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This blog is about entrepreneurship (and succeeding online). I believe ethical and trained real estate investors are great examples of creative entrepreneurs and understanding their mindset will help us all learn to be savvy business-minded individuals.

Realtors Are Salespeople

Realtors are not created equal and if you’re planning to use one to find your next house, take a moment and consider the following.

When choosing a Realtor to assist you in finding a home, never lose site of the fact that a Realtor is a salesperson.

Salesmen or salesperson are terms that make buyers nervous and are terms sellers love.

So if you’re a buyer and your Realtor is a salesperson, what is your Realtor selling?

They’re selling a house, just you are not the seller, you’re the buyer. True your Realtor’s commission is paid for by the seller, but keep in mind the higher price you pay for that house, the more money your Realtor assisting you in finding a home will make.

On the surface this looks great from the buyer’s perspective - you don’t have to pay anything for the use of a Realtor’s services. However, because of the way Realtors are paid, buyers need to be cautious and always question if their Realtor is truly working to get them the best possible deal they can.

There are approximately 1.2 million Realtors in the United States. Now I’m no math major - oh wait, I am! - but the probability of all 1.2 million Realtors having the good ethical standards I believe I have is somewhere around 0, and being that it’s a commission-paid field . . .

Everyone in this world is different, thus every salesperson is going to be different. A smart home buyer (and entrepreneur) will never lose site of this and always be on guard. This is the harsh reality of business.

Also, even if you believe your Realtor is a good ethical person, remember they have a duty to the seller as well - especially if they are showing you a house they have listed!

What I’m trying to say here is that there’s only one thing you know for sure:

You are the only one you can fully trust.

As a buyer, just remember the more money you spend, the more money your Realtor will make.

Also, the sooner you buy a house and the fewer houses you see, the less time they have to spend researching properties for you, driving you around town (more time), paying for gas, and can move on to making more money.

Finding A Realtor To Work With

Where To Find A Realtor

There are many ways to find Realtors: through friends, family, co-workers, advertisements, websites of the more well known companies like Century 21 or lesser known sites like HomeGain and ZipRealty, newspapers, etc.

Word of mouth is probably the most favorable as others can provide you with personal experience and feedback.

Find A Full Time Realtor

Look for Realtors who are “Realtors” full time. Many Realtors have second and third jobs and only work as a Realtor part time.

You want the expert who’s networking every day and researching properties often. In general, if you hire a part time Realtor, you’ll get part time work, a Realtor who isn’t well connected, and you’ll have to work with their schedule when viewing houses.

Interview A Few

This step is more important for sellers than buyers; however, if you take the time to interview a few different Realtors, what you’ll find is there are ones you naturally bond with. Maybe it’s that you’re close in age or you have something in common. What ever it is, this helps promote good communication.

Also, be up front with them. If you plan to look at 10 houses before you buy, tell them - this way you can weed out a few Realtors who are just hoping to make a quick buck.

Oh, and if a Realtor ever asks you to give them a deposit for their services, tell them have a nice day

Be Prepared

When meeting with a Realtor, it’s good to already have a pre-approval letter for financing. This shows the Realtor that you’re a serious buyer and not just toying with the idea of buying. Also, be prepared to answer their questions. Know what you’re looking for and where.

Working With Your Realtor

As an investor, you always have to look out for #1.

If you wish to buy a house like an investor, you have to think like an investor. There are many tools used in the trade of real estate investing and one of them is a Realtor.

Here’s one of the biggest mistakes you could ever make when working with a Realtor - telling them what your highest offer will be on a property.

First, here are a few things you should tell your Realtor:

• the area you want to buy in
• general price range
• how many houses at a minimum you’d like to look at before placing an offer (this can be changed at any time)
• if you plan to submit offers on multiple properties
• the features you’re looking for in a house
• if buying a fixer is an option

Also, let them know if there are any special requests you have, such as seller financing or furnishings included.

Why You Shouldn’t Show Your Poker Hand To Your Realtor

Here’s why you should never tell your Realtor everything (again, remember not all Realtors work the same, but you have to protect yourself).

Realtors talk with one another in an effort to get a house sold.

When you submit an offer, you give the offer to your Realtor who in turn gives it to the seller’s Realtor (at which time they talk). The listing agent then gives their client the offer you submitted. Remember, the listing agent is the seller’s Realtor and is looking out for their client’s best interest. Their goal is to sell the house and get the most possible for it.

With that in mind, if you told your Realtor before you submitted a lower offer how much you’re willing to go up in price, it’s possible your Realtor will tell the listing agent (the seller’s Realtor) how much their client (you) are willing to go up.

And if you think the listing agent would keep this information from their client then think again.

Now the seller has the edge, not you. Don’t, I repeat, don’t give your Realtor your highest offer price, even if they ask.

We’ll talk more on offers in an upcoming post.

On a final note, don’t forget Realtors work off commission and commissions are negotiable.

It never hurts to ask your Realtor to contribute a percentage of their commission toward your buyer’s closing costs. With so much competition out there, your offer might just get accepted (mine did). ZipRealty offers 20% of their commission back to the buyer’s closing costs as a standard.

So there you go, a basic guide on how to find and work with a Realtor from an investor’s perspective. Just keep in mind every situation and person is different. These are just guides and nothing is set in stone.

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