Before I became a Realtor, my husband and I were approached by a real estate agent who invited us to get involved in an investment where we were promised a fantastic return. It felt too good to be true, but we trusted the Realtor. Long story short, the contractor was crooked, he left the country with our money and we got a half-finished home and no money to finish it. The bank loaned us $150,000 to finish the home and we sold it for a $150,000 loss.
We like to think of this not as a failure, but as a $150,000 investment in our financial education. One of the MANY lessons we learned was the importance of finding an ethical agent with experience working with investors.
Most experienced investors are looking for agents who understand investing and are investors themselves. A competent agent can help you avoid a $150k “lesson.”
1. Create Investing Criteria
Everyone who’s interested in investing, should take some time to ask themselves questions about what they really want and desire in an investment. Narrowing down what you’re looking for actually makes hunting for a property easier. Some questions to ask yourself:
2. Work with an Agent Who Understands Investing
The most important thing you need to look for when interviewing agents is to make sure you are working with an agent who is an investor! Just because they are a good residential Realtor does not mean they understand investing. Some questions to ask to ask your prospective agent:
3. Look For a Fiduciary Agent
In my market in Austin, TX, there are more than 14,000 agents and the average agent sells 1-2 homes/year! Would you hire a heart surgeon who only did surgery once every 6 months? And while real estate sales obviously aren’t life or death, for most people their investment is their largest asset and a wrong move could bankrupt you. Ask yourself these questions:
4. Find a Realtor who has a great “Team”
Most agents are solo agents, but that doesn’t mean they can’t have a great team around them. Look for agents who have a seamless network of vendors and partners. Ask your Realtor if they can connect you with:
Working with an experienced Realtor who has both your best interests at heart and experience investing themselves, can make investing safer, easier and more enjoyable. The key is to do some research before jumping in with both feet. You’ll need to do your diligence around what you’re looking for in an investment as well as what you’re looking for in a Realtor.
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