Wouldn’t it be great if we knew in advance that a deal was dodgy? In hindsight it might be all too clear that you were walking into trouble, but if you are new to a situation, or pumped with emotion about something exciting – like a property purchase! – you might be walking blindly into a ready-made disaster.
In just about every situation there are early warning signs and red flags to look out for, especially when it comes to property buying. The issue is, it takes time and experience to learn what these red flags are, a learning curve that can be expensive and stressful.
Like anything, a knowledgeable and experienced team at your side, you can easily navigate your way through a worthwhile and high-quality residential property investment.
Real estate agents are an integral part of your property team. Hiring the right one requires research and effort in order to get the best of the best by your side. We’re not just in terms of skill, but also in terms of service and how well they communicate with you.
It’s important that when you do spot red flags you take them seriously. It’s the only way to weed out unreliable offers and make sure you find a trustworthy real estate agent that will look after your hard-earned Aussie dollars.
Our years of experience helping Australians enter the U.S. property market allows you to build a reliable U.S. property investment team and secure the best properties available across the U.S., all for far less than buying property in Australia.
Why investors may feel uneasy about real estate in the U.S.
Foreign investment ventures always have that extra level of uncertainty around them. Even though residential real estate in the U.S. is a lucrative opportunity, many investors hesitate because of the extra gap the distance and time zones make.
For those who step outside their comfort zone and take the U.S. plunge, the rewards are fantastic and most of the common myths around U.S. investments are quickly realised to be just that: myths.
Here are some common investor fears that most Australian investors find to be unfounded when purchasing U.S. residential properties:
- Real estate is too risky – All investments come with certain risks, which is why you need to do your due diligence before committing to any investment – no matter where it is in the world. When it comes to real estate, it’s a well-trodden road with easy to follow steps. As long as you take the time to build a solid professional team on the ground to oversee your investment, it’s very possible to see fantastic returns.
- Real estate agents are shady – The unfortunate truth is that there are shady people in every business–not just real estate. You need to exercise caution whenever you’re going into a new business venture, whatever it may be. Doing your research and chatting with a number of real estate agents before you commit will help you create a shortlist of high-quality and trustworthy professionals to assist you.
- Real estate is a trap because you’re in for the long haul – There is an investment option for every investor. You might prefer the idea of a long-term investment, but equally possible are fast returns with property flips and fixes as well as a variety of lenders to match your needs too.
Your concerns for safety and certainty with your investment are valid, and it’s smart to tread carefully in new situations, to a degree. Remember that everyone starts somewhere. Residential real estate investment in the U.S. can feel new and foreign to you now, but if you’re open to it, broaden your perspective and think “abroader,” you will soon find your footing and trust your ground team to invest again, and again.
5 red flags that indicate a dodgy real estate agent
Inviting a real estate professional to join your property team requires preparation and time to get right. Once you find a real estate agent you can trust you can feel confident and continue to rely on their services for future investments as you build your international portfolio. Starting your initial real estate agent search you’ll need to be diligent and watch out for these five red flags.
1. They are difficult to contact
Not being able to reach your real estate agent can be frustrating, and it’s not just about common courtesy, it can damage your investment opportunities if it takes significantly longer to iron out details, especially as there’s a time difference to consider. It could even mean that you miss out on your dream property, simply because they didn’t bother to read your offer.
If your real estate agent is difficult to talk to or communicate with, it’s probably an indication of how they are going to respond in the future as well. Don’t wave it off thinking it’s not going to keep happening, no matter how impressed you are with their resume–listen to your gut and find someone new.
Consider the cost on you personally as well. Waiting for responses can be anxiety-inducing, especially if they make you call within their office hours, leaving you sitting at your computer or on hold at 2.00 am.
Red flags with consistently slow response times can indicate that the agent:
- Doesn’t specialise in your purchasing field
- Has no commitment to the market
- Doesn’t work in their position full-time
Take this as a sign that they are not in a position to fully address your purchase and not that they are simply busy right now. Expect this to be an ongoing and significant issue that needs to be avoided.
2. They seem unmotivated
When someone is clearly not passionate about their job, it can be hard to trust them with your investment. In these cases, you are more like a dollar sign to them than a customer they can deliver quality customer service to.
If you can see they are being half-hearted about their answers and assistance early on, you can expect them not to put their energy and effort into finding or securing the property you really want down the track.
A passionate real estate agent is one that will secure your property investment to the best of their ability.
3. There’s a lack of transparency
Working with someone who doesn’t tell you everything becomes suspicious. If they seem to be holding back on providing information about their processes, work history or credentials, this is a big red flag of what’s to come.
It’s fair for you to question what else they’re hiding, as well as their legitimacy. There should never be gaps in information, especially when it comes to a property you are looking to buy. If they are not upfront and honest, they’re not going to offer the reassurance you need for your property purchase.
4. They seem overly pushy
No one likes a bully, so if you see signs of your real estate agent being overly pushy, take a step back. Remember that they are not just interacting with you, they are also interacting with the property vendors and your future homebuyers. That pushy attitude will push everyone away and hurt your buying power.
You can also expect them to put pressure on you to “buy now” without assisting you with options or negotiations.
While being aggressive in real estate used to be a solid tactic, it’s now outdated and out of favour, so don’t stand for it, especially if it crosses the line to bullying.
Someone patient and charismatic will be equally charming with everyone they meet, helping to grease wheels, make deals and sign a contract that has everyone smiling.
5. They are unprofessional
In every transaction, you have to remain professional–especially when dealing with something as delicate and important as residential real estate investment.
There are a few ways where lack of professionalism shows:
- Passing the blame
- Giving excuses
- Failing to keep promises
- Getting upset, defensive or emotional over small details
- Poor communication and response times
It’s important to factor that real estate licensing is easy to come by in the U.S. A lot of people have it to access special reports and databases and don’t have any contacts or the ability to assist you with a property purchase. You need to be vigilant about who you hire even if they technically have the paperwork.
Any suspicious activity, i.e. they are working out of their home basement not a shopfront, needs to be considered as a serious red flag and an indication they might flake on you at any moment..
Being vigilant about who gets a spot on your team includes knowing who you should avoid at all costs. A little bit of research and time spent here ensures you have the best possible group of people representing you in terms of reaching your property and financial goals through your U.S. property investment.
Don’t settle for less than a real estate agent who is professional, prompt, passionate and transparent with their business processes, costs and communications.
Our online, self-paced course, Fix and Flip Academy goes into greater depth on this topic, giving you all the information you need to start investing safely and confidently in the U.S.
To learn more about investment opportunities and costs or working with a property team in the U.S. give Star Dynamic a call.