“You are only as strong as your weakest link.”
This age-old saying applies to many things in all walks of life. Within real estate, this obviously applies to building your team.
Looking for a Real Estate Agent? Check out BigPockets Agent Match!
As David Green explains in his book long range real estate investment, To be a successful real estate investor, you need to have a rockstar “core four” on your team. That main four includes your:
- Representative
- lender
- Contractor
- property manager
If you choose your team correctly, You Will be the weakest link. Don’t fret, though—it’s a good thing!
Remember another cliché: “If you’re the smartest person in the room, you’re in the wrong room.”
In this case, you will be able to learn invaluable lessons from your team every day.
Choosing each of these main-four members could be a separate article in itself. However, in this post, I am specifically going to talk about choosing a great agent for your real estate investment business.
Connected: How to Build a Real Estate Investing “Team” With the Skills You Need
choosing an agent
There are 1.4 million real estate agents in the United States, making it one of the most saturated industries in our economy.
Why? The barriers to entry are very low. Take a class, pass an exam, and boom, you’ve got your license.
You now have the ability to represent buyers and sellers, earning 3 percent commission on each transaction. In some markets, this can translate into thousands of dollars per transaction, making it a very attractive option for many.
If you’re feeling the same way, remember that you’re not alone! There are 1.4 million other real estate agents who have already jumped on this bandwagon. The only problem is that 87 percent or 1.2 million of these agents are not very good and leave the real estate business after only one year.
It’s your job to find the 13 percent of agents who can be with you for the long haul. Then you need to make sure they understand your strategy.
what are going to do?
Do you want to hack house? Buy, Rehab, Rent, Refinance, Repeat (BRRRR)? Invest in traditional rentals? Or buy a house just for you and your family? Whichever strategy you choose, you need to go out there and find an agent who understands what you’re trying to do.
Like anything in real estate, finding your agent is part of a funnel approach. The first step in the funnel is to find a pool of three to five high-potential leads that you can reach out to and talk to about their business.
Connected: How will the role of real estate agents change in 20 years?
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Step 1: Select 3 to 5 agents to interview
The first step in selecting an agent is actually finding five to interview out of the thousands available. Thanks to BiggerPockets, it’s easier than it sounds.
It blows my mind when I meet someone in the real estate sector who hasn’t heard of Big Pockets. As an investor or aspiring investor, would you be more likely to work with an agent who is a contributing member of the BiggerPockets community or someone who has never heard of it?
If they are not on BiggerPockets, they may not be passionate about helping investors find properties. Try searching Google, Apple Podcasts, or Amazon for “real estate investing” and BiggerPocket will come out on top every time. If they’re not on BiggerPockets, it means they’ve learned very little on their own.
do you want this?
You have narrowed your search to BiggerPockets only. Now, there are a lot of people on BiggerPockets who sign up for an account and then never come back or contribute.
Who do you think is more knowledgeable? An agent with over 500 posts, a high vote-to-post ratio, and who has been active in the last few days? Or the agent with six posts, one vote, and who hasn’t been active for months?
I think its self-explanatory.
Luckily, if you go to BiggerPockets > Network > Agents, BigPockets easily displays this for you. So pick your top three to five, and schedule an interview.
It doesn’t stop there though! In addition to posts and votes, BiggerPocket also displays how many deals each agent has closed (or at least filled) on top of the references left by their clients. Just like you would a restaurant, take a look at the reviews and pick your top candidates.
Then, shoot them a message and ask them to chat on a phone call for 15 to 20 minutes.
Step 2: Conduct Interview
Once you’ve got them on the phone, it’s time to ask the all-important questions and really get to feel them out. Start by seeing if they can build a relationship with you—you’re going to be working with this person for at least the next few months and hopefully at least a few years. You want to like them.
do you like small talk? Or are you a straight talker? The agent being friendly will likely start with small talk.
If you’re not eating it and it shows in your voice, does the agent pick up on small talk? Or do they get down to business? Communication Reading and style is important here!
