How an Investor-Friendly Real Estate Agent Can Give You an Edge
A real estate agent, who can also be a REALTOR® if he/she is a member of the National Association of REALTORS®, is a core component of your investing team of advisors. Real estate agents have it harder than ever these days. There’s a common misconception that real estate agents are “becoming obsolete” due to technology and the ease of finding properties online. The truth is, good real estate agents adapt to the advancement of technology and embrace this wave of change rather than resist it.
Most real estate investors don’t feel like they need a real estate agent because they are not “typical homebuyers.” They don’t care about the feng shui of the rooms, the color of paint on the walls, or if Aunt Maude can take residence in the spare bedroom. There’s little to no emotion involved with investment properties and the strategy is very different. If you are a real estate investor, you will want to check out this interview above since you may never think about a real estate agent in the same way again. Finding an investor-friendly real estate agent can help you save a ton of time and give you a partner during your meticulous property search! Speaking of which…
Meet Tracy Whitford
If you are looking for an investor-friendly real estate agent, someone like Tracy Whitford is who you need to be calling. Tracy, who has invested and flipped her own properties, is a real estate agent and REALTOR® in the Cedar Rapids, Iowa area. She has had rentals of her own and has done fix and flips with her husband. Having a real estate agent who can resonate with the mind of an investor can take a lot of the work off of your own plate and add a valuable advisor to your team.
“Working with investors requires understanding that you will be writing a lot of offers. They will be low offers. Understanding the market is just a small part of it. Showing homes is a very small part of what we do. In addition to showing homes, searching for the homes, watching for them to come on the market, understanding that you need to move quickly if they’re a good investment.” – Tracy Whitford
I’ve Bought My Own Home Before: Do I Really Need a Real Estate Agent / REALTOR®?
Tracy warned investors and home buyers to be careful when trying to go out there alone, or unrepresented. Who needs a real estate agent or REALTOR®? “Naturally, I would say everyone,” she quipped, but provided solid evidence to back it up. “As a REALTOR®, showing homes is just a small part of what we do. We know the market, we study it, we see it every day. This is what we do as our career…we’re professionals. We have an entire team that works with us.”
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An investor-friendly real estate agent may even find properties for investors before they even come on the market. That this something an unrepresented buyer or seller does not have typically have access to. “In addition, we have an entire team,” said Tracy. “There are 700 realtors in the state of Iowa and we’re all working together for the same thing. The goal is to continue to have real estate grow and flourish and we work together to achieve that goal. In my opinion, using a REALTOR® is highly important.”
“I think you need to be prepared for the fact that there’s a lot of bumps in the road. Doing it without a REALTOR®, selling that home, making that purchase, yes it can be done successfully, but with a lot more bumps in the road that you might not have had to have,” added Tracy.
A Real Estate Agent is Another Pair of Eyes
When working with an investor-friendly real estate agent, you have another member on your team who is watching out for your best interests. Sure, real estate agents work on commission, but if you are unhappy with your home or get handed a property with serious problems, they won’t get future business from you. As an investor, agents know you could be a repeat customer.
Tracy discussed commonly overlooked issues that unrepresented buyers often overlook or make too big of a deal about. “Often the big M Word, mold, is not always mold…people are afraid of that. Often it’s something as simple as a box was left on a floor. I’ve seen this happen many times and mildew was underneath it. It’s an easy fix,” said Tracy. “Electrical issues, for instance the electrical needs updated. If you’re not a person who is represented and didn’t think to look for that, you may be at a closing table before you realize it. Often people who are unrepresented do not think that they need to do inspections, or when they do the inspections, they are again unrepresented [and] no one is there to negotiate on their behalf.”
If You Still Want to Go at it Alone
It’s understandable if you still want to purchase real estate alone. You may be an expert in your market and you may be an expert negotiator who is used to dealing with sellers and working with attorneys to draft purchase/sale agreements. If you already operate alone, or are considering working with a real estate agent, consider this advice from Tracy:
“Really spend a lot of time understanding the market. Don’t just look at yesterday or the week before or what your neighbor’s house sold for. Understand that the trends happen at different times of the year, different seasons,” she said. “As a buyer out representing yourself, why would you? A REALTOR® costs you nothing as a buyer. Our services to a buyer are free, it doesn’t end at the closing table for a REALTOR®. Often I have clients that call me after and have questions about their home or things that I might be able to help them with.”
