The process of finding an investment property can be complicated for most people due to the extensive research and logistics involved. Inexperienced investors normally have a hard time finding value for the money they will pay when searching for properties. This is where a real estate agent comes in. The job of a real estate agent is to help their clients find a property which matches their preferences and available funds. Agents also have a very good understanding of local laws when it comes to buying and selling properties, which can help investors avoid legal complications after purchasing a property.
While the job of a real estate agent appears to be very simple from the viewpoint of the investor, there is common skepticism when it comes to hiring one. Investors are apprehensive to work with agents they do not trust and are uncertain about whether or not the real estate agent will act in their best interest. This is a possibility but it is highly unlikely because realtors and real estate agents are bound by a code of ethics that they must adhere to. They have to serve the best interests of their client on a financial as well as personal level.
As an investor, what should you expect from your realtor? Simple, your realtor shall represent you in a way to maximize your profit on your real estate investments and portfolio. However, this is conditional on the real estate’s background knowledge and experience in the industry. Good real estate agents acquire a vast understanding of the real estate market and know the best ways to make profit factoring in current market and housing conditions. Understanding the market entails; knowing which are the best neighborhoods to invest in, what qualifies a highly demanded property, and finding great deals reaping higher returns. To make profit on any investment, you must be able to take into account cap rates, rental incomes, expenses and mortgage funding. These are important indicators of what sets good real estate agents from the not-so-good-ones.
The process of hiring a real estate agent is not an easy task because you are paying someone to make decisions on your behalf regarding all your real estate investments. Nevertheless, there are many professional and highly experienced real estate agents that excel at what they do and can help you make lots of money in turn. Trusting a real estate agent to find you your dream house is a big deal that should not be taken lightly. Before you hire the right real estate agent, ask the following questions first and foremost. The answers to those questions will help you determine whether or not the real estate agent is the right fit to meet your goals and expectations.
Related: How to Find a Real Estate Agent for Investment Properties
Questions for Your Potential Real Estate Agent
Is real estate your full-time job?
Your first question when interviewing an agent is finding out if they are doing their job on a full-time basis or not. A full-time real estate agent is one who is dedicated and committed to the profession. If the agent is only working in real estate as a part-time job then it is enough reason to not hire him/her. There is so many risks that come when your most trusted advisor in real estate will be easily distracted by other commitments. You will need a real estate agent who will be available on a full-time basis to help you achieve your goals and walk you through the hurdles of real estate investing.
How long have you been involved in real estate?
This is a question that will provide the client with an overall view about the experience and knowledge of the real estate agent. The duration of his/her experience as a real estate agent would indicate success over the long-term or lack of experience if they are new to the market. Not all inexperienced real estate agents are without major real estate knowledge. The amount of time they have invested studying and understanding the real estate market is also an indication of their potential to serve the client competently.
When meeting with the real estate agent, the client should be able to make a conclusion about the capabilities of the agent by talking to them about their experiences. Ask them about experiences related to the investment you will be doing yourself to see if the agent has had any experience with a similar situation.
Related: Real Estate Investment Agent: Do You Need One and Why?
How many clients have you dealt with?
The idea is that you want a realtor that has had a considerable amount of experience when dealing with clients. But at the same time, you don’t want to hire a real estate agent who has a high number of current clients. It is better for your personal gain to have a realtor that can make time for you whenever you need him/her to be available.
Who is part of your real estate team?
Real estate agents make a lot of connections working in the real estate market. Lawyers, mortgage lenders and property managers to name a few are part of an agent’s network. Some real estate agencies will have these services within their company. It can be more beneficial for the investor financially to have these recommendations from the real estate agent. However, it is worth pointing out that if a real estate agent is too pushy in recommending someone then it is viewed as alarming. A real estate agent should be looking for your best interest, so these recommendations should be suggestive and not forced.
Related: Creating a Real Estate Investment Network: Who Do You Need?
What makes you different FROM other real estate agents?
This question should cover the competitiveness of the real estate agent compared to other people in the same profession. You will need to know the agent’s competitive advantage that sets him apart from the rest. A real estate agent can have a competitive advantage over others through his/her track record in conducting sales and purchases, the connections they have or the number of happy clients they have previously served. Knowing the capabilities of your agent is a must.
Is it possible to terminate the service if I’m unhappy?
It is very important to clear this up with your agent and have it in writing as well when signing a service contract. If the agent is not doing the job that was promised or if the services he/she have provided are lacking in terms of quality then terminating the contract should be an option. The termination should be in your favor because you are the one who has lost time and effort, which means that you should be getting a full refund on any down payment. Prepare for the worst case scenario when interviewing your agent to remain one step ahead when searching for an investment property.
Conclusion
The process of interviewing a real estate agent can be time consuming if you are not aware of what is needed from the agent. These questions should be enough to cover the basics of understanding if a particular real estate agent is the one who will fulfill your ambitions and goals or not. The interviewing and questioning process is not a favorite for most investors but it is necessary to ensure you hire the right real estate agent.