Realtors can be a valuable resource for real estate investors. If you don’t have access to the MLS (Multiple Listing Service), Realtors (or their assistants) can provide you with a wealth of information in addition to sending you comps (or comparable sales) for a particular property. It is important to remember that all relationships build over time, and that both parties must have something to contribute to this relationship.
Before becoming a full time real estate investor, I owned and operated a home inspection business for 17 years. During that time, I worked with and became friends with a number of Realtors. Our Company became the “go to” people for information and education. We did a lot of First Time Homebuyer Seminars and other events sponsored by Realtors and local real estate companies.
Even those agents that used another home inspection company to do their home inspections, called us for advice, agent training and general information. We respected the loyalty that they had toward their inspectors, and we positioned ourselves to be the company they would call if they either couldn’t get their first choice or if they decided to make a change for whatever reason. This was another case of “persistence definitely pays off”. By continuing to provide value to these agents without directly asking for anything in return, invariably we would get a call that resulted in booking inspections down the line.
How Can I Use Realtors In My Real Estate Investing Business?
I won’t go into all of them today, but there are so many ways that working with Realtors can benefit you and your business. Having at least one “Realtor mentor” on your team is a must as far as I am concerned. They are the experts in the retail real estate market and they can keep you from making costly mistakes.
In addition to comps, because they have access to the MLS, they can pull off different lists and statistics from this database. For instance, they can print off a list of the top REO agents in your area that you can then market to. I can guarantee you that each one of these agents has a list of investor buyers that get a call when they have a good deal or a new investment property they are about to list. What I have found is that most of the time these properties are overpriced from the get go. Working with a REO agent can give you a “heads up” when the bank is going to lower the price. Agents will also tell you sometimes that you need to “show some movement in your price” if you have already made an offer. Often times, this can be a very small price reduction that will get you the OK from the bank on your offer. Working with an agent that knows how a particular bank operates is invaluable in getting offers accepted.
Building Your Buyers’ List
The MLS can also give you a list of all of the folks that have paid “cash” for a house during a specific period of time. What a great way to build a buyers list! Not all of these investors want to be the one “hunting for the deal”. Some work other jobs and yet others just don’t want to hang out on the MLS, do direct mails or a lot of the other things needed to find good deals. They are happy to be on a bunch of buyers’ lists.
How Does This Benefit The Realtor?
Realtors love to have cash buyers on their lists. Whether or not a particular real estate agent specializes in working with investors, there will come a time in their career that they will need to unload a distressed property. Listing this property and letting it languish on the MLS for months on end, is not the route they would like to take. Getting the property sold quickly by being able to call up a list of hungry wholesalers or rehabbers makes the real estate agent look good to their seller and they make a quick commission. I have also bought properties that were not really “distressed” properties so much as they were just “handyman specials” that needed some repairs and updates. Often times these houses are just priced a little too high for the average wholesaler or rehabber on my buyers’ list. In those cases I would need to list them on the MLS. My Realtor may also call his list of investor buyers and present the house to them. When this happens, I pay a referral fee of $1000.00 to the agent for making the call if they buy the house. How did I get that amount? Easy …I asked the agent how much was typical. One thing I always do, is to call those Realtors that have helped me in the past. And, they were always glad I remembered them.
What Else Can I Do?
In most areas, if you are not a Realtor, you can become an “Affiliate Member of the Board of Realtors” in your area and it typically doesn’t cost a lot. This will allow you to have access to the names, companies, email addresses etc of all of the Realtors and you can market your services to them. You will also be invited to participate in affiliate sponsored events that will allow you to network directly with the agents. Let them know that you would like to be added to their buyers list. Remember that they will already have their “favorites” on the list. But in time, if you keep at it, you will get a call on a property.
You can position yourself as an expert in your field by sending out a newsletter every month or two. Don’t make the mistake of sending them a lot of useless stuff. Make sure when you do email them it is only occasionally and you provide them something of value. They are very busy folks so keep your newsletters to one page so they won’t be compelled to hit the “delete” button on the computer when they receive something from you. Realtors very much understand that what they do is a “team sport” and they will be happy to have someone on their team that makes them money, enhances what they do or makes their life easier in some way.