Many investors make the costly mistake of considering real estate agents as competitors. They incorrectly see themselves out in the market competing for a limited number of dealsófighting it out with local agents and brokers to make money. This costs them time, and it costs them thousands of dollars from lost deals.
The truth is that as an investor one of the most profitable relationships you can ever develop is with a real estate agent. Think about it for a moment. As an investor your market is motivated sellers who donít need all cash at closing (and are willing to be flexible on the terms of sale) or who are willing to deeply discount the price of their properties for an immediate sale.
But the majority of sellers you talk with as you do your lead generation are NOT motivated sellers. As many as 90% of the sellers you talk with are not motivated enough to be flexible on price and terms like you need them to be. Most investors toss these sellers into the round file, and this mistake costs them dearly.
Instead, pass those sellers you cannot help onto your real estate agent ally. He will be able to turn these sellers into a steady stream of commissions as he lists, then sells their homes.
Remember: most agents spend tremendous amounts of time and money to find the very people you turn up in such great numbersóhomeowners looking to sell for all cash and who have the time to wait for a top dollar offer.
If you can help your agent friend get just one more listing a month you are adding tens of thousands of dollars to his annual income!
So whatís your payoff? Actually, you donít just get one payoff, you get five!
Payday Number One:
A listing is an exclusive agreement a seller signs with an agent giving them the right to sell the home for the seller. This agreement is typically for 3 to 6 months and many times an agent is unable to sell the house within that time period.
Have your agent ally search the MLS (Multiple Listing Serviceóa database of properties for sale that only real estate agents have access to) looking for properties that didnít sell and whose listing has expired. These owners are far more likely to have grown motivated and are ripe for you the investor to call and put a deal together on their house.
In many cases the expired listings will not have a phone number for you to contact the owner. Thatís good! If it were too easy then another investor would have beat you to the prize. Simply take the information and do your own research. You can use the street address and a reverse directory to look up the phone number. (One such directory is called the Coleís Directory and is probably available for you to use for free at your local library.)
Once you find the phone number, give the owner a call and see if they are flexible enough for you to buy their property.
Payday Number Two:
Have your agent friend do a search of the MLS for key words that indicate motivated sellers. The agent simply searches the comments field for words like: "lease-option," "flexible terms," "owc," "moving," "transferred," "estate sale," or "contract for deed."
If a listing has these words in it chances are pretty good the seller is worth a phone call. Then you contact these owners and see if you can put a deal together.
Payday Number Three:
Just like you are out there sorting through sellers, so too is your real estate friend. And when he finds an owner he canít help but who shows signs of being motivated, your agent can refer the seller to you. Better yet, ask your agent friend to pass along the owners name and phone number and give the owner a call yourself. This is a great source of deals that no other investors will know about!
Best of all, when you get this third party referral you are getting a huge boost to your credibility. In essence the real estate agent is recommending you to the seller. This makes things much easier for you to put a deal together than if you were just coming in cold.
Payday Number Four:
Fast and Free Access to Property Information
When youíre out there putting together deals, wouldnít it be valuable to be able to call up your real estate contact and ask him for information like sales comparables, market rents, and rates of appreciation?
If youíre passing on several good leads a month to your real estate friend you will be amazed at how fast he will get back to you with this information he simply pulls up from the MLS. After all, if he isnít fast, there are many agents out there who are dying for your leads who will be much fasterÖ
The most important thing to remember when you are putting together this relationship to begin with is to always be willing to give value first. This means pass leads on to your agent friend for a short while BEFORE you ever call them up asking you for a favor. This will help you build trust into the relationship and cement your agent to working with you.
Also, if you are ever negotiating on a property through a real estate agent keep in mind their biggest fearóthat you as an investor will try to cut them out of their commission. The way to handle this is to stress that you want the agent there when you negotiate with the seller. Try saying something like, "Mr. Realtor, when is a good time for you, me and the seller to all three get together to talk this through? I really think itís important to have you there so that both the seller and I can tap into your expertiseÖ"
Over time this relationship will payoff handsomely for you. When you get the relationship going strongly youíve just added a helper who is working with you to help you make more money.
One of my students used this idea of networking with real estate agents to find a six year lease option on a $200,000 property with nothing down! If he can do it, so can you.
Finally, here is a sample direct mail letter that you can use by fax or mail to get interested agents to call you hoping to work with you. When they call (and they will call) just sort through them and choose two or three agents to start building a long term relationship with.
Local Real Estate Investor
Needs Talented Real Estate Agent
To List and Sell Properties!
Iím writing you this urgent letter because I keep finding properties that I need your help to sell.
As an investor who purchases properties all over __(your city)__ I regularly call property owners who are trying to sell their homes.
Because I use a number of different techniques to buy properties with either very flexible terms of sale or at a large cash discount, I come across many sellers I just canít help.
In fact, most of the sellers I talk with need to get all their equity out of their home up-front and they need retail price. The bottom-line is they need a talented real estate agent to list and sell their home for them.
Iím hoping you are that good agent!
If youíre the person I choose to work with then Iíll gladly pass on these hot leads to you. Itís like getting a large number of additional listings set in your lap with no effort on your part.
If this is something you want to talk further about your next step is a simple one: call my office at 555-2777. Weíll simply have a five minute conversation to see if you are the agent Iím looking to work with and give these free leads.
My very best to you,
P.S. If youíre willing to help these owners sell please give me a call at 555-2777.
Get your FREE copy of this Best Selling 288 Page Book! "How to Create Multiple Streams of Income Buying Homes in Nice Areas with Nothing Down" by David Finkel and Peter Conti HERE
David Finkel is the best-selling co-author of, How to Create Multiple Streams of Income Buying Homes In Nice Areas With Nothing Down (ISBN: 1893384152). Ex-olympic level athlete turned real estate millionaire, he's taught thousands of students across the country how to be more successful investing. In fact, his students have bought, sold, and lease optioned over $100 million worth of property over the past decade. You can also visit him on the web at www.resultsnow.com.
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