There’s always something to howl about

The Chupacabra, Loch Ness Monster, and the Most Rare Sighting of All; an Amazing Broker

It’s been quite a while since I last wrote on Bloodhoundblog.  It certainly doesn’t mean that I have been absent; frankly, it just means I have been too busy to take 30 minutes and compose an interesting thought provoking piece of writing up to the standard we have all come to know and love on this site.

But I digress, as a real estate investor I have only worked with two great brokers in my entire investing career.  I find most run-of-the-mill brokers to be under-educated, uninspired, and more interested in cashing a check by any means necessary than actually meeting my needs.  The first broker was a dynamic “buyers” broker, who understood my investment goals and my available capital.  Rather than over promising and under delivering, she relentlessly showed me house after house for 4 weekends straight until we found the right quaint little fixer-upper in my price range.  Her reward, a $2,000 commission on a $40k home sale and my testimony.

What was my testimony worth?  I did two more deals with her, both taking much less time and for a much higher dollar value in the next year (+$10k to her bottom line).  I did another deal with her the following year for another $10k to her and I referred her like crazy to all of my investing friends.  Even if none of them bought a single thing from her, she turned a $2k commission into $20k, at no additional cost to her and very little time thanks to her investment in me and her in-depth market knowledge.

Realtor number two is basically the same story, but add a few more zeros given some career advancement and price appreciation (Detroit vs. New York City).

From a buyer’s perspective, I am looking for the following qualities:

  • Market Knowledge – I don’t need you to print off a list of 80 comps (not reviewed 90% of the time) and ask me what I think.  I need you to send me a targeted list of homes you have been inside and already know will meet 90% of my needs.  I need you to know why this block is superior to the next and I need you to know something about the seller if at all possible.
  • Industry Knowledge – As an investor, I run my own spreadsheets, but I do need you to have a general sense of what properties make sense for investors vs. homeowners.  We are different.  A home does not qualify as an investment just because it can produce enough rent to cover the mortgage.  I need to understand what kind of appreciation this market can expect.  Are there good schools in the area?  Is it a transitional neighborhood where I should be looking to hold for 3 – 5 years, or is it a heavy flip area where I could probably sell it to another investor?  Any new commercial / retail coming to the area?  Have a general idea about capitalization rates?
  • Passion – Realtors that don’t love real estate should not be employed in real estate.  If you don’t spend at least one hour a day looking at interesting real estate articles in your area just for the fun of it, you are not the person I want to hire.  It’s great to love putting people in homes, but to be an amazing realtor you need to love homes, neighborhoods, and almost everything else there is to love about real estate.  This is one of those characteristics you know when you see it immediately.

Are there other qualities that make a Realtor great, sure, competitive spirit, entrepreneurial drive, basic customer service skills, etc, but the three qualities above are my base criteria.

I am going to make a committed effort to start writing once a week again.  Thank you to Don for knocking the cobwebs off of my keyboard.


7 Comments so far

  1. Sterling July 20th, 2012 4:40 pm

    It is true that an Amazing Broker is harder to find than Chupacabra.

  2. Don Reedy July 20th, 2012 8:10 pm

    Man, I missed your writing. You have a perspective that fills out a lot of what others of us do not do on a regular basis. Of course Bawldguy works in your arena, but many of us are fringe junkies of what you do and know.

    In the end, however, the nail has just settled nicely into the wood. Your analysis of passion and knowledge kick the can well down the road.

    Keep writing. The air we breathe just got fresher.

  3. Jeff Brown July 20th, 2012 8:22 pm

    So simple, yet so accurate. Great stuff, Michael.

  4. Sean Purcell July 20th, 2012 9:40 pm

    Love it! Nothing like hearing straight from the consumer’s mouth. But can you imagine my surprise when I read your top three list of qualities! Where’s your deep respect for all the letters after an agent’s name? That’s got to rival Industry Knowledge, doesn’t it? And what about the massive media budget that creates franchise name recognition? Surely that must be as important as Market Knowledge. I don’t know Michael, as a consumer I have to question if you really know what you want. 🙂

    By the way, I’m curious; if you were to rank those 3 qualities, as important as they all are, what would be first for you?

  5. Eric Blackwell July 21st, 2012 4:29 am

    Enjoyed the post! (and looking forward to more as well) One quick question,because I am a marketing guy… How did you FIND the two that you worked with?

    Referrals? Net? Ads?

    Curious about that!

  6. Cooksquared July 23rd, 2012 5:37 am

    “Where’s your deep respect for all the letters after an agent’s name?”

    I love this quote. It takes a while to understand that college and continuing education only give you the tools to learn. They don’t actually teach you anything.

    You learn by doing, not by sitting in a classroom or passing tests. My generation is still learning this lesson very painfully, as many struggle to stay in the job market. I have been able to endure the downturns because I was always more valuable than my counterparts, not because of my MBA or Ivy League education. 50% of my MBA Ivy league educated classmates got fired in 2008. Many of them are still struggling to find their way because they have a sense of entitlement. Common among all career fields, Realtors are no exception here.

  7. Cooksquared July 23rd, 2012 5:47 am

    “How did you FIND the two that you worked with?

    Referrals? Net? Ads?”

    “By the way, I’m curious; if you were to rank those 3 qualities, as important as they all are, what would be first for you?”

    These two questions have very synergistic answers. The first I found on the back of a grocery cart. She was literally everywhere. Billboards, benches, web, etc. But the grocery cart put her over the top.

    The second was actually a referral. I was watching her in action and she was amazing.

    Both went through a rigorous interview process. I would never choose an agent without first interviewing them, at least twice. Ironically, this offends some agents. Frankly, I am surprised everyone doesn’t interview at least three or four agents, as this will be the person representing/assisting them on one of the largest cash transactions of their life.

    In the interview, I was immediately struck by the three characteristics I mentioned in the article. But what puts both over the top is the fact that they live and breath real estate. Their passion rivaled my own. They loved what they did and they did it well. They loved competition and they didnt feel entitled to anything. They were honest, letting me know when I was being unrealistic in my pricing or expectations, but also letting me know areas where I should be pushing for more. They werent closers, they were actually representing my interests.

    Furthermore, they knew everything and everyone in the neighborhood. They didnt just give me a list of three mortgage brokers, they told me what brokers were good for what types of investments. They didnt just take me into the house, they told me what the owners bought it for and when they bought it. They were always one step of ahead of me and that is hard to do.