Last but not least, here at AssetRover, we are always interested in creative negotiation techniques that people use. When making an offer on a home, Tracy will print stats on homes that have sold in that market and send that MLS sheet in with her offer. It’s not a personal attack on the home this way. When it comes to investors, she ensures the seller realizes that this is the case. Investors have a much different reason for purchasing a home vs. a homebuyer, and emotions need to be checked at the door. “[The sellers] need to understand and be informed that this is an investment and [that] there’s no emotional involvement here,” said Tracy.
“With investors, first time investors especially, understand that you’re not always going to make a lot of money off your first transaction,” cautioned Tracy. “Be prepared to walk away…walk away for a few days. Let them come back…let them think about it for a while, especially if the home has been on the market for a while. I don’t advise that if it’s a home that has just hit the market or is not even on yet. It’s time to move quickly on those ones, but make your best offer sometimes, don’t always low ball. Sometimes come in with your very best offer if you know that [the] property is actually worth it.”
Check out the video interview above to hear more about Tracy and how an investor-friendly real estate agent can be a vital partner to you and the rest of your real estate investing team.
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[00:02] Jeri: Hey investors, my name is Jeri Frank and I’m co-founder and CEO of AssetRover and today I’m here with Tracy Whitford, who’s a real estate agent for Iowa Realty. Hi Tracy.
[00:12] Tracy: Hi Jeri.
[00:13] Jeri: How are you?
[00:14] Tracy: Good, thanks.
[00:14] Jeri: Good. We’re going to just start off talking about your business. Tell me about your business and what you’ve been doing.
[00:22] Tracy: The real estate business … very fast-paced, requires a lot of patience, the ability to enjoy being around people, and understanding that each individual person, whether they’re a home buyer or a seller, has different needs that might not always agree with what your goals are for them. Buying and selling homes, showing homes is just a very small part of what we do.
[00:46] Tracy: Most have to really enjoy people and have a great deal of patience.
[00:51] Jeri: What do you like most about what you do?
[00:53] Tracy: Meeting people, the negotiation part, the detail that it requires. Every day in this job is a learning experience and I’ve heard many seasoned agents say that they’ve been in the business for 30 years and they’ve learned something new every day. For me, in addition to being a bit of a caretaker and a people person, I enjoy the negotiation end of it.
[01:18] Jeri: Excellent. There are lots of REALTORS® out there, right? But what should people look for when they’re looking for a REALTOR® to help them find properties for their real estate business? What kind of things should that person look for in a REALTOR®?
[01:34] Tracy: Trust. A comfortable relationship that is not just business at all times. That you can trust that person, you know always they’re looking out for your best interest. Working with investors requires understanding that you will be writing a lot of offers.
[01:50] Tracy: They will be low offers. Understanding the market is just a small part of it. Showing homes is a very small part of what we do. In addition to showing homes, searching for the homes, watching for them to come on the market, understanding that you need to move quickly if they’re a good investment. Making sure that I’m checking the market to weight out the time of year pricing is different in the winter versus in the springtime.
[02:19] Tracy: Trusting that person is foremost and knowing that they are always looking out for your best interest.
[02:24] Jeri: Do you think it’s important that real estate agents have previous investment experience themselves?
[02:31] Tracy: I think it helps, I don’t think it’s a priority. I think it helps if you’ve had rentals of your own or if you’ve done flips on your own. Certainly helps you to understand what they are getting into.
[02:44] Tracy: As you’re going along through the steps of the negotiations, your advice and your trial and errors certainly help them.
[02:52] Jeri: In summary, you really, as an investor, you’re looking to gain a relationship with someone that you entirely trust, that you have a relationship where it’s okay if you’re going to write 50 offers.
[03:06] Tracy: Correct.
[03:07] Jeri: Knowing that you can … That your REALTOR® has an eye out for the exact type of thing you’re looking for so they’re not wasting your time.
