Ultimate Guide to Selecting an Investor Friendly Real Estate Agent

Selecting an investor-friendly real estate agent is an important early step in your real estate investing journey.

The right agent understands investment properties and can help you find deals that align with your goals.

They can provide insights on:

• Strategy Selection – You’ll gain insights on which investment strategies work best in your local market. An experienced agent can guide you through options like buy-and-hold, fix-and-flip, or short-term rentals based on current market conditions.
• Property Selection – Your agent will help you identify properties that align with your investment goals. They’ll consider factors like location, property type, and potential for value appreciation to find the best matches for your strategy.
• Rental Income Analysis – Get expert advice on potential rental income for properties you’re considering. Your agent can provide data on local rental rates and occupancy trends to help you estimate your return on investment.
• Appreciation Potential – Learn about areas with strong appreciation potential. Your agent can share historical data and current market trends to help you identify properties likely to increase in value over time.
• Market Trend Insights – Stay informed about local real estate market trends. Your agent will keep you updated on factors like population growth, economic developments, and zoning changes that could impact your investments.

And, of course, help you buy/sell properties.

NAR Settlement

The recent settlement between the National Association of Realtors (NAR) and the U.S. Department of Justice has brought significant changes to the real estate industry. As an investor, it’s crucial to understand how this settlement might affect your process of selecting an investor-friendly agent.

Here are some key points to consider:

• Transparency in Commissions – The settlement requires more transparency in how real estate commissions are structured and disclosed. You’ll likely see more detailed information about agent compensation upfront.
• Negotiable Commissions – While commissions have always been negotiable, the settlement emphasizes this fact. You may find more flexibility in negotiating commission structures with your chosen agent.
• Buyer Agent Agreements – The settlement may lead to an increase in the use of buyer agent agreements. These contracts outline the terms of your relationship with your agent, including compensation.

It’s important to remember some fundamental aspects of agent representation that the settlement has highlighted:

• Agent Representation is Independent of Payment – Who pays the agent does not determine who they represent. An agent can be paid by the seller, the seller’s agent, or the buyer while still representing either party.
• Paperwork Defines Representation – The agreements you sign determine who represents whom and who pays whom. Always read and understand these documents before signing.

As you search for an investor-friendly agent in this post-settlement landscape, focus on finding someone who can clearly explain these changes and how they might affect your investment strategy.

Look for agents who are transparent about their fees and services, and who are willing to discuss how the settlement might impact your working relationship.

Impact on Buyers from NAR Settlement

The recent National Association of Realtors (NAR) settlement has brought significant changes that will impact you as an investor buyer. Understanding these changes is crucial for navigating the new landscape of real estate transactions.

Here’s what you need to know:

• Decreased Cooperative Commissions – You’ll likely see a reduction in the frequency and amounts of cooperative commissions offered by sellers and their agents. This shift may affect how you approach property searches and negotiations.
• Increased Fee Negotiations – Prepare to negotiate fees with your buyer’s agent more actively than in the past. This change gives you more control but also requires a better understanding of agent compensation structures and what agents are providing for their compensation.
• Mandatory Buyer-Agent Agreements – The settlement now requires you to have a written agreement with your agent before touring any properties. This change aims to provide clarity and transparency in your working relationship.
• Specific Compensation Terms – Your agreement with your agent must clearly define their compensation. The terms need to be “objectively ascertainable” and not open-ended. This protects you from unexpected fees but requires careful consideration when drafting the agreement.
• Potential Additional Costs – If a seller’s offered commission is less than what you’ve agreed to pay your agent, you may need to cover the difference. Alternatively, you might choose to look for properties where the seller’s offer aligns with your agreement.
• Earlier Commitment to Agents – Previously, some agents had buyers sign representation agreements only when making an offer. Now, you’ll likely need to commit to an agent much earlier in the process.

These changes underscore the importance of selecting an investor-friendly agent who understands the nuances of the new regulations. Your agent should be able to guide you through these changes, helping you make informed decisions that align with your investment goals.

Remember, while these changes may seem daunting, they also present opportunities for savvy investors.

By understanding the new landscape, you can position yourself to make strategic decisions in your real estate investments.

Impact on Sellers from NAR Settlement

While focusing on selecting an agent when buying a property, it’s helpful to understand how these changes may impact you as an eventual seller too. The NAR settlement brings significant changes to how investor sellers approach property sales and work with real estate agents. Here’s what you need to know:

• Co-op Commissions Still Allowed – You or your seller’s agent can still offer co-op commissions to buyer’s agents, potentially attracting buyers who might struggle to pay their agent’s fees out of pocket.
• Changes in MLS Listings – The Multiple Listing Service (MLS) will no longer have fields or comments for co-op commissions, affecting how you communicate compensation offers to buyer’s agents.
• Alternative Marketing Strategies – You still have options to advertise co-op offers, including sign riders, print ads, and agent websites (with some restrictions).
• Potential Use of Seller Concessions – Some predict an increase in seller concessions as a workaround, allowing buyers to indirectly pay their agent’s fees. Be aware this approach might face challenges with certain loan programs.
• Transparency in Transactions – As a seller, you might need to be more explicit about any compensation you’re offering to buyer’s agents.
• Potential Impact on Buyer Pool – These changes could affect the number and type of buyers interested in your property, as some might be hesitant if unsure about agent compensation.
• Importance of Agent Selection – Choosing an investor-friendly agent who understands these changes is crucial for developing effective selling strategies that comply with the new rules while still attracting qualified buyers.

