You may be raring to go when it comes to investing in U.S. residential real estate, but just as you need to be discerning about which property you want to invest in, you also need to be selective about choosing a real estate agent you can trust.
The reality is not every real estate agent is going to be the one for you. You need to have criteria in place to determine your non-negotiables when selecting who you want to work with. Beyond just avoiding incompatibility, you need to make sure that your real estate agent is someone trustworthy, can actively pursue the properties you want and has your best interests in mind.
A legitimate, reliable real estate agent is a necessity if you want to make foreign real estate investment a lucrative way to earn passive income.
What does it mean to be a “legitimate” real estate agent?
The first thing you need to do when looking for a real estate agent for your investment property is a legitimate license. Real estate agents are defined as licensed professionals who connect buyers and sellers with each other for property sales transactions. You need to double-check the validity of their licenses first before getting into business with them.
If you deal with an unlicensed real estate agent, you run the risk of precarious deals without any kind of protection. And, even if the rates seem low for unlicensed real estate agents, you might end up paying more in the long run because they aren’t meeting your standards and you have to spend more trying to make up for their less-than-stellar service.
One crucial thing you need to remember is that every U.S property goes through the Multiple Listing Service (MLS), a reservoir of every on-market property that only legitimate real estate agents can access. Those who don’t have valid licenses can’t look at this database, so it’s best to only deal with agents who can legally review property listings.
But having access to the MLS database is not foolproof. Some people get their licenses just to access the MLS database but still don’t operate legitimately. Just because they have the papers doesn’t mean they have the means or intentions to help you.
Finding a real estate agent you can trust is crucial to your investment success, which is why you need to find someone professional with integrity and as invested in your real estate goals as you are.
8 things you need to look for in a real estate agent
Here are eight ways to identify a good real estate agent that puts you first, not themselves.
1. A license
Like we’ve mentioned, a license is the first thing you need to see to make sure a real estate agent has one. If a real estate agent tries to market themselves as legitimate but refuses to show their license, run for the (Hollywood) hills!
Secure a photo (or photocopy) of their license and double-check its validity. Luckily, some states allow you to verify licenses and real estate agent identities online, so make sure you do your research on that depending on where you are.
2. Past experience, customers and social proof
Double-check your prospective real estate agent’s social proof and testimonials beyond their own profiles or website as those could be manufactured.
It’s not uncommon for some companies to make up imaginary buyers to pressure others into buying in as well.
Pro tip: Search engines are a great resource to use to find out about agents, as online reviews on credible websites like Google can’t be manufactured or manipulated.
3. Active listening and problem-solving skills
Listening actively is different from just waiting your turn to respond and weigh in–and that’s an important quality in a real estate agent. Instead of just staying quiet to let you air out your concerns, they should be taking them in, being thoughtful and trying to address them as actively as possible.
Real estate agents have to think logically and tackle your issues, problems or concerns about a property analytically. Real estate is no walk in the park, so they need to be able to find solutions for you, especially if they’re on the more experienced side.
4. Familiarity with the area you want to invest in
The best real estate agent for you must be familiar with the local area, prices of similar properties around that area and what’s nearby that contributes to the price of your property (like parks, shopping centers and schools etc.).
A real estate agent that’s knowledgeable about the area is more trustworthy because you know they either did their research or are already intimately familiar with what’s around, making it easier to take their word on prices and standard of living in the area.
5. Understanding of real estate law
Intimate understanding of real estate law, taxes and property investment should be a requirement so that they can point out any legal issues that may come with properties you’re attracted to. Having this understanding helps them better weed out which properties are worth your time and effort.
A good real estate agent knows how to operate within the boundaries of the law, especially in the U.S, which may not always be the same as Australian and New Zealand laws.
6. Negotiation skills
A big part of real estate is negotiation. Your agent should be able to talk to other buyers and property owners and be charismatic enough to negotiate a price that works for both parties and is fair to you.
Being able to negotiate shows that they’re aware of appropriate pricing and that they’re willing to deal with a property owner on your behalf.
A real estate agent should operate with integrity–as all professionals should–but real estate agents deal with something as crucial as property investments that contribute to diversifying your portfolio and providing you with passive income.
You’re spending a lot of money, time and energy on your property ventures, so a real estate agent should have your best interests at heart. All their actions and decisions should be executed in good faith.
Having a genuine connection with an agent is important. While it’s a business relationship, you should still trust your gut and need to know that you should feel completely at ease with how you interact with them. If you feel they do want what’s best for you and you don’t have any anxiety around your relationship, it may be a sign they’re the real estate agent for you.
Jump on a call with them to feel them out with questions on how they operate, what motivates them and what they’re like.
Finding a good agent is important because real estate agents are an irreplaceable part of your team. Property is a great long-term investment, and anything worth doing in the long run is worth doing right with the best possible team you can put together.
We go in-depth on this topic in our Fix and Flip Academy which is an online, self-paced course that will give you all the information you need to start investing in the U.S.
If you want to learn more about what you need to look for in a real estate agent, give us a call.