At some point the real estate flipper will arrive at a time to “flip” or sell the property and complete the project. There is something to be said about FSBO or “for sale by owner” and handling the process yourself but in order to complete a successful flip quickly and efficiently, a selling agent is a requirement. They will have a good understanding of the market, network with other agents and may already have interested buyers ready to schedule a showing. This is someone that fulfills a need on the team.
If you are planning to turn your first flip into a career, you may have multiple houses for sale at the same time in the future. A Real Estate agent can be an invaluable resource when you find yourself completing 1 project and starting work on another. Work with an agent on scheduling your flips and they may be able to line up buyers as you are completing flips. The agents are paid a commission on the number of houses sold so if you are flipping consistently you will keep them busy and paid.
An agent is also a good resource when looking for properties to flip as they can save time and money for any project. With their license they have access to the MLS and networking with other agents should provide plenty of options in your area. Active full-time agents will have a good understanding of their market.
I suggest interviewing multiple agents to find one who is great for the house flipper. Lets look at some tips on how to choose good agent to develop a relationship with.
1. Different Agents
Different types of real estate titles apply when dealing with property. I thought it would help to see that there are differences between the terminology used by people working in this field.
Real estate agent: This is someone with a real estate license
Realtor: This is a real estate agent who is a member of the NAR (National Association of Realtors). This person upholds the association’s high standards and their code of ethics.
Real estate broker: This requires additional education and they have passed a broker’s license exam. These people can also hire agents to work for them
Every real estate agent has a state license and this is public record. After choosing 3 or 4 agents to interview, be sure to validate that their license exists and that it is current. If they are a member of the local Realtor association, you can call and verify their membership.
2. Lawn Signs and Local Ads
This might be the most obvious suggestion but looking at lawn signs and writing down the name and phone numbers of agents in your area can be the first step. Local advertising tells you that they are and agent doing business in the market you are working in. The lawn signs should also show if they are affiliated with a larger real estate company.
3. Check Online
The first and most convenient method to find an agent is to search online. The online profiles have details about the agents how many sales they have, the area or market they work in and more. If you know the agents name, a simple google search for “[realtor name] real estate” can reveal their home page and details about their sales as well as reviews google has found. Be sue to check the market they are working in since many agents have the same or similar name.
Some simple searching found the following sites that also include agent search tools. They consolidate the agents current sales and previous sales as well as the general market they work in. Use these resources to find the name’s as well as so much more details on each agent.
realtor.com
zillow.com
homelight.com
We are looking for the best full time agent that should have around 12 sales or more per year. Check on their previous sales and look at similar properties with the house we are looking to sell. With the integrated maps on these sites, or just using google maps, you can find the past sales and look for houses in our neighborhood too.
We are also looking for an agent that is investor friendly, busy, keeps up with market conditions and any changes in laws within their market. Each site has a profile page for the agent but not all sites have all agents. I found one agent at Zillow.com but not on Realtor.com, as well as some agents on both sites but with different reviews. I like reading the reviews but be sure not to be too affected by negative reviews. of course, too many negative reviews is a red flag.
4. How Much Experience?
When we think about experience we usually think about a number of years of experience. With real estate the years are not as relevant as the number of sales per year in this profession. The agent could sell 1 house a year and have very little experience after 10 years being an agent. Another agent is selling 12+ houses per year which means they are much more experienced.
As a career flipper we want the best most experience agent we can find in our market as we plan to feed this and other agents plenty of deals. If they are less experienced we might be looking at delays or serious errors or issues that can only be identified by an experience agent in this market.
The real estate process can involve some complicated or difficult negotiations as well as counting on them to deliver good or bad information without hesitation. Choose an agent that is well spoken and experienced with negotiating deals
According to my research the average agent has a median experience of about eight years. The number I am sticking with is an agent that has 12 or more sales per year. This tells me they have been able to sell through most of the year and that means holiday seasons, good time and bad times.
5. Network With Family and Friends
The friends and family network is the first choice for most home buyers. These are people you can trust and therefore someone they recommend will be just as trusting. Most recommendations do not suggest using friends or family because one persons experience is not good enough to decide on the right agent. I added it here because I think this is still a good one to explore if not start with.
If you were to follow the same vetting and questioning, you will most likely eliminate the bad agents anyway. When speaking with friends and family try per-qualifying their suggestions by looking up the agent online. Going this route I would ask family questions like:
- What neighborhoods do they work in, where was the house?
- Were they representing you as a buyer or seller?
- How many homes have they worked with you on buying or selling?
- How long did it take for the agent to find a buyer/seller?
- Did the agent communicate well,.. daily, weekly?
The best recommendations will be from friends and relatives that have more recently purchased a house or are in the business of real estate, such as another flipper. As stated before we want the best choice for the area we are working in, so the agent should be a busy one.