Agents, Brokers and REALTORS®

When selecting an investor-friendly agent, you’ll encounter three main titles in the real estate industry:

• Real Estate Agent – A licensed professional who can help you buy, sell, or rent properties. They work under a broker and have completed state-required coursework and licensing exams.
• Real Estate Broker – A professional with additional qualifications and experience beyond an agent. Brokers can work independently, manage their own brokerage, and supervise other agents.
• REALTOR® – A real estate agent or broker who is a member of the National Association of REALTORS® (NAR). They adhere to a strict code of ethics and have access to additional resources through their NAR membership.

For simplicity, I’ll use “Agent” throughout to refer to all these roles, only making distinctions when necessary.

It’s worth noting that some markets may have additional variations on agent and broker titles, such as broker-associate.

Additional Variations in Titles

In some real estate markets, you might come across these specialized titles:

• Broker-Associate: A licensed broker who opts to work under another broker’s supervision instead of running an independent operation. They often have more experience than a typical agent but don’t manage their own brokerage.
• Managing Broker: The broker in charge of overseeing agents in a specific office. They’re responsible for high-level decision-making and ensuring compliance with industry regulations.
• Associate Broker: A broker who works under a managing broker but wields more authority than a standard agent. This role often serves as a middle ground between agent and managing broker.

Is One Title Better Than Another?

Titles aren’t as crucial as you might think. What truly matters is an agent’s experience, knowledge, and ability to help you achieve your investment goals.

Don’t choose an agent solely based on whether they’re a broker or REALTOR®. Instead, focus on finding someone who understands investment properties and can deliver results.

The most critical factors are an agent’s track record with real estate investors, their knowledge of the local market, and their grasp of investment strategies. These qualities far outweigh any title.

When selecting an agent to work with, prioritize merit and services offered over fancy titles. Remember, it’s not the label that counts—it’s the expertise and results they bring to the table.

Who Does What in the Real Estate Transaction?

When buying an investment property, it’s important to understand who is responsible for various aspects of the transaction.

While your real estate agent will handle many tasks, other professionals play key roles as well.

Here’s a breakdown of who does what:

• Appraisal of the Property – This is a formal assessment of a property’s value, usually required by lenders to confirm that the property is worth the loan amount. The appraisal is performed by a licensed appraiser.
• Assistance with Showings – Your real estate agent will schedule and coordinate property showings, giving you access to properties listed on the MLS (Multiple Listing Service). This is handled by your real estate agent. For more information see Ultimate Guide to Showings for Real Estate Investors.
• Condition of the Property – Determining the condition of the property is the responsibility of the buyer and the home inspector. Real estate agents provide access to the property, but the actual inspection is done by a professional home inspector or other specialists.
• Contract Acceptance – The buyer and seller negotiate the terms of the purchase contract. Once both parties agree on the terms, they accept the contract. This is determined by the buyer and seller.
• Contract Drafting – The legal drafting of the purchase contract should be handled by an attorney, especially if you need custom terms or protections. This is done by an attorney at law.
• Contract Preparation – Filling in the blanks on standard real estate contracts and forms is a task your real estate agent will typically assist with. Real estate agents prepare the contract but cannot provide legal advice.
• Home Warranty – A home warranty provides coverage for repairs or replacement of key systems and appliances. This is arranged through a home warranty company.
• Improvement Location Certificate (ILC) – An ILC shows the approximate location of improvements on a property, such as buildings and fences, and is often required by lenders. This is done by a licensed surveyor.
• Inspection (Recommended) – A thorough inspection of the property helps identify potential issues like structural problems or needed repairs. This should be done by a professional home inspector.
• Inspector Selection – As the buyer, you have the responsibility of selecting the inspector for the property. Your real estate agent can provide recommendations, but the final choice is yours.
• Legal Advice – Real estate agents are prohibited from giving legal advice. Any legal questions or issues that arise should be directed to an attorney at law.
• Lender Selection – Choosing a lender to finance your property is a decision you will need to make. Your real estate agent may provide a list of recommended lenders, but ultimately, this is the buyer’s decision.
• List of Home Inspectors – Your real estate agent can provide you with a list of qualified home inspectors, but the final decision on who to hire is up to you as the buyer.
• List of Lenders – Real estate agents may offer suggestions for lenders they’ve worked with, but you can also research and select your own. The buyer typically makes the final decision on who to work with.
• Loan Rate/Term Decision – Deciding on the interest rate and loan terms is entirely up to you, based on what you negotiate with the lender. The real estate agent is not involved in this process.
• Market Evaluation – Your real estate agent can provide a comparative market analysis (CMA) to help evaluate the market value of the property. This is an estimate and not the same as an official appraisal.
• Megan’s Law (Sex Offenders) – If you’re concerned about nearby registered sex offenders, it’s up to you to research this information. You can check online registries or consult local law enforcement.
• Methamphetamine – If you suspect that a property has been used to produce methamphetamine, you should hire an industrial hygienist to conduct a test. Real estate agents do not perform these tests.
• Mold Inspection – If mold is a concern, you should hire a mold inspector or environmental professional to conduct an in-depth inspection. Real estate agents do not handle mold inspections.
• Negotiations – Your real estate agent plays a key role in negotiating the terms of the deal, including price, contingencies, and concessions, on your behalf.
• Neighborhood Crime – Information about neighborhood crime rates should be obtained from local police or the sheriff’s department. Real estate agents are not responsible for providing this information.
• New Loan – Securing a loan for your investment property is handled by the bank or mortgage company. Your real estate agent may guide you through the process but is not responsible for obtaining the loan.
• Structural Issues – If structural issues are a concern, it’s best to hire a structural engineer to evaluate the property. Real estate agents do not perform this type of evaluation.
• Survey (Not ILC) – A full property survey, which outlines the exact boundaries of a property, should be done by a licensed surveyor, especially if you need precise information for building or legal purposes.
• Taxes – Consult a certified public accountant (CPA) or tax professional for advice on property taxes or the tax implications of your real estate investment. Real estate agents cannot provide tax advice.
• Termites – A termite inspection should be performed by a licensed termite inspector to determine if the property has been damaged by wood-destroying insects. Real estate agents can help schedule this but do not conduct the inspection themselves.
• Title Examination – The title examination, which ensures that the property’s title is clear and free of liens, is handled by the title company or your attorney. Your real estate agent assists by coordinating the title services.

