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How to Protect Yourself With Realtors

By Heather

Before I even get started, I want to say that there are definitely a few good Realtors that are a tremendous asset to your business. When you find these men and women, you absolutely MUST hold onto them. They will bring you hidden deals, can simplify the purchase and sale process, and can make you a tremendous amount of money.

So, again, when you find these select few, don't let them go too far. They are worth their weight in gold.

The problem is that Realtors were generally taught to sell houses very traditionally and don't often have an understanding of the creative methods that investors utilize. If you remember that a Realtor is simply a salesperson, you will minimize your frustration substantially. Some salespeople are better than others.

You must always check and recheck your Realtor until you have established a trustworthy relationship and he/she knows how to help you run your business. Also, you must make sure that your Realtor understands contracts and actually reads them!

Now having said that, I will just go over a few of the things that our late Realtor did that caused substantial problems for me. For one, she was not acting in my best interests. I bought over a half million in property with her in my first four months and sold another property with her. I had three contracts fall through. So, a potential of over $1M to her in only four months.

First, she ended up making me talk directly to the other Realtors and/or sellers on more than one occasion. In fact, on the one property I listed with her, she basically forced me into accepting the offer (though she convinced us that she could sell it for a higher price and we had offers at that price ourselves previously). Not only did she basically make me take the offer, she made me negotiate directly with the buyer and the buyer's Realtor At the very least, your Realtor should keep you from having to talk to OTHER Realtors As if one isn't stressful enough!

Even more, on this particular deal, she tried to charge me additional fees which we had paid her when I purchased the property initially. And, throughout the length of the contract, she continually worked in the best interests of the buyer, though I was her client and the buyers had their OWN Realtor

She also cost me $1500 on my next deal. She sent over the wrong signature page of the contract that stipulated they sellers pay for termite treatment. Now, normally, I would just assume that it was an oversight, but I am pretty certain that she simply didn't want to address the change on the contract because she continually told me that we had to bend over backwards because this Realtor was SO nice. So, she ended up losing that money for me only a few weeks after the previous deal.

Furthermore, she had me in several potential lawsuits for not following through with paperwork. She never sent addendums or verified receipt of such and almost lost deposits on three occasions totaling over $8000. And then, to top it off, she had the audacity to yell at me for not following through on all of our deals. I politely explained that an investor may not always follow through as they gain information throughout their due diligence. We had a rather heated exchange of words and agreed to part ways.

The long and short of it is basically that you need to always follow up and verify, verify, verify that your Realtor is doing his/her job especially in the beginning. It is kind of a catch 22 because you are trying to learn the business at the same time.

One more thing to note, seasoned Realtors may not be as investor friendly as new Realtors But new Realtors lack the experience and knowledge to dot all the i's and cross all the t's. But remember, they have state licenses and are bound to very specific rules that you can politely remind them of.

Always ask other investors for referrals. They should always know one or two that can assist you in the beginning and to help you get going.