Finding the Right Real Estate Agent for Investing

Building Your Real Estate Investing Team

“Where no counsel is, the people fall; but in the multitude of counselors there is safety.”
                        -- Proverbs, 11:14

“The important thing to recognize is that it takes a team, and the team ought to get credit for the wins and the losses. Successes have many fathers, failures have none.”
                       -- Philip Caldwell

The most successful people always have a great team helping them.  You’ll need to find a Mortgage Broker, Real Estate Agent, Inspector, Appraiser, Insurance Broker, Contractor and CPA.  You may also need the support of an Attorney and a Property Manager.  Today my focus is on finding the right real estate agent.

To begin, the two most important members of your team will be your mortgage broker and your real estate agent.  Outstanding residential mortgage brokers and real estate agents rarely achieve even modest success with investors.  Insist on full-time professionals that specialize in working with investors so you can maximize your track record of success.

Interview and Check References when searching for a real estate agent

Bear in mind that the perfect agent with A+ answers on every question likely does not exist, and if they do, they will be so busy that they might not have time for more clients. Be willing to compromise. It’s rare that you can find the 100% perfect agent.  The search and thought process for investments should be highly numbers-driven - residential agents are mainly focused on the emotional appeal of a home and how well it fits their client's lifestyle.

Here are some sample questions:
  - Are you a Full Time Real Estate Agent or do you do other things? If so, what else do you do?
  - How many transactions did you complete in the last twelve months?
  - Tell me about the mix of clients – what types of clients did you work with and what sorts of deals did you do?
  - Do you work on a team? If you are sick or on vacation, who will be helping me?
  - What happens if I’m not satisfied? Can I get out of the contract? How long is the contract?
  - Describe the investment you are considering. What properties do you suggest I consider? What have you seen other investors like me do? What specific returns did they achieve?
  - How would we work together? What is your “Process”?
  - Could I get some references of two or three investors you have recently assisted?
Call them up and ask them …
     • How comfortable they were working with the agent?
     • How knowledgeable did seem?
     • How responsive they were in answering questions and returning phone calls?
     • What did not work for you in the relationship?

I encourage you to interview a few real estate agents before making a final decision to sign a buyer’s agency contract.  Make sure you have a clause to cancel if you are not satisfied.  Commit to working with one agent after your due diligence period so they will bring you the best deals.  Non-committal buyers only see left-over deals after preferred clients have picked over them.

If you are thinking about investing in real estate I recommend “The 2011 Guide To Colorado Real Estate Investing” by Lon Welsh. For your FREE copy give me a call (303-726-1051).

Real Estate Code of Ethics

Colorado is unique in so many ways - from the natural beauty of the Rocky Mountains to our beer brewing Mayor, John Hickenlooper. One of the most powerful differences is the way we do real estate. Yesterday I had the opportunity to take the National Association of Realtors® Ethics class. Here are a few of the things I learned:
- Our real estate Commission was voted #1 in the country for 9 years running.
- The NAR Code of Ethics & Standards of Practice contains 17 Articles outlining a code of conduct and establishes obligations that maybe higher than those mandated by law. These guidelines are geared to protect the consumer.
- Colorado is 1 of only 23 states in the nation with true Buyer Agency Relationship agreements. When I bought my first home in 1987 I was more than a little surprised to discover that even though I had a Buyer’s Agent, my agent in reality worked for the Seller as a sub-agent.
- Of the 41,000 real estate agents in Colorado only 24,000 subscribe to the NAR Code of Ethics. So the next time you buy, sell or invest in real estate make sure your agent has taken the Realtor® pledge.

I PLEDGE MYSELF
To protect the individual right of real estate ownership and to widen the opportunity to enjoy it;
To be honorable and honest in all dealings;
To seek better to represent my clients by building my knowledge and competence;
To act fairly towards all in the spirit of the 
Golden Rule;
To serve well my community, and through it my country;
To observe the REALTORS® Code of Ethics and conform my conduct to its lofty goals.

Great class Wally. Thanks for being a brilliant teacher!