“I can’t find any good deals. I’ve heard that I shouldn’t bother with the Multiple Listing Service (MLS) because Realtors take all the good deals anyways. Is that true?”
Robert from Ottawa, Ontario
While it’s true there are some Realtors that purchase properties for their own portfolios, the vast majority of Realtors are focused mainly on making a living for themselves. Some of them don’t even own their own homes!
Real estate agents are not trained as investors, and although they may recognize a good deal when they see one, they may not be in a financial position to purchase the deal themselves. They still require a down payment and a mortgage just like everyone else out there.
In fact, because real estate agents are self-employed, it may be more challenging for them to qualify for financing with traditional lenders (such as the big 5 banks).
What do agents do when they see a good deal and can’t take advantage of it? They call their ‘short list’ of investor clients who might be interested in that type of property.
How do you get on their ‘short list’? You build a good relationship with them and then you ASK. And when a realtor sends you a good deal that meets your criteria, you make an offer, waive your conditions (if no problems are found) and (most importantly) you close on the deal.
Real estate agents usually get paid when you close on a property. No closing, no paycheque! So you can very quickly become a good friend of a realtor if you close on a deal, especially if they know you will buy more deals from them.
If another great deal comes across their desk, who do you think they will call first?
- Investor A who has no property criteria and wasted 2 weeks of their time
- Investor B who backed out of a deal at the last minute
- Investor C (YOU) who has pre-defined property criteria, financing and investors ready, and has already closed on previous deal
They will absolutely call you first with the deal. Why would they waste time with the other two investors?
Also, keep in mind that many great deals never even make it onto the MLS. How do you find out about these great deals if they aren’t public knowledge? Again, you have to get on an agent’s ‘short list’.
To summarize, you need to…
- Build a relationship with a real estate agent
- Know your property criteria and share them with your agent
- Get pre-approval for financing in place
- Get down payment funds or investors ready in advance
- Be prepared to close quickly
- Ask to be on their ‘short list’ (someone they call first)
- Close on deals that meet your criteria
Follow these tips, and you will very soon have Realtors bringing the best deals direct to you, instead of you having to search the MLS yourself.
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