Why Investors need Realtors and Vice Versa
It often appears that real estate investors and Realtors are at odds with each other when it comes to the value and quality of services that are provided in real estate transactions. Can each of these groups conduct their businesses without the other? Sure, but can they be more successful working together? We think they can!
BiggerPockets is as diverse a group as we have ever seen that is tied together by a single element, Real Estate. We have been members for over a year now and have seen a lot of very strong opinions out there when it comes to what type of real estate investment is the best, how to structure deals, how to finance your investment and the list goes on and on! We think the biggest issues and the “liveliest” discussions are about the investor / real estate agent relationship. There seems to be a lot of mistrust, lack of respect and lack of understanding that is expressed in the forum discussions involving Realtors and investors. Investors often think that Realtors (I will use this term since it is easier to use and a large share of real estate agents are also Realtors) are not worth the expense, do not have the skills and work ethic to be of much benefit and do not understand. Many Realtors do not like investors making (what the Realtor considers) low ball offers, feel that that investors take undo advantage of buyers / sellers / lenders, etc. and that as experts in real estate sales, it is in the investors best interest to be buying and selling through them.
As real estate investors as well as a real estate broker and for about 30 years now, we can see and relate to BP members on both sides of the fence. We would like to share a few of our thoughts on the subject.
How Investors Should Best Utilize Realtors
Investors: communicate not only your needs, but also (briefly) why you have the requirements, or why your offer is $ XX. Check out several Realtors or get recommendations from other investors. There are great Realtors out there that will make you money. We work with Realtors nationwide in listing short sale properties. Many are good, a few will not be working with us again and some of them are exceptional and save us lots of time and really improve our bottom line. When we market to Realtors, we talk about letting them do what they do best — list, market and sell real estate, and let us work with the lenders and negotiate our short sale deals.
Well guess what?
That same logic works the other way! Investors, spend your time and resources doing what you do best…….finding, analyzing, rehabbing, etc. your deals and let a good Realtor market and sell them.
A Little Insight about Investors for the Realtors
Realtors, not all investors are the devil! Sure, there are lots of “investors” that take an on-line course from some guru or read a couple of books and give the true investor a bad name. Investors are repeat buyers and sellers. They look at real estate as an investment and leave out the emotion that causes many retail buyers and sellers to drive you nuts. When talking to a new Realtor about negotiating short sales, we often hear the lecture about fiduciary responsibility and the Realtor’s Code of Ethics, implying that as investors we are not ethical and do not care about what is good for the seller. From our point of view, even as Realtors, we don’t need a code of ethics to conduct our business in an ethical way! And sure, we are investing to make a profit, but still, avoiding a foreclosure for the seller comes before profit. Yep….…we’ve done them for nothing if all other exit strategies fail! Too many Realtors hide behind the Code of Ethics. Just like a church…………..NAR has its share of sinners!
We’ve said it before and we’ll say it again. In any group of people — Realtors, investors, attorneys, etc., you will find competent, ethical, hard working (these three equate to “successful”) professionals that are well worth their fees. There are also the ones that everyone complains about. They don’t know what they are doing, a bit on the “shady” side and spend more time telling others how good they are or what they claim to have done rather than actually producing results. Keep an open mind and work with the good ones. It will save you time and money and as an added benefit, you may learn something new!