Working Exclusively with One Agent

Should you work with one agent exclusively? Or, should you try to work with several agents? There are pros and cons to each.

Let’s start with looking at working exclusively with one agent.

Benefits

• Obligation to Find Deals That Match Your Criteria – When you work exclusively with one agent, they’re obligated to actively search for and present deals that meet your specific investment goals. This means you’ll get their full attention on properties that match your criteria, and they shouldn’t hold back any deals for other clients. By law, they must act in your best interest, “promoting the interests of the buyer with the utmost good faith, loyalty, and fidelity.”
• Stronger Advocacy – An agent who knows you’re committed to working with them long-term is likely to advocate more strongly on your behalf. They’ll have a deeper understanding of your needs and can use that to make your offers more compelling. For example, I’ve written strong letters for clients that helped sellers see why our offer stood out, especially for off-market deals that weren’t listed on the MLS.
• Deeper Understanding of Your Investment Needs – As you work together on multiple transactions, your agent will get to know your specific preferences, strategies, and long-term goals. This deeper knowledge allows them to provide more tailored recommendations that align with your investment plans, saving you time and helping you spot opportunities you may not have considered.
• Better Negotiation Power – Committing to one agent often results in better negotiation support. Your agent will prioritize your deals, leveraging their relationship with you to secure better terms and concessions from sellers. They’re more invested in getting you the best possible deal when they know you’re in it for the long haul.
• Efficiency – Working with a single agent streamlines the process. You won’t have to explain your investment criteria multiple times or juggle different agents’ approaches. Your agent will be ready to act quickly when the right deal appears, knowing exactly what you’re looking for.

Downsides

• Limited Market View – While an agent may be highly skilled in certain areas, their network and expertise will have limits. They may not have access to every deal, especially in niche markets or different geographic locations. This could mean missing out on properties that other agents might have access to.
• Missed Opportunities – Relying solely on one agent could result in missed opportunities. Other agents may come across great deals, but without a working relationship, those properties may never be presented to you. If your agent is busy or has other clients, you could lose out on time-sensitive investment opportunities.
• Agent’s Availability – Even with an exclusive relationship, your agent might have a full schedule, limiting their availability when you need quick responses or immediate action on a property. If they’re managing multiple clients, it could slow down your process.
• Expertise Gaps – No agent is an expert in every market or investment strategy. While your agent may excel at finding buy-and-hold rental properties, they might lack knowledge in areas like fix-and-flip projects or short-term rentals. This could narrow the range of properties they suggest to you.

Working with Multiple Agents

When working with multiple real estate agents, it might seem like you’ll get access to more properties, but in most cases, agents will have access to the same listings through the Multiple Listing Service (MLS).

While there may be the occasional off-market property, the benefits of working with multiple agents may not be as significant as you think.

Here’s what to consider:

Benefits

• More Exposure to Listings – Even though most agents pull from the same MLS database, working with multiple agents might occasionally give you access to a property that hasn’t been publicly listed yet. This could be a property they know about through their personal network or a pre-MLS opportunity.
• Diverse Expertise – Each agent has their own niche. One agent might specialize in single-family homes, while another knows the multi-family or commercial market better. By working with different agents, you can benefit from their varied expertise and get insights from different angles.
• Different Networks – Every agent has their own network of sellers, investors, and industry professionals. Working with multiple agents means tapping into different networks, which could help you connect with opportunities you wouldn’t have otherwise found.

