I am a real estate agent and that gives me a huge advantage when finding great real estate deals. I am able to find more deals, save money on commissions and make offers quickly as a real estate agent. I talk much more about why you should be a real estate agent if you are an investor here. If you are not a real estate agent, you can still get great deals if you can find a great real estate agent to help you.
How to find an investor friendly real estate agent
The first step to getting a real estate agent to help you finding great deals is to find a great agent. There is a huge difference between a regular real estate agent and an agent who knows how to work with investors. An investor friendly real estate agent needs to understand how investors work. An investor needs to submit a lot of offers and submit offers very quickly. Real estate agents that meet these guidelines are hard to find, but I wrote an article on how to find an investor friendly real estate agent here. Do not be afraid to try out a few real estate agents if you do not find a good fit.
Once you find a real estate agent, how do you motivate them?
Finding a great real estate agent is the first step. Once you find a great agent, you have to motivate them to find deals for you. Some investors have the time and experience to find their own deals. They check Zillow or foreclosure websites daily to find a great deal. Not all investors are able to find their own deal and these investors have to be able to motivate their agent.
The best way to motivate your agent is to let them know you are using that agent exclusively. Some investors like to use multiple agents to find deals, because they feel that gives them a better chance to get a deal. If a real estate agent thinks their client may use another agent to buy a home, they are not going to have any motivation to find deals for that buyer. Would you rather have multiple agents not looking for a deal for you or one agent working their butt off to find you a deal? I discuss many reasons why it is usually best to work with one agent here.
Money is a great motivator for real estate agents
A great motivator for anyone is money and real estate agents are no different. When a buyer works a with a real estate agent, the seller typically pays for the commissions. The buyer does not pay the real estate agent that represents them. However the buyer can offer the real estate agent that represents them a bonus if they find a deal for them. If you want to motivate a real estate agent to find you a deal, then agree to pay that agent a percentage or flat fee bonus for any home that you buy from them. For more information on how real estate agents get paid, here is a great article.
If you are worried about spending a little extra money on a house by paying your agent then you may miss out on some great deals. It is not easy to get a great deal on a home and sometimes you have to make some sacrifices. In the long run it is well worth it to pay a little extra for a great deal as opposed to missing out on the home. Remember to always check state laws to make sure it is legal for a buyer to pay their agent a bonus.
Real estate agents can motivate other agents as well
Being a real estate agent makes it easier for me to find deals, but I can’t find every deal myself. I have many friends and acquaintances in the business. They know I buy houses for fix and flips and long-term rentals. They know I am always looking for a great deal, and that I will be happy to pay them if they find a great deal for me. Even if that agent finds me a house that is listed by another agent I will be happy to pay them a referral fee for finding that home.
How much of a bonus should you offer your real estate agent?
The amount you offer your agent is up to you, but $1,000 would be a great bonus for most agents. That is assuming the homes you are buying are under $200,000. If you are buying much more expensive properties, you may have to offer a larger bonus to motivate your agent. You also have to remember that your agent will not get paid anything unless you end up buying a home from them. If you are making ridiculous offers that will never be accepted, then it may be very tough to motivate your agent no matter how much of a bonus you offer. You may have to pay your agent by the hour!