A real estate agent can be a very handy connection for a busy investor.
For one, they’re basically your lookout for up-and-coming deals. With their network, access to the Multiple Listing Service, and countless other tools, they can often spot a potential investment property weeks or even months before it hits the market.
...they can often spot a potential investment property weeks or even months before it hits the market.
On top of this, they’re expert negotiators and they know how to research a property -- including all the history and baggage that comes with it. Both of these skills can save you serious cash (not to mention time and effort) in the long haul.
Finally, they’re helpful when it comes to handling transactions. They can submit your offers, draw up your contracts, and keep the deal moving forward while you manage your investments in the background.
But let’s be clear here: These praises don’t ring true for every real estate agent out there. In fact, if you’re using an agent to assist with your real estate investing, you should be pretty picky about the one you take along for the ride.
What’s an investment real estate agent?
An investment real estate agent is a licensed real estate pro who specializes in helping investors find properties. They don’t need any specialized certification or training, but they should know their way around investment financing and be familiar with different types of investments.
Are you on the hunt for an agent to help with your investing efforts? Here are five traits that ideal investment real estate agents should have.
1. Great negotiation skills
The more you pay for a property, the tighter the profit margin gets. It’s crucial that your investment agent knows how to strike a good deal and snag properties for under market value.
Don’t be afraid to ask for a record of an agent’s most recent sales and compare it to local comps. Did they find bargains for past clients? How much did they save those buyers?
2. Lightning-fast communication
Time is of the essence in the investment world. A steal of a property isn’t going to sit on the market for months on end, and if you want it, you need to act fast.
Because of this time-crunch, it’s imperative you pick an agent who’s responsive, attentive, and quick on the draw. They need to respond quickly when there’s a potential deal on the line and be willing to drop everything for a last-minute showing or to draw up a bid. A delay of just a few hours can mean a lost deal and thousands in profits gone.
3. Local expertise
A good investment real estate agent is an absolute expert in the community they serve. They know all the neighborhoods and they’re knowledgeable about upcoming developments and changes. They know everything there is to know about local schools, amenities, and attractions, too.
It’s also important they have a finger on the pulse of the area’s rental market. This can help you set rents on buy-and-hold properties that you invest in.
4. Investment prowess
You need an agent who knows their way around the investing world -- one who’s worked with other investors before, handled cash sales, and dealt with the home inspection issues that often arise with fix-and-flips. If you’re planning to scour foreclosure auctions or probate sales for your properties, you’ll want an agent experienced in that arena, too.
Let’s be clear here, though: You don’t want an agent who’s also an investor themselves. That’s clearly a conflict of interest and would not work in your favor.
5. A well-connected network
If you want an agent who’s in the know about up-and-coming properties, it’s critical you choose one with a far-reaching network. They should be active in their community, a member of local real estate boards and organizations, and have a healthy online following. You want a busybody who knows every agent and brokerage on the market.
The bottom line: Choose your agent carefully
Remember: If you’re a prolific investor, your agent is going to get some serious commissions from your deals. Make sure they’re worth the cash and do your due diligence when choosing your partner.
They might just make or break you.