Thursday, July 25, 2013

5 Reasons Real Estate Agents Don't Like Investors

5 Reasons Real Estate Agents Don't Like Investors

If you ever talk to savvy investors you will undoubtedly here one of them say something to the effect of, "Yes I have several agents I work with to make offers for me".  This article points out why investors have an exceptional ability to get under the skin of professional real estate agents.

  1. Low loyalty - Good real estate investors do the the same thing that investors in other areas of the financial sector do: they go where the deals are.  Investors are inherently going to gravitate towards where the opportunities to make money are (duh?)!  Most real estate agents will prefer to have a buyers representation agreement with their buyers the same way listing agents will not likely list your property without an exclusive right to sell agreement.  Real estate agents want to ensure that they're getting paid for their work!  The last thing they want to do is spend copious amounts of time working with you for you to purchase something from another agent.
  2. Low prices - Real estate agents get paid on commission; a percentage of the final sales price of the property.  Investors are typically not trying to purchase the expensive $400,000 brand new house on the hill, they're shooting to get the lowest possible price on the lowest priced houses on the market.  Low pay equates to low incentive to work hard for an individual.  The only positive aspect of working for an investor is that they are likely to be repeat buyers and they will have to sell their property after it's been repaired.  
  3. More work than average - When Jack and Jane are trying to purchase their dream home it's likely the agent will have to spend a good deal of time determining what the buyers are looking for and will specifically target houses for them to look at.  When they find something they like, they make an offer, and the agent gets paid.  With an investor, the client is simply looking to get a deal on a house they can make money on.  In reality, and I often say this, every house is a buy at the right price.  So can an agent be reasonably expected to slave over every house for sale in a particular area to figure out which house is a deal, which isn't, what has potential, what already as a contract working on it THEN coordinating with the buyer to visit the property, estimate the repair costs, account for it, then make an offer.
  4. Specialization - Most real estate agents look at a broad range of transactions involving many different sub specialties of the business.  I like to compare this to doctors.  I broke my tibia and fibula about five weeks ago which gave me a need for a very specific kind of medical service.  Instead of having the ambulance swing by my general practitioner's office I went ahead and had them drop me off at the ER for an orthopedic surgeon to get to work.  The orthopedic surgeon has experience and a skill set specialized to my needs at that time that my general practitioner simply doesn't have.  The same can be said for looking for investment real estate.  Your general real estate agent can tell you what to look for but doesn't spend their day looking for it the same way my general practitioner knows my leg is broken and might even (probably not though, sorry doc) know how to fix it but doesn't do it on a daily basis.  A point of interest - Likewise, when I have a cough, I'm not going to go see my orthopedic surgeon, I'm going to my GP.  This is similar to listing your finished product!
  5. Time frames - No one likes to be pestered, not even me.  If a house comes on the market that an individual has the opportunity to make $50-60k on, the free market is not going to wait for you to make your mind up.  Every deal is extremely time sensitive; you snooze, you lose.  So when a deal comes out on the market you need to hope that your real estate agent is 
    1. Sitting in his office
    2. Constantly running CMA's to figure out if somethings a deal
    3. Remembers to call you
    4. Get's with you to go look at the property
    5. Can come to a number that you'd be happy with purchasing for
    6. Draft up an offer
    7. Get that offer accepted before anyone else 


  1. It is important that we should be getting information even if we don't succeed in our strategy. We should contain new skills that will help us understand different risk on our business. If we are willing to get help for our Property Investment Portfolio, feel free to find somebody who is capable in our business.

  2. Official website for Baker toronto real estate Incorporated, a Toronto-based realty company specializing in residential and commercial properties for local.Toronto Ontario Homes for sale, toronto ontario condos for sale, toronto ontario real estate condominiums for sale, toronto ontario home evaluations, toronto ontario realtors,