17 Questions to Ask an Investor-Friendly Real Estate Agent
When looking for an investor-friendly real estate agent, you should ask different questions than if you were buying a primary residence.
Purchasing investment properties requires different factors, decisions, and calculations that regular real estate agents don’t use. A real estate license isn’t enough to qualify agents to help you with real estate investment purchases.
So before you hire an agent to work with you in your real estate investment business, you should know what to ask the agent before starting out.
1. Are You a Full-Time Agent?
Real estate investors need full-time agents with a 100% focus on real estate. While many agents work part-time and do well at it, real estate investors need top-performing agents who are 100% dedicated to real estate. They should constantly have their ears on the ground to find the best properties for your real estate portfolio.
The home buying process is intense, and if you work with an agent who doesn’t work full-time, you may not get the attention to detail you need. An agent who is distracted by other jobs or responsibilities may miss the crucial moment a property becomes available, thereby handing it over to the competition because they weren’t on the job at the time.
2. How Much Experience Do You Have?
Many buyers don’t ask about an agent’s experience level because they feel like they are prying, but working with experienced agents is the key to reaching your real estate goals.
Suppose you have the choice between a prospective agent who has only sold one investment property versus another prospective Realtor with years of experience buying and selling investment properties. In that case, you’ll likely go with the agent with more recently sold homes. Don’t be afraid to ask intimate questions about an agent’s experience.
3. How Many Clients Are You Working With?
Knowing how many buyers and sellers a real estate agent accepts at once is important. Compare the number of clients the agent takes on at a time to the level of service you expect.
A great agent can handle many clients simultaneously, but you must compare it to what you expect when house hunting or selling properties. If an agent has too many clients, it can affect the level of service you receive.
4. Are Your Clients Mostly Buyers or Sellers?
Real estate investors buy and sell properties. Depending on what you need to do, you’ll need different types of agents.
A buyer’s agent represents you when buying a home. They are the agents with their ears to the ground, waiting for the perfect property to hit the market.
These agents negotiate the deal for you and help you seal the deal. They are your eyes and ears out in the market.
A seller’s agent works for the seller, marketing the property based on the listing agreement. A home sells when a real estate agent sets the right selling price and markets the property appropriately.
Since you’re investing in real estate to make a profit, you want an agent who will get as much money as possible for the home and market it so that it sells fast.
5. Do You Invest Yourself?
Working with real estate agents who invest in real estate themselves brings a whole new level to the support they can provide.
Like anything in life, you learn more by doing, so working with someone who understands the ins and outs of owning investment real estate is a game changer. They’ll understand the buying and selling process and can help make investing in real estate easier for you.
Of course, you don’t want to hire an agent with the same real estate investing strategy as you, as that would create a conflict of interest.
Working with a real estate professional who understands the factors most important to you when investing in real estate is an important consideration.
6. What Sets You Apart From Other Agents?
We all know the real estate market is competitive, and there are many real estate agents out there, so asking an agent what sets them apart from the rest can help you decide which one is the best fit for you and your needs.
If an agent can’t come up with something that sets them apart from the others, what benefits do you have by choosing that agent?
Look for agents who take pride in their work and specialize in the areas you need, such as fix-and-flips or finding rental properties, so you get matched with the right person for you.
7. Do You Have a Team? If So, What Role Do You Play in the Process?
Working with a real estate team may be a good idea, but if you choose an agent who doles out all the responsibilities to the team and never has any hands-on experience with you, it might not be what you want.
Ask an agent specifically which tasks they delegate and which they handle themselves. For example, will the agent call you about new properties themselves, or will they give that task to an administrative assistant? Also, ask who will answer your questions and concerns when they arise.
This doesn’t mean team members aren’t up to the task, but when you hire an agent, that’s who you want to work with on the most important details of the process.
8. How Well Do You Know the Local Market?
If you’re investing in an area you aren’t familiar with, you need an agent who is familiar with the area. This is especially important if you’re buying a rental property. You must know about the quality of the schools, the proximity to highways and public transportation, and the accessibility of amenities like grocery stores, churches, and other basic needs.