Downsides

• Lower Priority – Agents tend to prioritize clients with whom they have an exclusive relationship. If they know you’re working with multiple agents, you might find that they are less responsive or don’t prioritize your needs as much as they would for a client committed to them.
• Conflicting Interests – Some agents may present properties where they represent the seller. This can create a conflict of interest, as their fiduciary duty is to the seller, not you. You’ll need to be careful and ensure the agent is working in your best interest.
• Brokerage Fees – Working with multiple agents can create confusion around fees. If you sign more than one buyer’s representation agreement, you could end up responsible for multiple brokerage fees. Be sure you fully understand the terms of each agreement.
• Strained Relationships – Agents prefer working with clients who are loyal. If they find out you’re working with multiple agents, it may damage the relationship. They may not put in as much effort, knowing that there’s less certainty you’ll close a deal through them.

Brokerage Firm’s Fee

When selecting an investor-friendly real estate agent to help you buy a property, it’s important to understand how they are compensated. The structure of their fees can influence the relationship and the service they provide. Here’s what you need to know about brokerage fees when working with an agent:

Compensation for Agents

Real estate agent compensation is not set by law and is fully negotiable.

The specific fee structure will depend on the agent, the property, and the market. When working with an agent to buy an investment property, it’s important to discuss the fee arrangement upfront to ensure it works for both parties.

The fees you negotiate for buying may be completely different from the fees for selling—higher or lower depending on the services and expertise being provided.

Payment Structures

Agents can be paid in several ways, and the structure you agree on can impact how they prioritize your deals:

• Success Fee – The most common payment structure is a success fee, where the agent is paid when a deal is successfully closed. This applies to both buying and leasing. Since this fee is only paid upon success, the agent is motivated to find deals that meet your criteria and move the transaction to closing.
• Hourly Fee – Some agents charge by the hour, especially when consulting or providing advisory services. This arrangement can make sense if you need specific advice on evaluating deals or the market without committing to a transaction. Hourly fees allow you to pay for time and expertise, rather than a percentage of the deal.
• Retainer – In certain situations, an agent may request a retainer fee to secure their services, particularly if you’re looking for specialized advice or long-term support. The retainer can be credited toward their final commission or treated as a separate fee, depending on the arrangement. Retainers are more common in competitive markets or for high-value transactions.
• Other – In rare cases, agents may offer alternative structures such as flat fees for specific services, like consulting on a particular property or conducting in-depth analysis on potential investments. These structures can offer flexibility if you want to pay for specific expertise without entering into a long-term agreement.

Understanding Common Amounts

While the exact amounts are always negotiable, there are general ranges you may encounter for each structure:

• Success Fee – This fee is typically a percentage of the purchase price or lease amount, but since it is fully negotiable, there’s no standard rate. The important thing is to agree on a percentage or structure that both you and the agent feel is fair. Some very common numbers are 2-4% of the price for the seller’s agent and the same for a buyer’s agent.
• Hourly Fees – Agents who charge by the hour may range from $150 to $300 per hour, depending on the complexity of the work and their level of expertise. This structure is particularly useful when you need advice but aren’t yet committed to a purchase.
• Retainer – A retainer can vary widely depending on the scope of work. It may be a flat fee or calculated as an upfront portion of the total compensation. Retainers are most commonly used when you’re asking the agent to dedicate significant time or resources to finding deals for you.

Commission Splits

Understanding how commissions are split between agents and brokerages can help you when selecting an investor-friendly real estate agent.

While you can negotiate the total commission, you won’t be involved in how that amount is split between the agent and their brokerage. This split affects your agent’s compensation but happens behind the scenes.

Commission Breakdown

Here’s a basic example of how commissions work:

• Total Commission – Let’s assume the total commission is 8%, though this can vary. It’s typically split between the buyer’s agent’s brokerage and the seller’s agent’s brokerage. However, the percentages given to each side don’t have to be equal, and in some cases, it may be a fixed dollar amount or an hourly fee instead.
• Agent and Brokerage Split – After the brokerage gets its share, it splits that amount with the agent. For example, if the buyer’s brokerage receives 4%, the buyer’s agent might keep 2%, with the brokerage retaining the remaining 2%. The seller’s agent may have a completely different arrangement.

Behind the Scenes

You won’t negotiate how much the agent keeps versus the brokerage. This is handled privately between them. The split isn’t always a simple percentage either. Some agents may work on a flat fee, salary, or a performance-based commission structure.

What You Can Negotiate

You can negotiate the overall commission rate—the portion of the sale price or fee allocated for agent services. How it’s divided between the agents and brokerages is managed separately and not typically something you’re involved with.

What if these cost the same?

When choosing an investor-friendly real estate agent, it’s important to realize that the cost for a highly experienced agent is often the same as for a new, less experienced one.

This is because commissions are typically based on the sale price of the property, not the agent’s experience level.

Commissions Can Be Negotiated

While commissions can be negotiated, it’s often difficult to know how much more value you’re getting for the same cost.

