This GoodPlace guide is a continuation of sorts from the last guide on how to find a good property deal. The tip in particular on dealing with real estate agents was admittedly rather short, and so I’m deciding to do it justice by writing a full fledged mini-guide on the topic.
An anonymous GoodPlace Digest subscriber emailed me this morning:-
WHERE THE HECK CAN YOU FIND GOOD AGENTS! Well, there’s an easy way, and a hard way.
- Easy Way: Tell me the properties you want through the GoodPlace Dealmatcher, and then let me go hunt for an agent I know and can vouch for.
- Hard Way: Follow the rest of this guide.
The Problem With Property Agents
I remembered two years back when I was in a car ride with this property negotiator named Carlo on the way to see a client, and he remarked to me, “The biggest problem of the (Malaysia) property industry is that we suffer from bad reputation caused by the actions of a minority of bad agents.”
The problem when you meet up with agents is that you don’t know them from Joe. And that’s why I usually recommend to home buyers to deal with agents from well-established, branded agencies, and who are referred to you by someone you know and trust. If you’ve found an agent through an online classifieds site like iProperty or Prop Wall, you’ll need to be extra cautious 1.
No matter what, it’s important to understand these few “truths” when it comes to property agents no matter where you found them:-
- They have their own agenda. They want to make money.
- For (1) to happen, you will need to buy. They only get paid if they close the deal.
Average agents will want to close the deal quickly, and after this is done, chances are that you’ll never see them again. This means that the average agent will try to paint a rosy picture of the property while hiding the deficiencies. These are the people who’ll tell you that a certain “Mont Kiara serviced apartment” is in an upmarket neighbourhood even though in reality it’s next to the infamous Segambut slums and a dirty river. You know these people.
On the other hand, a good agent looks further ahead into the future – if he provides a good service then the customer will return with more deals, and with some referrals to boot. These are agents with integrity and a sense of service which you will need to work with, and from personal experience, these tend to belong to branded or boutique agencies where reputation is well safeguarded. I know I’ll get some hate mail over this, and sorry to piss off some of my negotiator friends from smaller agencies but it’s true.
The Mentor: How To Pick A Kickass Agent
When I talked to The Mentor last Saturday I asked him about screening for good agents, and his method was remarkably simple.
Easy. I ask them, “What’s bad about this property?” Nine times out of ten I get the usual, “Nothing much. This property is perfect!”. Nothing is perfect. My best agents know what I am looking for, and they help me look at a property with a critical eye instead of just wanting to sell me.The Mentor
He then provided me with a list of questions and the “correct” answers that he used to screen agents:-
|Question||Good Answer||Bad Answer|
|Why is this a good buy?||It's good because... however, also watch out for...||It's good because ... (only positive answers)|
|Is there anything bad about this property?||Yes, watch out for...||It's perfect. Nothing bad at all.|
|Can you show me a property in this neighbourhood you just sold?||Yes (or no, I have not sold a property here).||I sold a unit here just last week, but I can't show you because...|
When I was learning the trade I used to follow The Mentor while he called up random agents he found in the classifieds sections of newspapers, and he would purposely ask to look at “dud” properties – so that he can gauge the honesty of the agents that he dealt with.
You don’t have to go to that extreme obviously, but this shows that it pays to do the due diligence – if you are in this for the long term, then having a team of good agents bringing deals to you is the biggest competitive advantage that you can ever have in the real estate investment game.
- It’s not the fault of the property sites of course, but the openness of the platform means that anyone can join and post anything with minimal moderation. ↩