9. What Is Your Purchase Price to List Price Ratio?
The purchase price to list price ratio compares the final sales price to the last listing price and tells you how often the agent can help their sellers get the highest selling price for their home. This may not reflect the original listing price if the price changes, but it will give you a good idea.
Numbers below 100% mean the agent often sells the house for less than the asking price, and any number above 100% means the agent sells the house for more than the asking price.
If you’re selling homes, you want an agent with a high sale-to-list-price ratio, and vice versa if you’re buying homes.
10. What Fees Must I Pay?
If you’re buying investment properties, you shouldn’t be on the hook for any fees regarding the real estate professional.
However, if you’re selling properties, you’re responsible for the agent’s commission, plus any other fees.
Both buyers and sellers are responsible for fees such as:
- Attorney fees
- Closing costs
- Credit reports
- Title insurance
Ask the agent what fees are included in the real estate transaction and which you’d be responsible for if you chose them as your agent.
Also ask the agent if their commission fees are negotiable, especially if they are higher than other agents’ fees.
11. How Many Clients Have You Helped Purchase Investment Properties?
A real estate agent can say they specialize in real estate investment properties, but that doesn’t mean they have experience in it. Ask real estate professionals how many investment properties they’ve successfully closed within the last 12 months.
Having experience as a buyer’s agent for one investment property doesn’t make the agent an expert in the real estate industry. You can also take it a step further and ask a Realtor how they get in touch with a listing agent.
Does the agent already have a large network of agents they work with, or do they cold-call agents and work their magic to win their clients the property?
12. Can You Provide References From Past Clients?
Nothing tells you more about an agent’s abilities than the words of past clients. Consider it a red flag if you ask a real estate agent for referrals and they don’t offer them.
A good agent should happily hand over referrals to get more business—unless they didn’t do a good job and are worried about what previous clients will say to you.
Of course, you can also read online reviews from satisfied clients (or unsatisfied clients), but hearing from people who have worked with this particular person can give you a better feel for what an agent offers.
13. Do You Find Properties Other Than Those Listed in the Multiple Listing Service?
A big part of success in real estate investing is finding properties at the right time. Waiting until properties hit the MLS can be too late, especially if you invest in fix-and-flip properties or look for short sales.
Finding an agent with resources outside the MLS can make all the difference in your transactions because it is such a competitive market.
If you find an agent who finds properties outside the MLS, ask what strategies they use and what types of homes they find.
For example, do they locate abandoned properties for fix-and-flips or target people about to enter foreclosure, helping their buyers purchase short-sale properties?
14. What Is Your Marketing Plan?
Working with a full-time agent isn’t enough; you need to find an agent with a solid marketing strategy.
Ask agents about how they market homes they sell and how they find homes for and target buyers. Ensure the strategy fits your investment needs and will help you find the right properties.
For example, it wouldn’t be a good fit if you’re selling a small starter townhouse and the agent specializes in luxury homes.
15. Can You Help Me Find Other Professionals?
Real estate investors need to work with other professionals, such as:
- General contractors
- Moving companies
Ask about an agent’s network to ensure they have the professionals on board to help you succeed in real estate transactions.
16. How Often Will I Hear From You?
Time is of the essence in real estate. When looking for real estate agents, have a definition of what a timely manner is in your mind, and see how it compares to what potential real estate agents offer.
For example, if an agent provides updates every few days but you prefer daily updates, you should change real estate agents to one who communicates more regularly.
17. Why Are You a Good Fit for Me?
Of course, the most important question you can ask any real estate agent is why they are a good fit for you.
Let them sell you the reasons they should be the person you pick for the important job of finding real estate properties.
If an agent can’t answer the question, that means they didn’t get to know you well enough or don’t take enough pride in their work.
You want someone who will proudly say why they stand apart from most agents and how they can help you with your home sale or purchase to achieve your real estate goals.
How to Find an Investor-Friendly Agent
Now that you know what to ask a real estate agent, the next question is, how do you find qualified agents?
A few ways are to join real estate investing groups, talk to property management companies, and network online. The more people you talk to, the easier it is to find the perfect professional for you.
Another great way to find an agent is through referrals. Working with someone who you know does a great job based on someone else’s input can provide peace of mind, knowing you’re working with a good professional.
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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.