How can Investors Work with Realtors?
Many investors feel resentment toward Realtors. They feel that Realtors possess little knowledge and have a single focus – commissions. Why? Realtors aren’t trained in the unique selling techniques that investors use. They are trained in the “Retail Market” which is 90% of what is out there.
Simply put, it’s lack of training. Fortunately, there are patient investors who are willing to take the time to educate Realtors and in turn reap the benefits of the many tools a Realtor can provide to help maximize profit potential.
The following are just a few of the services a Realtor can provide. Most of this information is not available to anyone other than a licensed Realtor.
Suspect Database – Realtors have access to a powerful tool, the MLS. From this database a Realtor can provide a list of addresses for expired listings, withdrawn listings and listings that have high days on the market. This is a great base for finding motivated sellers and creating postcard campaigns.
Market Value – What a particular piece of real estate can sell for in today’s market. A Realtor can generate reports using comparable sales to determine a reasonable sales price.
Rental rate – What the property can be reasonably rented for in the target area. This helps determine what the maximum purchase price should be to yield the desired passive income.
Potential appreciation rate – Is the area increasing or decreasing in value? This will help determine whether a potential purchase would be better suited for a rental, flip or lease option.
Area trends – What is going on in the immediate area can sometimes turn a great looking deal into a disaster.
Motivated Sellers – Realtors are often the first contact for sellers who are behind in payments, need to sell quickly or don’t have equity in their home. These are exactly the deals investors are looking for. Once educated on the services investors provide, Realtors will gladly refer the business to an investor. Otherwise, they are walking away from a seller unable to provide any options.
To take advantage of this vital information, find a Realtor who understands investor strategies and the kinds of properties that work. One source are real estate investor clubs and local REIA’s. These organizations offer education and networking within the investment arena. Realtors at these organizations are typically investors themselves or simply have an interest in this unique market. If you find a Realtor there, they are interested in what investors do or may even be investors themselves. When that’s the case, they have a passion for the skill and hands on experience.
Now, set aside those old beliefs and add a skilled Realtor to your strategies. Together you can have a lucrative investment portfolio.
Many thanks to my good friend Pam Wilson for this article. Pam is a Realtor in Winston Salem who works extensively with investors.
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