[03:18] Tracy: Right, and know what that is. Listening and understanding that it is a transaction, a business transaction, that it is not personal for an investor.
[03:26] Jeri: Right.
[03:27] Tracy: That bottom dollar is key. This is not an emotional decision. REALTORS® I believe, can take the emotion out of the transaction, advise the investors where they think the bottom dollar should be, and advise them strongly to be willing to walk away from a lot of transactions. Unfortunately, all homeowners are not investors so they have personal ties to their homes and are offended by the offers sometimes. That removes you, the investor, out of the transaction and takes the heat off of you per se.
[04:06] Jeri: Right. That is nice. That is very nice. What do you do differently for investors versus a regular home buyer?
[04:15] Tracy: I completely keep in mind always that I am not looking for a home for them.
[04:22] Tracy: When I’m working with a family, a retired couple, a single person, I’m looking for something that they particularly are looking for for themselves, for their forever home, for their first home, for their particular needs. As an investor we are looking for an investment property, something that they can rent, something that would be a good flip to turn around quickly, something that will sell quickly once they do put the work into it.
[04:49] Tracy: There is no emotion involved and I remind the investor often that there is no emotion involved in this transaction. We may write 10 offers every month and end up with one perhaps.
[05:02] Jeri: Who should use a REALTOR® and why?
[05:04] Tracy: Naturally, I would say everyone. However, there are people who are equipped and who have been the investment or the home buying business for themselves for years.
[05:17] Tracy: That’s not that it’s impossible to have a successful transaction. However, as a REALTOR®, showing homes is just a small part of what we do. We know the market, we study it, we see it every day. This is what we do as our career, we’re professionals. We have an entire team that works with us.
[05:35] Tracy: In addition to the role that we play in studying the market every day, searching for homes, seeing them as they come on the market, often finding them before they come on the market for investors is something that an investor doesn’t have access to. Or an unrepresented buyer or seller does not have access to those things.
[05:58] Tracy: In addition, we have an entire team. There are 700 REALTORS® in the state of Iowa and we’re all working together for the same thing. The goal is to continue to have real estate grow and flourish and we work together to achieve that goal. In my opinion, using a REALTOR® is highly important.
[06:21] Jeri: You’re day-in, day-out seeing the market trends, you’ve probably seen lots of different scenarios, you can kind of protect against the things to look out for when you’re looking at paperwork.
[06:33] Tracy: Exactly.
[06:33] Jeri: You’ve seen it. You have experience.
[06:35] Tracy: Correct.
[06:36] Jeri: It gives that investor guidance so that they don’t step in a hole they don’t want to step into.
[06:41] Tracy: Correct. Walking into a home, I’m in homes every day. There’s not a day that goes by that I’m probably not in at least one or two homes. I notice things that might concern one person, or might not concern them at all. I like to call issues structural issues. Things that are not something to be afraid of necessarily but an observation that we might have that the average person would not see.
[07:08] Tracy: Often people who are unrepresented are afraid of things that they think are going to be a problem. Where we know that they’re really an easy fix. We’ve dealt with them through inspections and through many, many contractors day in and day out.
[07:23] Jeri: It may help someone find that jewel on the rough.
[07:26] Tracy: Right, exactly.
[07:27] Jeri: Can you give me an example of one of those things that is often looked over but you can pinpoint it as something that is, in the end it’s really kind of a minor fix that needs to occur but would potentially give you a better place at the negotiating table but could be easily addressed?
[07:46] Tracy: Well often the big M word, mold, is not always mold…people are afraid of that. Often it’s something as simple as a box was left on a floor. I’ve seen this happen many times and mildew was underneath it. It’s an easy fix.
[08:00] Tracy: Electrical issues, for instance the electrical needs updated. If you’re not a person who is represented and didn’t think to look for that, you may be at a closing table before you realize it. Often people who are unrepresented do not think that they need to do inspections. Or when they do the inspections, they are again unrepresented, no one there to again, go back and negotiate on their behalf.