Whether you work with an agent who’s been in the business for 20 years or someone just starting out, their fees may be very similar, or even identical.

In some cases, you might find that a brand-new agent and a seasoned veteran both charge the same commission percentage.

Also, you may find a brand-new agent offering a lot more in terms of service and value than a seasoned veteran stuck in their old-school ways.

• Same Cost, Different Value – If both agents cost the same, it’s worth considering the experience level of the agent. A seasoned agent likely has years of market knowledge, negotiation skills, and experience working with investors like you. A new agent may be eager and hardworking, but without the same track record, it can be harder to evaluate their effectiveness.
• Negotiation Power – Experienced agents tend to be better negotiators, which can work in your favor when you’re trying to get the best price or terms on a property. If the commission is the same, getting someone who can save you money through negotiation can be a huge advantage.
• Hard to Know the Difference – Sometimes, it’s tough to know if you’re getting a good deal, especially if you’re unfamiliar with the process. You might find yourself paying the same for an inexperienced agent without realizing you could have had a more seasoned expert for the same price.

Since commissions are often similar for both new and experienced agents, it’s important to evaluate the value you’re getting.

Working With Seller’s Agent as Buyer

Should you consider just going straight to the seller’s agent so you can get the property at a discount and not pay an agent at all?

Maybe. Let’s look at how that might play out.

When you decide to work directly with the seller’s agent, you’re either entering a dual agency situation or being treated as a customer, without representation.

In a dual agency, the agent represents both you and the seller, but this requires full disclosure and neutrality, which can be tricky. The agent is balancing both sides but often has a longer-standing relationship with the seller and might have information from them that can be used against you to the seller’s and seller’s agent’s advantage.

In the more common scenario where the agent continues to represent only the seller, you’re treated as a customer, not a client.

This means the agent’s duty is to the seller. Their goal is to get the best deal for the seller, not necessarily for you.

You might be hoping for a discount because you aren’t bringing your own agent, but the seller’s agent isn’t obligated to help you with negotiations, pricing advice, or anything that’s in your best interest.

Here’s where the confusion around commission comes in.

• The seller may think they’re saving money on the commission by not having to pay a buyer’s agent. They believe that because you didn’t bring an agent, they won’t owe the full commission amount.
• On the other hand, the seller’s agent may think they’re getting both sides of the commission, effectively doubling their payout.
• As the buyer, you may assume that you’re saving money because you didn’t bring your own agent and are hoping to see that reflected as a discount on the purchase price.

So, who really gets the commission?

It depends on what the paperwork says.

In many cases, the commission agreement was already negotiated between the seller and their agent when the property was listed.

If the listing agreement specifies a full commission regardless of whether the buyer has representation, the seller’s agent might keep the entire commission. Sometimes, the seller’s agent may give the seller a break, but that’s not guaranteed.

And if the buyer doesn’t have their own agent, that commission might not lead to any savings for you as the buyer.

In short, just because you aren’t bringing an agent doesn’t mean you’ll automatically get a discount. Be sure to read and understand the paperwork so you know how commissions are handled and you may not know what the seller and seller’s agent paperwork actually says.

Recommendations

When you’re selecting an investor-friendly real estate agent, getting the right recommendations is important.

You want someone who understands real estate investing, not just someone who helps people buy and sell primary residences.

Here’s how you can approach finding the right agent:

• Recommendations from Investors Doing the Strategy You Want to Do – One of the best ways to find an agent is by asking fellow investors, especially those at your local investor club or those who are already doing the type of deals you want to do. They’ll know which agents are familiar with investment strategies like yours.
• Call the Managing Broker at Larger Firms – If you’re considering a bigger firm, it can be helpful to call the managing broker. They know their agents well and can recommend someone who specializes in working with investors. Pay attention to how much time they spend understanding your needs—if they rush through the conversation or don’t seem to listen, that’s a red flag.
• Seek Out Recommendations from People in the Business – While you might usually rely on a real estate agent to help build your dream team, don’t forget that you may already know people in the real estate industry. Ask mortgage brokers, insurance agents (including your own), or title reps for agent recommendations. These professionals work closely with agents and can give you insights into which ones have investment property experience.

When talking to these professionals or brokers, make sure to ask for agents with specific experience in real estate investing. Don’t just ask for a “good” agent—ask for one who has worked with investors and understands strategies like buy-and-hold, fix-and-flip, or cash flow properties. This will help you find an agent who is well-versed in the unique challenges and opportunities investors face.

Designations

Real estate agents can earn various designations by completing additional training and education.

Here are a few examples:

• CRS (Certified Residential Specialist)
• ABR (Accredited Buyer’s Representative)
• SRES (Seniors Real Estate Specialist)
• GRI (Graduate, REALTOR® Institute)
• SFR (Short Sales and Foreclosure Resource)

While these designations sound impressive, they don’t usually mean much to the general public. Most people aren’t familiar with what these titles represent, so they don’t help much when choosing an agent.

Designations show that an agent has taken extra courses, but they don’t necessarily indicate experience with real estate investors. These certifications are more about education than practical experience in the field.

