There are a few things I still remember when I obtained my real estate license right after graduating college:

 

·      Agents make more money listing properties NOT selling.  Typically, the listing agent makes four of the six percent fee. And the selling agent collects the remaining two percent. 

·      Like any profession some are honest, and some eventually become politicians.  Your agent needs to earn your trust. 

·      An agent’s personal financial interest is NOT aligned with your best interest.  The more you spend, the more they earn!  

·      Many agents will lie (remember future politicians) and claim they are experienced in multiple cities.  Most are not.  After you narrow your search down to an area, find an agent strong in that area.  They will know the schools, stores, best rental property locations, average appreciation rates, etc. 

STEPS TO FIND A GOOD RENTAL PROPERTY REAL ESTATE AGENT

1. Talk to your banker

2. Network referrals

3. Check agents’ certifications/designations

4. Research your finalist using social media

5. Interview at least three agents

6. Trust your instincts

7. READ THE CONTRACT!

 

TALK TO YOUR BANKER

Unless paying cash you need funding, so start with a banker to secure your loan with pre-approval for TBD $$.  Bankers deal with a number of real estate agents and can usually recommend a few.

REFERALS FROM YOUR NETWORK 

Ask friends and family members if they can recommend a real estate agent they had a good experience with. Use social media to ask for referrals. Join LinkedIn and Facebook Rental Property Groups.

You need an agent with experience working with clients purchasing similar types of rental properties you are looking to purchase.

CHECK AN AGENT’S DESIGNATIONS: 

• NAR (National Association of Realtors): A member of the National Association of Realtors (NAR) who has formally agreed to abide by the group’s code of ethics.
• CRS (Certified Residential Specialist): Completed additional training in handling residential real estate.
• ABR (Accredited Buyer’s Representative): Completed additional training in representing buyers in transactions.
• SRES (Seniors Real Estate Specialist): Completed training aimed at helping buyers and sellers aged 50 and older.

RESEARCH YOUR FINALIST

After narrowing down your list, check out their websites and social media accounts. Take a look at their online reviews as well. 

Check with your state’s real estate regulator board to find if agent is licensed or has any disciplinary actions. Vet candidates on your local Better Business Bureau’s website to review complaints.

INTERVIEW THREE OR MORE AGENTS 

See some interview questions below.  If possible, go to their office and meet other staff members. Try and identify at least two good agents. If the first does not work out have a standby you can meet with.

TRUST YOUR GUT

Gut instincts are relying on past experiences.  Maybe this agent reminds you of a trusted Uncle or reminds you of Cousin Jeff (and you want to run!).  Trust your instincts. Go with an agent you trust and feel comfortable spending YOUR HARD EARNED MONEY and time.   

REVIEW ANY CONTRACT YOU SIGN 

Your contract will specify any fees.  As a buyer you should NOT pay fees.  It may specify a duration of the contract and how you both end the contract.  As a buyer if this agent has not found you good deals, you need to exercise your option to switch agents.  Keep your options open. I suggest no longer than a 90-day contract, with the right for both parties to exit if needed. 

Ask questions when uncertain.  Request any changes you need to feel comfortable. ALWAYS READ ANY CONTRACT BEFORE SIGNING. 

SAMPLE REAL ESTATE AGENT INTERVIEW QUESTIONS

How long have you been a real estate agent?

Are You Part-Time or Full-Time Agent? I prefer full time agents.

Can you describe the rental market in your area? Same for taxes and Area Stats?

What is your experience level in finding the type of rental property I am looking for: (Condo, Townhome, Single Family, Multiplex Apartment, etc.)

How do you evaluate a property’s Return on Investment?  Ask to see examples.  

How do you plan to find potential properties; your game-plan?

How many rental properties have you sold in the areas I identified?

What price ranges do you normally deal with?

What was the actual sales price versus listing price percentage for the properties your clients purchased?   

{This will help you on negotiating.  If you are looking in a strong rental property area you may be forced to pay closer to full price.  You need to know this upfront.}

How many buyers are you currently representing? 

Are you a buyer of investment properties. {Identifies potential conflict of interest.}

What’s the ratio between buyers and sellers you represent?

·Will I be working with you only or a team? 

What’s the best way to contact you?

Who do you have in your network that can assist me? 

{EXAMPLES: Attorneys specializing in real estate; Rental Property Management Firms; Mortgage Advisor; Handyman; House Cleaners; Painters; Roofing; Electrical; Plumbing; etc.}

This is your opportunity to get a sense of the real estate agent’s style as well as their experience. Ultimately, you’re looking for a Realtor who is familiar with a particular area and the types of properties you are interested in.

Request minimum of six Rental Properties Buyers as References.  Contact minimum of three references! 

QUESTIONS FOR THE REFERENCES: Verify the agents’ responses with reality. How accurate was the ROI estimate?  Was the agent accurate in her estimate of rent and all cost? Were there any unknown cost you discovered during the process or worse after the purchase? Do you recommend this agent and are you still using this agent?

CONCLUSION

Hire an agent that is experienced in what you want to buy.  If you are interested in multiplex units, find an agent that routinely deals in that market.  Find an agent that is experienced in rental properties.  She or he know what a good deal is and what is a waste of time. A seasoned real estate professional will save you time, errors and money! 

During the selection process, identify your back up agent in case you need to make a change. 

WEBSITES TO FIND TOP AGENTS

• https://www.mashvisor.com/real-estate-agent/
• HomeLight[AP1] 
• Find Top Realtors Near You | Based on 2020 Sales Data

PREVIOUS REAL ESTATE INVESTMENT BLOGS

IT’S ALL ABOUT THE LOCATION SILLY  https://wealthbuildingpowers.com/2020/09/08/its-all-about-the-location-silly/

BUYING THE BEST MONEY – MAKING INVESTMENT RENTAL PROPERTIES

STEP #3: BUYING THE BEST MONEY MAKING INVESTMENT RENTAL PROPERTIES

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ABOUT ME

I am a proud nerd (as my beautiful wife and daughter have told me) investment and finance blogger, with a NC State, Chemical Engineering, University Rutgers, MBA and Harvard University, Advanced Management education.

I left a corporate career because I had a desire for making a difference as a speaker and writer, to help others. I was blessed to be coached and mentored by strong women and men in both my family and professional life.  It is my time to serve and give back.

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DISCLAIMER

I started my first business at ~13 years of age (small but brilliantly created plant nursery). I am a successful investor in stocks, options, real estate and happy to share my personal finance and investment lessons learned with you.

However, I am NOT a licensed financial advisor.  Please do not construe my suggestions on this blog, as recommendations for your personal situation.  For individual finance advice please seek your own licensed CPA or fiduciary financialadvisors.  

I write this weekly blog to make an impact by reaching an audience and demonstrating the need for financial literacy. I will help you get there.