Bread & Butter Properties

Bread & Butter Properties
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Tuesday, August 3, 2010

How to find a good property agent

The property agent is probably one of the most important members in your team. Finding the right agent can help leverage your time considerably. So, take the time to go find them.

The things that are important in the process of investing in rental properties are:
- finding the right property,
- negotiating and making an offer,
- arranging financing, and
- rental (or property management).

Out of these, finding the right property, and negotiating (plus making an offer) probably takes up the most time. So, leveraging on property agents to help you is a smart move; although you have to pay commission but I believe it's probably worth it, if you get the right service.

What I look out for in an agent
He/she must:
• Have integrity – this is non-negotiable,
• Be competent - knows the area you are looking to buy well,
• Have the experience to negotiate successfully - try and avoid newbies, and look for someone who's been in the profession for at least a few years,
• Be able to deal with people (i.e. have people skill) - very often they have to deal with difficult owners, and if they are not able to manage the negotiations, it may blow the deal for you.
Before engaging them, you need to ask the right questions, for example:
• How long have they been doing this?
• Are they licensed?
• How long have they been with the property agency?
• You can call the agency’s principal and run a check on the particular agent if you are unsure.
Another good way to find good agents, apart from asking for referrals from friends or people who also buy/sell properties is to take a walk around the area. Look out for the “for sale/let” signs; the agent that “farms” the area would normally have the most listings. Take the phone number down, and the property details and give them a call to find out more. Keep a listing of the agents in the area as you will probably come across them again if you are actively looking at property in the area. Sometimes they also use more than one mobile phone number, so its important to keep track of that too.

But, one thing to watch out for is that sometimes the agents who display the signs don't actually have listing. Some will leave the signs up after the property is sold, to generate more the leads. Normally you can quickly figure them out by asking a few simple questions, and asking them to view the specific property advertised.

Negotiate the commission but pay them
The agents earn a commission for their services; and this is set by the Act that regulates property agents. For property below RM100,000, it is 3% of the purchase price. But, this is usually negotiable especially if you are going to be buying many properties – I normally agree up front on a flat fee of 2%. It’s important to pay agents well; a good agent takes care of a lot of related matters for you in the process, from helping to negotiate with the owner, checking on documents like titles are in order, helping to settle the maintenance fees, and others. Sometimes the really good agents will even go as far as making sure the property is in good order before the final handover is done, and that can save you a lot of work. Thus, a good agent is certainly worth its weight in gold.


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