6. Ability to Negotiate
In the real estate business sellers are looking for the highest price and the buyer wants a good deal. The house flipper is no different because we try to get the lowest price to make room for a profit later. A good real estate agent will be able to negotiate well and be experienced enough to explain why.
A good agent will understand that they are selling a flipped house but to the buyer it is the largest purchase they may ever make and frankly its a lot of money to haggle over. They should be able to recognize a buyer who is truly interested or another that is just low balling. The ability to respond to the low ball offer is also an important skill.
It’s not easy to quiz someone on the negotiating skills but we can ask some questions on the items involved with a sale, create a scenario and see how they respond. The real estate process includes multiple steps:
- Negotiate Price and handling the low baller’s
- Closing Dates
- Financial contingencies (did they get the loan)
- Inspection and appraisal contingencies
- Repairs
- Home Warranty
- Furniture and appliances
These are all part of the process and they can also be part of the negotiation and the price. For example the buyer may be stubborn on a $5000 difference in price, how would the agent handle this?
Would they offer to leave certain appliances?
Or offer a home warranty on the furnace or eater heater?
Walking through a few scenarios will provide a better view of how well they understand negotiation and how to finalize a deal.
7. Local Agent
One of the most important aspects of a good top agent is that they understand the market you are trying to sell in. This is important in many different ways and can reveal how the agent will market the property in that zip-code. Having that local knowledge will expedite the process of finding a buyer or get the house in front of preferred buyers currently in the market.
Local marketing may involve advertising in local publications or signage depending on the area. There is also marketing flyers and pamphlets to be distributed locally.
We also published an article on creative ways to sell a house fast.
One of the more common suggestions I found was to visit some showings in the local area and chat with the agents. The idea is you can qualify them on the spot and they are more than likely local since the house is in the area. This is more time consuming of a process but if you perform the online research first and work down to 3 or 4 agents, then speak with them at an open house. The face to face communication might be whats needed to choose the best real estate agent.
8. Market Pricing
The market price is the best price we are expecting to get when the house is sold and after more recent sales have been compared. Going along with the local agent knowledge and their access to the MLS, the agent should be able to provide a solid understanding of the pricing in their neighborhood. As a flipper we are talking with the agent before deciding on a sell price and this is happening before the buy.
We use the comparable houses in the area to get the most accurate price possible before buying. The agent can help with this process and decide how accurate it is or if it should be modified due to the market. When it is time to sell the agent should have the experience in this market to modify the price for the best price as quickly as possible.
The ideal agent will be someone who can work with a house flipper from the buy to the selling stages. As a partner the agent would work directly with the flipper as part of the project and share in the profits. As a contact its very important that their communication and customer service skills are high.
The market price is the best price we are expecting to get when the house is sold and after more recent sales have been compared. Going along with the local agent knowledge and their access to the MLS, the agent should be able to provide a solid understanding of the pricing in their neighborhood. As a flipper we are talking with the agent before deciding on a sell price and this is happening before the buy.
We use the comparable houses in the area to get the most accurate price possible before buying a fix and flip. The agent can help with this process and decide how accurate it is or if it should be modified due to the market fluctuations. When it is time to sell the agent should have the experience in this market to modify the price for the best price as quickly as possible.
The ideal agent will be someone who can work with a house flipper from the buy to the selling stages. As a partner the agent would work directly with the flipper as part of the project and share in the profits. As a team member or contact its very important that their communication and customer service skills are high.
Most service oriented businesses will promote the idea that they have great and responsive customer service. This is because the customer, especially when calling about a problem, wants to be heard and understand that the issue is being addressed quickly. There is no difference between this and what we need as an agent. Communication and periodic updates is how we can plan and move forward with the next project while the agent is selling the completed one.
9. Communication & Customer Service
In today’s world we have many forms of communication, calls, texts, skype and other chat apps you can install on you phone. On video calls we can share our computer screen to display documents or images to the callers. Waiting a week to hear from our agent should almost never happen. Since we are flipping houses for a living the agent needs to be capable of communicating more often and efficiently to help support the project.
10. Avoid Questionable Agents
In our quest to find the perfect real estate agent we will most likely run into some that are “not so much”. I decided to look around for things to watch out for or red flags that can identify an agent we do not want to risk thousands of dollars on. Remember this list is just a suggestion because personalities are different and you might clash with someone who connects with others.
As with most things in business keeping a cool head and a calm mind leads to success and profit.
Here are some great suggestions that identify the real estate agent you do not want to do business with:
- Part time agents; we need full time
- Friend of a friends relative is an agent
- We can vet them but unless they are a partner, avoid
- Doesn’t answer phone calls or meet at a scheduled time
- An agent that clearly does not know the market or neighborhood
- Too pushy, talks over you and argumentative
- Agent charges a very low commission
- There may be a reason why
- Agent doesn’t usually deal with your type of property
- Poor negotiator or fails to keep up with your project details