How to Find a Real Estate Agent and Why Referrals Are Best

It’s not hard to find a real estate agent when you need to sell your house or you are in the market to purchase a home. Finding the best agent is an entirely different thing and is usually difficult to do. Allow us to explain how to find a real estate agent through the use of firms that specialize in just that… referring agents.

As the old saying goes “it takes one to know one” and finding the best agent is easily accomplished when you simply have a good agent do it for you. It’s a free service to you and holds enormous value. When you are selling property you want the best service for that expensive commission you pay and having professionals picking the professionals saves a lot of time searching and interviewing. A good real estate firm that offers to refer you a choice of agents to choose from, even when they are not of the same firm, means you are getting to cherry pick the cherry picked.

Since a referral agency receives payment as a small percentage of the referred agent’s commission fee received at the closing, the service is of no cost to you as a seller, buyer, tenant or landlord. When you are a buyer the referral service and the representation by the referred agent is typically of no cost to you, the referral agent is paid a percentage of what the listing agent receives from the seller when the transaction closes. Taking advantage of an agent referral firm is how to find a real estate agent and the simplest way to go to get the best representation for your dollar. The referring firm wants you in the best hands possible, those that are most capable of bringing you a hassle free, smooth transaction, which starts with a good agent. Also look for one that screens potential agents by their current availability because sometimes a great agent can turn bad when they never have time to work on your transaction.

Buying, selling or leasing real estate should always be done with the oversight of a qualified, carefully selected agent, closed by a neutral third-party attorney and reviewed by a trusted accountant, if you are transacting commercial or investment property. When you are planning the purchase, sale or leasing of real estate make sure to contact a real estate firm that offers to refer you the best agent for your needs and location, not just he one available at the time in their firm.

The Hidden Costs of Maintaining Investment Real Estate

When considering real estate investment, many people fail to consider the hidden costs of maintaining the property. They happily calculate the initial outlay of capital and then start dreaming of the cash flow it will generate. The problem is that these investors fail to consider all of the financial costs as well as monthly bills, regular maintenance, emergency repairs or upgrades, and the risks inherent in vacancies. Without proper planning, an investor could end up in serious financial trouble.

Financial Costs

The upfront costs of a real estate investment are easily recognized in terms of the down payment and the interest on any mortgage necessary to secure the property. Many investors also understand that if they pay down the mortgage faster, they will save money in interest. However, investors also need to take into consideration insurance requirements and property taxes. Insurance may be a part of the mortgage and property taxes need to be paid semi-annually.

Monthly Fees

Then there are the monthly fees associated with running a real estate investment. These include such things as fees for sewer, water, and trash removal. Some properties may have additional costs such as electric or gas if the building is serviced as a whole rather than individual units. However, most owners can avoid these costs by installing individual furnaces in the units so that the tenant becomes responsible. Another possible expense could be for a property management service if the owner wishes to be hands off.

Regular Maintenance

In addition to monthly fees, real estate investment often requires an outlay of cash for regular maintenance. These can include such things as painting, grounds keeping, or minor repairs such as fixing leaking faucets. Owners need to budget for these expected expenses by setting aside anywhere from 5 to 10 percent of the net monthly income. In addition, the age of the property should be taken into consideration as older properties may need more maintenance.

Emergency Repairs & Upgrades

As with regular maintenance, older properties may be at an increased risk of needing emergency repairs or larger upgrades such as a replacement furnace or a new roof. The best way to handle this is to establish a rainy day fund to be used only for those large expenses. This fund, plus routine inspections, can help prevent an owner from getting caught off guard. Also consider if these are jobs that will need to be hired out or if an upgrade will raise property taxes too much. An upgrade is not always worth the investment it requires.

Vacancy Rates

Certainly, investors count on the cash flow generated by the real estate investment to meet their monthly expenses. Unfortunately, vacancies can turn a solid investment into a money pit. As a result, owners must factor that risk into their projected budget and must charge rents to compensate for the missing income. Consider such factors as the occupancy history and the stability of the renters. For example, vacation rentals may be less stable, while properties in good school districts will have fewer issues.

As a result, real estate investment is not a simple matter of paying for the property and then sitting back and raking in the profits. Owners must take into account hidden financial costs and must budget for such things as routine bills, regular maintenance and emergency repairs and upgrades. They must also make sure there is an adequate cushion to cover for vacancies that will occur. However, with a little careful planning, owners can still make a tidy profit on their investment.