With the exception of Certified Residential Specialist (CRS), most designations shouldn’t be a deciding factor when selecting an agent. The CRS designation requires a certain number of completed transactions, which at least shows some level of experience.

However, the most important factor is still an agent’s direct experience working with real estate investors and understanding investment strategies.

Designations alone won’t guarantee they have the expertise you need as an investor.

Agent Income by Tenure

When selecting an investor-friendly agent, it’s important to consider how experience impacts the level of service they can provide.

Generally, agents with more years in the business have worked more transactions, which often translates into greater experience and better service.

• New Agents (2 Years or Less) – These agents earn a median gross income of $8,800, with a net income of $7,800. They’re still learning, but some new agents can offer exceptional service that goes beyond their tenure. It’s possible to find newer agents who are hungry to prove themselves and go the extra mile for their clients.
• Mid-Level Agents (3 to 5 Years) – Agents in this group have a median gross income of $51,600 and a net income of $34,200. By this point, they’ve handled more transactions and can provide more informed advice, though they’re still building their expertise.
• Experienced Agents (6 to 15 Years) – With a median gross income of $75,000 and a net income of $51,700, these agents have a solid history of transactions. They’ve typically helped many clients achieve their goals and can offer strong advice based on experience.
• Highly Experienced Agents (16 Years or More) – These agents, with a median gross income of $85,000 and a net income of $57,100, have the deepest market knowledge. However, be careful. Some may resist adapting to new strategies or technology, while others stay sharp and continue providing top-level service.

While more years often lead to more experience and better service, that’s not always the case.

Some new agents go above and beyond, and some long-tenured agents may not offer next-level service. Always ask about their experience with investors and how they stay current in the field.

Sales Volume

When selecting an investor-friendly agent, sales volume can be a helpful gauge of their experience and ability to close deals. However, it’s important to dig deeper to understand if their experience aligns with your specific investing goals.

• Look for Agents with Specific Experience – Sales volume is useful, but it’s more important that the agent has experience in the type of investment you’re focused on, whether it’s buy-and-hold, fix-and-flip, or multi-family properties. High sales volume doesn’t always mean they’re the right fit for your strategy.
• Not All Sales Are Posted – IMPORTANT NOTE: Not all agents post their full sales volume publicly. Some deals, especially private or off-market transactions, may not be included in online databases. So, while it’s good to check their sales online, remember this might not show the full picture.
• Check Sales Volume Online – You can check an agent’s sales volume on sites like Zillow or Realtor.com to get a sense of how active they are. Look for patterns that match your needs, such as the types of properties sold, geographic area, and frequency of transactions.

Sales volume can be a helpful starting point, but always combine it with questions about their experience in the specific type of investing you’re focused on. High sales volume alone doesn’t always equal the right experience for you.

Reviews and Testimonials

When choosing an investor-friendly real estate agent, testimonials and online reviews can be a valuable tool. However, it’s important to understand what the reviews represent and how to interpret them in the context of your investment goals.

• Online Reviews Like Zillow – Sites like Zillow and Realtor.com provide reviews from past clients, giving you insight into an agent’s reputation and performance. Look for specific mentions of working with real estate investors or handling investment properties. Reviews that focus on their expertise with investment strategies, market knowledge, and negotiating deals are especially helpful when selecting an agent for your needs.
• Team Reviews vs. Individual Reviews – If an agent is part of a team, be cautious about reviews that are for the team as a whole. Team reviews often reflect the work of multiple agents and support staff, so it may be hard to gauge the individual agent’s performance. If possible, seek out individual reviews to get a clearer sense of the specific agent’s abilities. When working with a team, make sure to confirm which agent will be handling your transactions personally and how involved they’ll be in your deals.

While testimonials can give you a general sense of an agent’s professionalism, remember to look specifically for their experience with investment properties and how they work with real estate investors. Always prioritize real-world results that align with your investment strategy.

Specialization

When selecting an investor-friendly real estate agent, specialization is a key consideration.

An agent’s specialization can significantly impact their ability to help you achieve your investment goals.

Here’s how to use agent specialization to guide your decision:

• Experience and Sales Volume Should Align with Your Investment Focus – The agent you choose should have proven experience in the type of property and strategy you’re focused on. This means their sales volume and expertise should match the specific investment area you’re targeting, whether it’s buy-and-hold, fix-and-flip, or short-term rentals. For example, if you’re interested in residential multi-family properties, working with an agent who primarily deals in single-family homes might not give you the best insight.
• Geographic Specialization Matters – It’s important that the agent has deep knowledge of the geographic area where you’re looking to invest. Real estate markets vary significantly between neighborhoods, and a specialized agent will understand local market trends, rental rates, and appreciation potential in your specific area.
• Same Type of Properties – Make sure the agent regularly works with the same types of properties you’re planning to buy, sell, or lease. An agent specializing in luxury homes may not be the best fit for finding cash-flowing rental properties or affordable multi-family units. The more aligned their past work is with your investment strategy, the better they’ll be able to support you.
• Narrow Focus on Investment Properties – There’s a relatively small group of agents that focus specifically on residential investment properties, such as multi-family units or single-family homes (SFH) used as rentals. These agents are often more attuned to investor needs, such as cash flow analysis, ROI, and managing properties for tenants. When possible, prioritize agents with this narrow focus as they will likely understand your goals better than those who work primarily with traditional homebuyers.