If you do engage in small talk, it should last two to three minutes at most. You’re trying to be cordial and fun, but there’s no need to swap life stories.
Next, it’s time to move to the meat of the conversation and ask questions. many of these questions come straight from my book House Hacking StrategySo if you’ve read the book and feel like questioning them over and over, that’s why!
- Are you a full or part time agent?You want to work with someone who is a full time agent. If the person has another W-2 job, you probably won’t be their priority.
- What percentage of your clients are investors versus home buyers?You want someone whose client base is made up of at least 50 percent investors. You want them to think like an investor and not a homebuyer so that they can help you get the highest return on your investment.
- Are you an investor yourself?If they don’t currently own rental properties, they won’t be able to expertly guide you through the transaction – even if they claim to know how. There really is nothing like doing it yourself. Try to find an agent who is currently or recently employed the exact same strategy as you.
- Have you ever househacked, brrrrr, or transacted on a traditional rental property (whatever your strategy)?If they haven’t, it’s on to the next question. If they have, great! Ask them about the number, type of property, location etc. If this all sounds legit and like a deal that you want, that would be great news!
- What do you look for when helping people find house hacks, brrrrr, or investment properties?Consider their answer carefully. Are they BS-ing you? Or are they sure? At this point, you’ve educated yourself and should know what to look for—the rest is up to you.
- What is your view of the market / which neighborhoods do you like?This is a softball question—everybody asks it, but it’s still good to understand. You’ll be talking to a lot of agents in the process, so you’ll want to see if there’s any overlap between answers. If so, you might want to look into those places. If there’s a neighborhood they mention that you’ve never heard of before, inquire further.
- Can you tell me about the time you negotiated on behalf of the buyer?Agents are paid a portion of the purchase price. Many buyer’s agents can’t see the forest for the trees when it comes to trying to get their buyers the lowest possible price. Ask about a time they heavily negotiated for a buyer where the purchase price was reduced.
If there are any other specific questions you want to ask, by all means ask. This is a big decision, and you want to be sure that you are choosing someone who will act in your best interests.
If you’re talking to three to five different agents, I’d recommend taking notes for each one so you don’t confuse conversations (this happens to me all the time). Review your notes and move on to the next step.
Connected: 7 Signs of a Bad Real Estate Agent
Step 3: Choose an Agent
After conducting your interviews, you should have an idea of which agent you want to choose, however difficult it may be. There will probably be two or three that you really like and are good in their own way.
So, what do you do? write it out!
Take a piece of paper and draw a line down the middle. Write the names of each agent on either side of the line, respectively. On the left side of the page, write your criteria and weighting factor for each category.
The weighting factor should be a percentage ranging from 0 percent to 100 percent. Give more weight to whichever attribute you value more, but make sure the sum of your weights equals 100 percent.
Your piece of paper should look something like this:
After all of your criteria are filled in, rate each of these on a scale of one to five in each category, with one being the worst and five being the best. Multiply their scores by the weight multiplier and add them all up. Who has the most points, who do you go with—it’s as simple as that.
After doing this in-depth analysis, in the above example, it would be clear that you should go with agent number 1. Call them or shoot them a text, and tell them you want to move on. Have them set you up with a search, and keep looking until you find the right property.
Now, let’s be real. With 1.4 million real estate agents in the country, a real estate agent is a commodity. Most of them show you properties, write contracts, and that’s it.
Your job is to filter through these agents and find someone who can serve as an advisor, mentor and friend to lead you through the entire process. Your agent should be someone who can connect you with the right people, analyze a deal and give you their honest opinion Yours Keeping the goals in mind.
Don’t make this decision lightly—find a good agent and your investing career will be much easier.
Happy Investing!
What do you look for in a real estate agent?
Let us know in the comments below!
Note by BiggerPockets: These are the views expressed by the author and do not necessarily represent the views of BigPockets.
