Real Estate Investment

A real estate agent is not a real estate investor and may not understand what you are trying to do as an investor. That is okay, as real estate agents are there to help you buy and sell properties, not to make decisions on where or why to invest.  Once you understand the rental market in an area from talking to your property manager, you will want to get information on the sales market.  A real estate agent will provide you with data on the market as it relates to sales, but remember they are real estate professionals, not real estate investors. 

You can contact a real estate agent in an area where you are interested in buying and have them provide you with lists of homes available for purchase.  Give them the characteristics of the property you are looking for based on the information your property manager recommended. Through their electronic database called the Multiple Listing System, or MLS,  real estate agents can find properties quickly that match your criteria.  As a potential buyer, the services of a real estate agent are completely free.

A real estate agent can determine how long a property has been on the market and if their have been any recent price reductions.  A property that has been for sale for an extended period of time or has been recently reduced may mean the seller is getting anxious.  These circumstances should allow you to negotiate a lower price.   

A real estate agent must understand the local market from a perspective of buying and selling.  You should interview multiple agents and find one with knowledge of the area, command of trends in pricing, an understanding of what homes have the best resale potential, and an idea of the best areas to buy.  Your agent should also have a good attitude toward negotiating.  Some real estate agents are timid and do not like negotiating, and would therefore encourage you to make an unnecessary full-price offer.  If an agent is unable to provide this information or lacks the understanding of the market, move on to the next potential candidate.

 

When interviewing a potential candidate to serve as your real estate agent, ask the following questions:

1. How long have you been in real estate, and how long has your firm been in business?

2. How many real estate agents work in your company?

3.  What commission do you charge when selling a property?

4. Do you charge any additional transaction or MLS fees?

5. Are you able to take additional pictures of a property and email them to me since I am out of state?

6. How do you feel about attempting to negotiate a substantial reduction in sales price in potential purchases?

7. Where are the best school districts in your area?

8.  Are there any areas that are currently being revitalized?

9. In your area, does the seller or the buyer select the closing agent?

10. Are there any closing costs that are typically paid by the seller in your area?

11. What type of home seems to sell the fastest in your area? Get specifics, including number of bedrooms, bathrooms, area of town, and style of home.

12. Can you provide references of investors you currently work with who are satisfied with your performance? 

This entry was posted on Sunday, December 27th, 2009 at 5:59 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.