Team with the Right Realtor to Fill Your Short Sale Pipeline

Thursday, February 11th, 2010 | Uncategorized

Building a great team is one of the best things you can do for your real estate investing business. Make sure one of the members of your team is a realtor.

First, a quick distinction between a real estate agent and a realtor. Of the two groups, real estate agents have the least amount of training in their field. Realtors have undergone additional training to earn the designation of ‘Realtor,” and are registered with one or more regulatory agencies where they work. There are many realtors to choose from in any market, the key is finding one that has some short sale experience and is investor-friendly, because not all of them are!

Working with a realtor helps you, as a real estate investor, in two ways:

1. As a source of leads for problem properties, including short sales.
2. As a source for buyers.

By building relationships with realtors, you’re creating the possibility that your pipeline of deals will be filled with enthusiastic individuals who will help you find short sales and be ready to work as part of your team. This is an important point – with realtors, it is a team effort. You need to make sure they understand that you will include them in the process, but you will handle the specifics of the short sale – the lender negotiations (including possibly avoiding deficiency judgments), the BPO, and the short sale paperwork package, including the option contract. You need them to continue to do what they do best, which is marketing and selling homes. You’ll also boost their confidence in you when you remind them that you’ve already secured an arms-length buyer for the property – you!

If you can find a realtor that understands that traditional home-selling rules don’t apply in a short sale, then you’ll have a stronger partnership. The goal is to get the property sold, not necessarily to find the highest offer. You and your realtor represent a blend of skills, experience and understanding, that together can help homeowners in need.

Keep the lines of communication open with your realtor. This way they can keep the buyer and seller informed, which will make everyone more comfortable with the process and confident in your skills.

In today’s housing market, completing a successful short sale transaction is an art and skill that most realtors don’t have. Your involvement gives them a chance to get paid a commission, as if the market were a normal market. They will still get their money, and you handle all the details to make the short sale happen. The trick is to give the realtor all the information they need to know about teaming up with you, including:

• Quickly selling real estate properties that have no equity.
• Finding new real estate investment opportunities in a growing market with little or no competition.
• Earning full commission on sales that wouldn’t happen without a short sale.
• Offering a new way to help people in financial difficulty.
• Securing strong testimonials or referrals from people who could not otherwise find help.

Approaching a realtor can be intimidating, particularly for the novice investor. But working directly with realtors can mean huge payoffs, and it’s less expensive than a direct marketing campaign. That’s not to say it’s not a lot of work, because it is. It requires more effort to approach a realtor than to do a direct marketing campaign, but today, 75% of properties in default are listed with a realtor. So your own marketing efforts may get you access to some of the remaining 25%, but why not go after the big 75%?

Be sure to check out SREC’s Realtor Renaissance for lots more details on how working with the right realtor can enhance your real estate investing business. We’ve also developed a Realtor Referral PowerPoint presentation designed to take the guess work out of approaching realtors, to show how mutually beneficial teaming up with you can be. Sign up for our free Silver Membership today!

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