Investing in real estate is a time-tested way to grow your portfolio and earn passive income. Whether you’re interested in managing rental properties, flipping and reselling houses, or finding investment properties to sell to other real estate investors, partnering with the right broker can make a huge difference.
A broker can help streamline the selling process, saving you time and effort while helping you capitalize on your sale. However, you’ll want to find an experienced broker familiar with the investment market.
This article will discuss some essential tips forin finding the best broker for your property, whether it is a townhome, shopping plaza, or medical office.
First, What is a Broker?
A broker, also known as a broker agent, is a real estate agent licensed to own a real estate firm. Brokers have higher credentials than non-broker real estate agents. Real estate agents must work under a licensed broker.
Whether you work with a real estate agent at a brokerage or with a specific broker, it’s essential to look for a firm that specializes in investment properties, has a proven track record in the area where you’re investing, and has experience working with your property type.
If you expect to invest in multiple properties, finding a trustworthy broker with whom you can develop a professional relationship is even more critical.
Here are some tips to help you decide if a specific broker is right to sell your investment property.
1. Always Ask for References or Case Studies
It doesn’t matter whether you’re selling a small one-family house or a large apartment complex — in both cases, finding a broker who has successfully navigated deals with interested buyers is crucial.
When interviewing brokers, ask if they have references you can check out or if they have any case studies documenting previous sales that you can review. A successful brokerage will offer you one, if not both.
And don’t just take their word for it. If they provide you with past clients or companies, call them and get honest feedback about the broker’s past work experience.
2. Make Sure They Understand the Local Market
A broker can have vast experience but finding one who truly understands the market you’re investing in is key. Ask about a broker’s previous selling experience in an area before hiring them.
For example, selling in an up-and-coming area will look very different than an established suburb . And buyers in each area are typically looking for different selling points.
Finding a broker who understands the clientele in the area you’re selling in will help them better sell your property at the highest possible price.
3. Find Out if They Also Invest in Real Estate
Selling a home is very different than selling a commercial investment property. While your broker doesn’t have to invest in real estate to successfully navigate your property sale, finding one with personal investment experience can be helpful.
When a broker has first-hand experience dealing with investments, they’ll have a better understanding of the process and risks, which can help reduce any mistakes along the way.
4. Test Their Response Time
You can learn a lot about how well you work with someone by seeing how well your communication styles match up. When you reach out to a broker, how long does it take for them to respond? Do they reach out? Or does an assistant? Is it via text or possibly email?
There’s no right or wrong answer here, but you want to ensure your communication style meshes well with the broker you hire. If you like to talk on the phone, but a specific broker prefers email, you may find the relationship more difficult to maintain.
5. Ask to See Their Marketing Plan
How will your broker go about selling your investment property? A marketing plan is what your broker will follow to build interest around the real estate you’re selling and try to maximize your sales price.
Ask to discuss the marketing plan — or ask the broker to develop a high level plan during your first meeting — to determine if it’s a good fit for your investment. You’ll also want to pay attention to what you’re receiving in this plan. Are they providing professional photography? A video tour? How will they make your property stand out among other similar places?
Be sure to ask a lot of questions about their marketing approach so you’ll get a better sense of how they’ll work to sell your property and whether or not it’s a strategy that also makes sense to you.
6. Find Out the Costs Upfront
Of course, broker fees and commission rates are essential to know off the bat. While most brokerages charge a 6% commission, there may be some wiggle room to negotiate. It’s also important to understand precisely what services you’re getting for that fee, as not everything – photography, for example – is always included.
Discount brokerages may be more affordable than full-service brokerages but may only include some of the services you need.
7. Trust Your Gut
Experience, marketing knowledge, and marketing prowess are all essential but don’t overlook likeability. Suppose you plan to sell multiple investment properties or partner with a broker for several years. In that case, you’ll want to find someone with whom you can develop a solid, long-lasting relationship.
The Bottom Line
Every investor will have their own idea about what makes the perfect broker. If fast communication is vital to you, for instance, you may be more relaxed about whether or not the broker has personal experience in real estate investing. However, if you’re building an investment business, you might emphasize a broker’s real-life experience and client references.
Take your time when looking for the right broker for your properties, as the right broker plays a sizable role in the success of your real estate investments.
Ben Mizes is the Co-Founder and CEO at Clever Real Estate, the nation’s leading real estate education platform for home buyers, sellers, and investors.