Dean Graziosi Real Estate Blog

When your real estate investment business is ready to add a short sale real estate agent to your team, you should be clear as to your expectations.  The main reasons agents are used:

·                     Fill the need for an excellent negotiator who will have credibility with the sellers and lenders.

·                     Give your investment business access to the Multiple Listing Service (mls).  Of course, you will always be on the lookout for properties before they are listed but the mls has great value when it comes time to sell your properties.

·                     Help find tenants for concluded transactions that you will be holding for a period of time.

·                     Assist with any listing, selling or closing details.

·                     Assist with showings of your properties.

Another benefit on a short sale real estate agent is that they work on commission.  If they fail to negotiate well or fail to rent properties or sell them, they are not an expense. 

Some investors feel that the commission arrangement is their greatest weakness because they are not your employees.  Real estate agents are independent contractors.  If they think you are wasting their time, they will be on to the next opportunity.

If you opt to use an agent, you must clearly define the agent’s role and then assess their qualifications. A few of the questions you may want to ask are:

·                     Is the agent in a position to find short sales before they hit the mls?

·                     What short sale experiences does the agent possess?

·                     Has the agent taken the National Association of Realtors Short Sale course?

·                     Has the agent ever worked directly with one of more lien holders?

·                     Is the agent experienced at creating BPO’s?

·                     How many short sales has the agent actually closed?  Ask them to explain the workings of a typical short sale.

·                     How many short sale purchasers have they assisted?

·                     Do they own any short sale properties themselves?

·                     Is the agent comfortable helping locate tenants for your properties?

Answers to these questions will give you a clear picture of what you can expect.  Move slowly through the agent selection process.  Selecting an agent who is too busy or who does not have enough time for your business will set your mission back.  Only hire the agent that fills al your needs.  The chances are good that this agent will not be a personal friend. 

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The short sale investor needs to be more exacting and more committed than an individual who is acquiring a residence.  If you have had good luck buying low and selling high on your past residences, that has little bearing on your success as a short sale investor.  In other words, throw the amateur playbook aside and get serious about making money through your real estate investment.

Of course, you will need all the tools used by any business.  That means a business plan, a budget, a marketing plan and the right team.  If you are going to be investing in multiple properties, the more urgent these needs are.  If you intend to start slow and work your way into the business, then set your overall business plan accordingly.  You may want to do some projections for two, three, four or five years out so that you understand all the nuances of growing your investment business.

In any case, one of the first decisions you will need to make involves the use of a real estate agent.  If you get out and about at all, you know someone in the real estate business. That should have no bearing on your decision.

There are good short sale real estate agents and there are less than good short sale agents.  If you determine to add an agent to your team, the agent must be experienced, willing to wear more than one hat and someone you can communicate with comfortably.

Not all agents have taken advantage of the real estate short sale courses.  That should be a requirement for your team agent.  You should also ask for a list of short sale transactions the agent has successfully and unsuccessfully negotiated.

You need a strong negotiator and if the agent is not up to the task, you must sharpen your own negotiating skills.  The agent will serve other purposes, but ideally your long-term investment success depends on the ability of your agent to pull the pieces together.   

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