Solo versus Team

When deciding between a solo agent and an agent that’s part of a team, it’s important to consider the pros and cons of each, particularly in the context of real estate investing.

Pros and Cons of Solo Agents

• Pros
  • Personalized Service – A solo agent typically handles everything themselves, giving you more direct communication and control over the process. You’ll likely have the same person guiding you from start to finish, which can lead to a more personal and consistent experience.
  • Accountability – With a solo agent, there’s no passing the buck. They are fully responsible for every aspect of your transaction and decisions.
• Cons
  • Limited Skill Set – It’s rare to find a single agent who excels in both paperwork (detail-oriented tasks) and negotiating (people skills). A solo agent may be strong in one area but lacking in the other.
  • Risk of Unavailability – If your solo agent encounters personal issues, such as illness or family emergencies, your deal could be delayed or impacted. There’s no backup to pick up the slack.

Pros and Cons of Team Agents

• Pros
  • Specialization of Roles – On a team, different people often handle different aspects of the transaction. One person may be great at negotiating deals, while another manages paperwork and contract details. This division of labor can provide a higher level of service overall.
  • Consistency of Service – If one team member is unavailable, there’s often another person to step in, reducing the risk of delays or interruptions.
• Cons
  • Inconsistent Service – With a team, you may not always know who’s handling your transaction at any given time. Team members can change mid-deal, giving you a disjointed experience or inconsistent communication.
  • Less Personal Attention – Some teams operate more like machines, with clients being passed from one person to another. This can make you feel like you’re just another transaction, rather than having a personalized experience.

Additional Considerations

• Balancing Skills – A major benefit of working with a team is that it’s unlikely you’ll find a solo agent who excels in both negotiation and managing contracts. A team allows for specialists to cover these different roles, which can be a real advantage, especially in complex investment deals.
• Changing Team Dynamics – One risk with teams is that they can go through personnel changes that affect your service mid-transaction. Be sure to ask how the team operates and who your main point of contact will be throughout the process.
• Solo Agent Risks – With a solo agent, the downside is that if they face personal issues or get too busy, your deal could be delayed. There’s no safety net in place to ensure continuity if something unexpected happens.

Ultimately, whether you choose a solo agent or a team depends on what you value more—personalized service with more direct control, or a team approach with specialized skills and more coverage.

Value Proposition

When selecting an investor-friendly agent, it’s important to evaluate the value they offer for their fee.

Remember, you’re paying for these services—either directly or indirectly—so make sure the value aligns with your needs as an investor.

Here are key benefits to look for when choosing an agent and brokerage.

General Brokerage Benefits

These benefits are often provided by the agent’s brokerage and can help all clients, including investors.

Keep in mind that you’re paying for these services, even if some are indirectly included in the agent’s commission.

Ask how your agent plans to use these resources to benefit your investment strategy:

• Educational Resources (Books and Classes) – Some brokerages provide real estate investing books and classes. These resources can educate you on strategies, market trends, and financing techniques—valuable for any investor looking to make smarter decisions.
• Professional Office Space for Meetings – If you prefer formal settings to discuss deals, access to professional office space can be a benefit. This is often part of the package when working with an agent, even though you may not see the direct cost.
• Referral Network and Dream Team Building – A well-connected agent can refer you to trusted professionals like lenders, contractors, property managers, and title companies. These referrals save you time and help ensure you’re working with reliable experts. This is another service that you’re indirectly paying for as part of the overall fee.
• High-Quality Marketing Collateral – If you’re selling an investment property, some brokerages provide customizable, high-quality marketing materials to attract buyers and increase property exposure. Marketing costs are often baked into the agent’s commission.
• Streamlined Processes and Checklists – Many brokerages have detailed processes and checklists that help ensure smooth transactions. When your agent follows these systems, it reduces the chance of mistakes or delays, making the process more efficient—another service that’s part of the total fee.
• Name Brand – There is a cost to having a name brand brokerage. Part of the commission is being paid to the company for overhead and marketing of the main brokerage name.

Investor-Specific Services and Offerings

These services are specifically designed for real estate investors, giving you tools and expertise beyond typical transactions.

These tailored offerings provide more direct value for investors, and again, you’re paying for these services if your agent offers them when you work with an investor-friendly agent:

• Investment-Specific Classes – Some agents offer specialized classes focused on real estate investing. These classes help you stay updated on local market trends, financing options, and property analysis, and are included in the overall service you’re paying for.
• Investment Tools (Spreadsheets and Checklists) – Investor-friendly agents often provide useful tools, such as spreadsheets to analyze deals and checklists for due diligence. These tools help you evaluate potential properties more effectively, and they’re part of the agent’s value package.
• Specialized Investment Paperwork – Investment transactions require unique documents, from lease agreements to special documents related to buying investment properties that may not be standardized and generally available. An agent with experience in real estate investing may have these made and available for their clients.
• Comparable Sales and Rental Data – An investor-friendly agent will provide detailed comparable sales and rental data, crucial for evaluating potential returns.
• Market Statistics for Investors – Agents experienced with investors can offer valuable insights through detailed market statistics, such as vacancy rates, appreciation trends, and rental forecasts. These statistics are critical when assessing the long-term viability of an investment and are often part of the fee you pay to work with a specialized agent.

