When it comes to the relationship between those investment property business owners and real estate professionals, it seems like there would be a great deal of harmony. After all, you’re interested in buying and selling, and so are they. But unfortunately, each group tends to be wary of the other, according to Brandon Turner, vice president of growth and communications at BiggerPockets, a real estate investing social network.
“Many agents don’t like to work with investors,” says Turner. “Especially if they’re new, investors tend to take up a lot of time, make lots of lowball offers, and many never end up purchasing a property.”
Changing this dynamic can be one of the keys to flipping success, since agents are rich sources of market trends, SEO listings, and neighborhood stats. Here are some tips for bridging the divide and making these relationships work for you:
1 – Be Prepared for Purchasing
To combat the perception that investors are simply browsing and not shopping, Turner suggests that you be completely ready to actually purchase a property before making any offer. This means that you have your financing in place and can commit to the deal.
2 – Set the Expectations
If you want properties that allow you to make low offers, let the agent know that ahead of time. That way, more effort can go into finding those types of properties, and an agent can choose whether that’s a good use of his or her time. Turner says, “If you’re looking for an agent to make 100 low offers each week, let the agent know that, because that might be something they want to do, and it might not. Setting expectations ahead of time will help.”
3 – Value What the Agent Offers
Investors tend to do whatever they can to limit their costs while agents are accustomed to selling with full service and getting full commissions, says Scott Parkin, a Minneapolis-based Realtor. “Bridging this gap is the perennial challenge.” Simply acknowledging the difference in those approaches and showing appreciation for what agents can bring helps to establish a relationship built on respect and mutual benefit, not on a financial tug of war. Parkin recommends trusting an agent’s advice on price, staging, and renovation details like finishing and fixtures.
4 – Talk About Your ROI
If an agent is an active part of your business, honesty about expenses and profit can help enhance that relationship. “Don’t hide your pro-forma from your agent,” says Parkin. “Use them as partners, since that helps them understand what your challenges are in purchasing and selling. Otherwise, they’re blind to your return on investment needs.”
5 – Get It in Writing
Like all other aspects of a project, a paper trail is useful for establishing what’s expected on both sides. Use contracts, and look carefully over standard real estate forms to make sure you know what they involve.
There are many agents who participate in flips, and it’s worth taking the time to find one who understands the nuances of the industry. But whether you’re working with someone new to flipping or with a seasoned pro, make the effort to develop a relationship that works for both of you.
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