|Choosing an Agent
In most cases a buyer, or seller, end up being represented by an agent and his company by default. These relationships are often pure happenstance and initiated through a cold call or by the client answering an ad in the newspaper, or other media form. Under such circumstances the opportunity to properly evaluate the quality and experience of the agent is not given any thought because of time constraints or transactional pressures. However, if a buyer or seller were to establish the criteria by which their personal representative could be chosen, these could be important issues to consider.
- Has multiple relationships with lenders, escrow officers, attorneys, accountants, contractors, management companies, trade associations and other brokers. Most obstacles can be overcome by an agent with years in the investment property brokerage business. Residential brokerage experience is of no use to the investment property buyer or seller. These two facets of the real estate business are as different as night from day. Litton/Fuller Group specializes only in income property brokerage.
- Is the agent using the type of contract published by the State or an outside publishing company? Most of these have catch-all clauses that may not suit your personal requirements. The drafting of the agreements is the most important initial step in the process of developing a successful transaction. Stock phrases and boilerplate language can be extremely dangerous to such a transaction under certain circumstances. Litton/Fuller Group has copy written contracts that allow for the client's specific requirements.
- There are several ways of structuring a tax-deferred exchange the choosing of which depends on your circumstances. Litton/Fuller Group's representatives have each closed scores of each type of transaction.
- Discovering latent defects in property could be the most important skill your agent may need. A residential real estate agent is guided through the process of latent defect discovery through the use of State of California disclosure forms. These are required by law to be completed by a seller and delivered to a buyer prior to close of escrow. However, these laws are required only if the property being purchased is less that 5 rental units. The law makes the assumption that buyers who are acquiring larger properties are "sophisticated " buyers who do not need this kind of written document protection. Litton/Fuller group has copy written disclosure documents that will be signed by the seller and delivered to the buyer prior to the removal of contingencies. The availability of such documentation is almost completely nonexistent with most commercial real estate firms. Specialization.
Ability to Make Distinctions
What makes a Cardiologist so necessary to a heart patient is his ability to make fine Distinctions unavailable to family practioners The same is true when dealing with a real estate income property specialist. Such a specialist will be of great value to a client because of his ability to "see" facets of a particular property not easily discernable. After having closed multiple transactions an experienced agents can develop a "sixth sense" regarding:
- Physical condition of the property
- Sellers motivation
- Potential problems with the tenant profile
- The problems a particular buyer may experience with a particular property
- Potential political problems in the area when a particular property is located
- Reliability of the marketing information
- Applicability of comparable rents and sales
- Evaluation of alternative properties under consideration
- Evaluation of the probability of deliverability of a particular property
- Which strategies have the best chance of closing the desired transaction.
These are only some of the considerations a client should have before putting him or herself into the hands of an agent. The next income property transaction you enter into can have dramatic affects on your financial future. Remember, most agents learn quickly how to act and talk like an expert. A serious buyer or seller deserves a truly really effective and experienced agent, not just one who looks and talks the part. Traps for buyers or sellers.