with beginning investors. The flip side is working with newer agents who have the time to spend with you. In the case of newer agents, you must be very specific about what you want and guide them accordingly.

I have worked with newer agents and many try very hard to give you what you want. You just need to know more of what you want and how to direct the agent to help you. If they understand about investing, you have half a chance. If they don’t, you need to move on. Just ask a few questions and listen to the answers. Here’s how a conversation went with one agent who I asked about heating and the size of the house:

Me: “Does this house have oil heat with an oil tank?”
Agent: “Oh yeah, but don’t worry, that’s not a problem, the tank is underground.”
Me: “Whhhhat?” “I see this house is a little smaller than the other houses on the block, do you know how big it is?”
Agent: “Um, it’s something like 1600 round feet.”
Me: “Heh, heh, you mean square feet?”
Agent: “Well the house isn’t exactly square because the side is curved to meet the garage wall and they made it a breeze way.”
Me: “Whhhhhat?”

This was a very nice agent, but it was one to cut loose!

Check out Open Houses
By going to open houses, you can meet real estate agents in a non-threatening working environment and interact with them. Collect business cards and make notes on them. If you’re thinking about selling your home, pay attention to how the agent is showing the home. Is he polite and informative? Does she appear knowledgeable? Does he hand out professional-looking promotional material about the home? Is she trying to sell features of the home? If it’s a slow day, the agent will be more than happy to talk with you about your investment ideas.

Tip: Look for the agent whose face is plastered on park benches and on billboards and in telephone books. These folks are the movers and shakers you want to deal with!

For Sale Signs
Pay attention to the listing signs in your neighborhood. Make note of the day they go up and when the sold sign appears. The agent who sells listings the fastest might be better for you than the agent with the largest number of “for sale” signs. Results speak louder than words.

And if you buy ugly houses, see who has their sign up on other ugly houses. Here you have an agent who isn’t afraid to take these on. If they are selling the ugly stuff, that means they got to the owners of those ugly houses, right? Think they may get some more?

When I see an agents name on a few signs in that neighborhood, I say, that’s my agent! And I immediately call them up. Usually I am right, they are the “movers and shakers” in that neighborhood.

Reasons to Hire a Real Estate Agent

• They Know the Neighborhood
  Good agents are very knowledgeable about their neighborhoods and the market conditions that effect buying and selling. And if they don’t know something, they know where to find the information within their local contacts. They can compile the all-important “comparable sales” of houses in that immediate area and hand these facts to you so you can make a more informed decision. Plus, they can tell you about crime, schools, and other community facts. But the big thing here is comparable sales.For example, you may have heard that a home down the street was on the market for $350,000, and now it’s sold. But an agent will know it had upgrades and sold at $285,000 after 65 days on the market and after twice falling out of escrow. This is what you want to know before buying your investment property.
• Use Your Agent as a “Buffer” When Negotiating
  Top producing agents negotiate well because, unlike most buyers and sellers, they can remove themselves from the emotional aspects of the transaction. Agents also take the awkwardness and uneasy feeling away when they make that offer that is way below what a seller is asking. Sometimes sellers get offended when you stand there and offer $30,000 less than they are asking. But usually that is because they don’t fully understand why the offer is at a reduced number. A real estate agent can make the offer and explain why their client has come up with that figure.An example would be if the seller is asking $175,000 and the house needs $25,000 in work. You are looking at $200,000 plus your holding costs as your investment on a house that will retail for $225,000. This is not a good investment for the buyer. So the real estate agent delivers your offer of $130,000 but explains that the house needs a lot of work and most retail buyers will not want or can’t afford to do the work after purchasing the house. You know it’s the right price to buy, fix and sell, and didn’t have to make the offer in person. You can be a much stronger negotiator when you are behind the scene. You can make offers on houses that fit your criteria and price all day long. Heck, you’re not seeing anyone in person. But don’t make your offers ridiculous as even the agent can only take so many pies in the face!
• They Have the Education & Experience to Guide You
  I believe you should be more knowledgeable about investing in quick turning houses than your real estate agent, and leave the entire fact finding about the neighborhood, buyers coming in, comparable sales, and even decorating to them. But I do like that more real estate agents are getting the education and experience to work well with investors. These are the ones you should be seeking. Why not hire a person with as much education and experience as you? Working with this type of agent helps give us more time for other things in our lives as well.
• They Can Give You the Latest Market Conditions
  Real estate agents know the market conditions, along with what buyers want in a house in that area which will govern your selling or buying process. They know what buyers are looking for in homes. They can be very helpful in telling you if you add a half bathroom, your chances of selling quicker will increase. Or they may say everyone in this area wants finished basements, or finish storage areas in the walk up attic, or everyone is looking for wood floors, tile, granite kitchen tops etc. Hey, give them what they want if it’s in the budget.
• Tap into Their Networking Team
  Real estate agents network with other professionals; many who provide services that you will need to buy or sell. Due to legal liability, some agents will hesitate to recommend a certain individual or company over another, but they do know which vendors have a reputation for efficiency, competency and competitive pricing. As an alternative to individual recommendations, agents can give you a list of references for professionals with whom they have worked and provide background information to help you make a wise selection. This includes handymen, movers, cleanout companies, lawyers, insurance companies, and contractors.
• Contracts and Paperwork
  Real estate agents are trained to fill out all the paper work including the contract… that document most feared by beginning investors. Here again, they make sure everyone signs, and they get all the pertinent information into the hands of your attorney. Most times you never see the seller until the closing. And that’s assuming that you even go! I rarely go to closings anymore. Instead, if I’m buying, I leave a check and sign everything the day before at my attorney’s office. And if I’m selling, I sign the day before and all I have coming at the closing is a check. I know the real estate agent is going to be there to get their check and greet the sellers/buyers. Hey, they are potential clients for them in a few years

The Danger of Negotiating a Real Estate Commission
I often get asked…Should I ask my agent to reduce his/her fee? I am sure you are aware that real estate commissions are negotiable, right? If you hint around about commissions, some agents will offer a fee reduction right off the bat. Others will discuss it with you to see what you have in mind. Even though nobody will feel upset that you asked as it’s almost expected, I think that puts the investor into a “danger zone” The danger zone I refer to is if you cut the agents commission, they always seem to lose a little of their steam, drive, concentrated effort on “selling your house”.

If they are good agents who work hard, pay them the full commission. If you sell your house in 30 days and feel you are paying too much commission and it was the house that sold itself, change your thinking. Because one day you might do the same thing and the house will sit because you didn’t give it exposure. Believe me, I’d rather pay a full commission than sit with a house an extra 60-90 days. Those costs can be high depending on the winter and maintenance, holding costs and financing costs.

Sell the Property Yourself or Get a Real Estate Agent?
I know you probably want to save yourself 6%. But you have to ask yourself if you’re capable of selling this house. It’s that same question you want to ask yourself when it comes to doing the repairs on the house. Are you the best person to do this? Do you know anything about selling real estate? Yes, it can be done. And there is of course Foxton that charges 2% (which might be an alternative if you live in the Tri-state area of NY), but you need the exposure that the MLS system will provide for you. Don’t forget: Big profits in successful rehabbing depend on speed. Ask yourself these questions:

• Do you have good selling skills? A better than average personality?
• Do you have the ability to attract lots of qualified buyers?
• Do you have the time to show the property several times a week and usually at inconvenient times?
• Do you have market exposure?

In a nutshell… can you compete with a professional who does that for a living? If you can’t answer with a high grade for each question then my suggestion is not to “knock yourself out” and instead get a qualified real estate person to make your life easier. In the long run it will save you money. And that’s why I recommend that you use a top agent.