[08:25] Tracy: Roofing, that’s in a very important part, it’s an expensive fix. Advising people on what are the expensive items in a home to fix. Kitchen and bathroom updates are always the most expensive.
[08:38] Jeri: Really, when I use a REALTOR®, I get a team of people backing me all the way through the process.
[08:46] Tracy: Absolutely.
[08:47] Jeri: What advice do you give to people who are considering representing themselves or buying for themselves? Basically being unrepresented.
[08:57] Tracy: Really spend a lot of time understanding the market. Don’t just look at yesterday or the week before or what your neighbor’s house sold for. Understand that the trends happen at different times of the year, different seasons. Often sellers who are selling on their own have a great deal of attachment to their home. They often don’t understand that a granite counter top or that upgrades in the home that would make it more attractive, do not raise the value of the home necessarily. The home still has to appraise regardless of what you did to the inside. It has to appraise and will only do so if you can compare it to other homes like it, they may not have had the beautiful upgrades that you put.
[09:40] Tracy: Time put into it…a seller is not always available when their representing themselves, they’re just not always available there. They have a job. They’re trying to show their home on their own. They’re not going to really want to tell you anything about the house itself more than the history of their life there.
[09:57] Tracy: As a buyer out representing yourself, why would you? A REALTOR® costs you nothing as a buyer. Our services to a buyer are free. Again, you have an entire team of people, it doesn’t end at the closing table for a REALTOR®. Often I have clients that call me after and have questions about their home or things that I might be able to help them with.
[10:18] Jeri: It’s not, “Don’t do it.” It’s just, “Be warned, there are some things you need to look out for.”
[10:26] Tracy: Absolutely.
[10:27] Jeri: It can be done successfully but it really does require a little more skill, probably a lot more involvement day to day to understand what’s really going on.
[10:37] Tracy: Right.
[10:37] Jeri: It is harder to step back emotionally from either side of the deal.
[10:42] Tracy: Correct. I’ve had rentals of my own and have done flips on … My husband and I have as well, and I think you need to be prepared for the fact that there’s a lot of bumps in the road. Doing it without a REALTOR®, selling that home, making that purchase, yes it can be done successfully, but with a lot more bumps in the road that you might not have had to have.
[11:07] Jeri: Right.
[11:08] Tracy: We earn our commission.
[11:11] Jeri: Yep. I’m sure you do. What advice do you give to real estate investors around negotiations?
[11:16] Tracy: Be prepared to walk away. Be ready to write a lot of offers, look at a lot of homes, and go through a lot of “no’s.” Do not take it personal but always be prepared to walk away and understand that the bottom dollar is where you need to be. Also with investors, first time investors especially, understand that you’re not always going to make a lot of money off your first transaction. If it’s a flip on a house, you may make some mistakes, you may put a little more money into it. Again, because you’re trying to make the home something that you would live in as well. You may not have as big of a turnaround as you will later down the road. It’s a learning curve.
[12:00] Tracy: If you’re using them as rentals, there’s a lot to learn with that. Again, that a REALTOR® can help you with, but you do have to have a learning curve and understand how to manage the property, what type of homes rent, what type of homes sell later when you fix them up.
[12:15] Jeri: Have you used any particularly creative negotiation techniques that you’d like to share?
[12:20] Tracy: Often what I will do so that I am not insulting a seller of a home, I often will print off homes that have sold in that market, send that MLS sheet with my offer, so that they understand that I’m not attacking their home personally, that it’s not a personal attack. That I am studying the market, that I’m making this offer for this reason. I also often make sure that I do call the listing agent, if I am not the listing agent, and let them know that this is an investment property.
[12:57] Tracy: This is not meant to insult anyone and that this will be the offer so that there are not misguided negotiations at the table of where the seller might think that I’m coming back at this amount. They need to understand and be informed that this is an investment and absolutely no emotional is attached to … Emotional involvement here.
[13:21] Tracy: Negotiation tactics, walk away for a few days. Let them come back, let them think about it for a while. Especially if the home has been on the market for a while. I don’t advise that always if it’s a home that has just hit the market or is not even on yet. It’s time to move quickly on those ones but make your best offer sometimes, don’t always low ball. Sometimes come in with your very best offer if you know that that property is actually worth it.