The Value You’re Paying For

Ultimately, selecting an investor-friendly agent is about evaluating who’s offering what, at what price, and what’s most important to you as an investor.

Remember, the services you receive—from educational tools to specialized investment advice—are part of the value you’re paying for when you hire an agent.

Be sure to weigh which offerings will benefit your investment strategy the most and ensure you’re getting the most out of what you’re paying for.

Top Priorities for Real Estate Investors When Choosing an Agent

When selecting an investor-friendly real estate agent, understanding what buyers generally want from agents can help you gauge whether the agent meets those needs—especially when those needs align with investor goals.

Here are some of the top things buyers look for in agents, and how they apply to you as a real estate investor:

• Help Finding the Right Property – For investors, this is more than just locating any home. You need an agent who knows how to find properties that align with your investment goals, whether that’s rental properties with strong cash flow, fix-and-flip opportunities, or multi-family units in appreciating areas.
• Negotiating the Terms of Sale – Real estate investors often need an agent skilled in negotiating terms that can make or break a deal. This can include inspection terms, timelines, and getting seller concessions. An agent with strong negotiation skills can help you maximize the return on your investment.
• Price Negotiation Expertise – As an investor, buying at the right price is critical to maintaining a healthy margin for profit. Your agent should be comfortable negotiating on price, particularly in competitive markets, and understand how to leverage data to get you the best possible deal.
• Help with Paperwork – Investment transactions can have complex paperwork, particularly when financing, inspections, or tenants are involved. You want an agent who understands the unique documents required for investment properties and can manage them efficiently.
• Providing Comparable Sales Data – Investors rely on solid data to assess potential returns. An agent who can provide accurate and up-to-date comparables (both for sales and rental data) will help you make informed decisions on pricing and projected income.
• Determining How Much You Can Afford – For investors, this can translate to understanding your financing options and ensuring your cash flow supports future investments. An agent who understands investor-friendly financing options, such as hard money loans or 1031 exchanges, is valuable.
• Help Finding and Arranging Financing – A good agent for investors has strong relationships with investor-friendly lenders and can help you navigate financing options that work for your strategy, whether that’s traditional loans, private money, or creative financing.

While these points reflect the general needs of homebuyers, they hold special importance for investors.

You’re not just buying a home—you’re investing in an income-producing asset.

Therefore, choosing an agent who understands these aspects will increase your likelihood of success in real estate investing.

Key Benefits Real Estate Agents Offer During the Home Buying Process

When selecting an investor-friendly agent, it’s important to consider the specific benefits they can provide during the home purchase process. These services not only make the process smoother but can significantly impact your investment returns. Here are some key benefits provided by agents and why they matter for investors:

• Helping You Understand the Process – Many buyers, especially first-time investors, benefit from an agent who can clearly explain each step of the purchase process. This ensures you know what to expect and helps avoid costly mistakes, such as missing deadlines or misunderstanding contract terms.
• Pointing Out Unnoticed Features or Faults – An experienced agent can help you identify potential issues or advantages with a property that may not be obvious at first glance. For investors, this can mean catching maintenance problems early or recognizing features that add rental value or appeal to future buyers.
• Negotiating Better Sales Contract Terms – Negotiating favorable terms is critical for investors. This might include securing repair credits, adjusting closing timelines, or including furniture or equipment with the property. A skilled agent will help ensure that the contract works in your favor.
• Providing a Better List of Service Providers – Investor-friendly agents often have a network of trusted professionals, such as inspectors, contractors, and property managers, who can support your investment. Having a reliable team can be a major advantage, saving you time and ensuring the quality of services.
• Improving Your Knowledge of Search Areas – Investors need to know the best areas for rental properties or potential appreciation. An agent familiar with your market can provide insights into neighborhoods that align with your investment goals, whether that’s high cash flow or long-term appreciation.
• Negotiating a Better Price – Getting the right purchase price is vital for making your investment profitable. Investor-friendly agents are skilled at analyzing market data and can negotiate to ensure you’re paying a fair price—or ideally, below market value—to maximize your profit margin.
• Shortening Your Home Search – Investors often need to act fast, especially in competitive markets. A good agent can streamline the search process by filtering properties that match your investment criteria and saving you time by focusing only on viable options.
• Providing a List of Mortgage Lenders – Financing is a crucial part of real estate investing. An agent who regularly works with investors can recommend mortgage lenders familiar with investor needs, whether it’s for a fix-and-flip loan or long-term financing.
• Expanding or Narrowing Your Search Area – Depending on your strategy, an agent may suggest expanding your search to areas you hadn’t considered, or narrowing it to neighborhoods that align with your goals. This flexibility can help you find the best investment opportunities.