[13:47] Jeri: Do you do anything around … Do you have any suggestions around understanding the seller’s motivation for selling?
[13:55] Tracy: Absolutely. I often go into the MLS site to see what the history on that house was, I go into the assessor’s site to see when they bought it, what they paid for it, how long did they live there. If I can find anything out about why they’re moving, absolutely it’s a very important part of understanding what they’re motivation is. Do they need to get out of the home? Is there a lot of equity built in the home already?
[14:16] Jeri: That all kind of feeds into understanding what they potentially would accept for the offer.
[14:22] Tracy: Exactly.
[14:23] Jeri: Can you give me some examples of eye opening experiences you have had with some of your clients over the last few years?
[14:31] Tracy: In the last 12 months, I believe I have sold eight “for sale by owner” homes. Something that is eye opening I believe for myself as well as sellers and buyers. Often buyers are very, I’ve learned, are very afraid to go in unrepresented or they regret it afterwards. Sellers think that they originally have the time to show their home, have the knowledge of what the home should look like, what to do to make it more appealing, how to market it.
[15:05] Tracy: They really don’t, actually. I think that people find out after they’ve spent a great deal of time with their home on the market, kind of missed a lot of showings because they were not available because they were at their full time jobs, missed calls, passed up offers that were actually indeed good offers but they were offended by it. When they’ve listed with an agent and myself in particular, they’ve had the home sold very quickly.
[15:33] Tracy: In the last year in fact, I had a ‘for sale by owner’ and she’d had it on the market for five months in a very high traffic area, beautiful home, should’ve sold. I did not reduce the price, listed it, and sold it in four days for asking price.
[15:50] Jeri: Wow.
[15:51] Tracy: That’s happened on numerous occasions. I believe that’s an eye opener for everyone that marketing, being available to buyer and seller at all times, again is priority.
[16:06] Jeri: When you walk into a home, what are you looking for?
[16:10] Tracy: When I’m representing the seller, I try to place myself there and again, it’s not always going to be a home that I want to live in but I want to stage the home so that when potential buyers walk into the home, that they want to picture their life there. Put yourself in a situation of them wanting to live in that home and live your life, almost being envious of you. I want to take over this person’s role here.
[16:37] Tracy: I bring in a professional stager. I initially do the first consultation and explain to a person that if the home is going require a lot of work, we’ll have to list at a lower price. If we want to get top dollar out of it, we need to take out the dated look. We need to make sure that it looks fresh, clean, and desirable. After I do the initial walk through with them, I then bring in a professional stager to move things around, to per se take the heat off of me, have her explain to them that closets need cleaned, cupboards need organized. She actually stays there and helps them do it actually.
[17:13] Jeri: Wow.
[17:14] Tracy: That’s a fee that I pay. If I’m representing a buyer, initially the first thing I’m doing is hopefully I’ve done my homework on the home somewhat before we even see the home. If I see some interest in it, I initially I immediately start looking for, not necessarily flaws in the home, but is this a home that that buyer can stay in? What is their goal? Is it a five year plan? Do they plan to be there for 15 years? Can their family grow in this home? I initially start looking for things like that. What is it going to require to get them into this home? Is it a good investment for them? Even if it’s a personal situation, not just an investment property. When they decide to sell it, what is their length of time that they plan to be in that home?
[17:56] Tracy: Or what do they plan to use it for? Such as an investor. Are they going to use it as a rental or a flip? Those are all different things to consider when you’re negotiating prices, or when you’re looking for a home. A flip, naturally you would expect that there’s going to be some work that needs to be done. If you’re looking at it as a rental, you want minimal.
[18:16] Jeri: Okay. If someone’s interested in working with you, how do they contact you?
[18:20] Tracy: You can reach me at TracyWhitford@IowaRealty.com or contact me at 319-929-6547 or you can visit my website on IowaRealty.com. [tracywhitford.iowarealty.com]
[18:34] Jeri: All right. Thank you very much Tracy.
[18:35] Tracy: Thank you, I appreciate this.