A few weeks ago, I had coffee with a new agent here in our area. She said she was having trouble getting investors to stay loyal to her. She asked me if it was best to have everyone sign an exclusive representation agreement. Here was my reply:
“It won’t hurt, but it’s not your best option.”
She asked why and I went on to explain that its far better to make investors (or any other client) WANT to work with you. She asked how this was possible when there were many agents in our area with more experience. So I asked her the million dollar question:
What value do you bring to the table?
Let’s say I’m a prospective client for you and I’m thinking about investing, how can you make my investment more profitable? In other words, why should I use you as my agent vs. any other agent?
This really is a vital question to ponder, because it gets you to think about adding value to your clients. If you can’t answer this question, you aren’t adding value and are just another agent – a commodity. You can be replaced (and probably will be) with the blink of an eye by someone who IS adding value. I went on to ask a few more questions to help her think about adding value for investors:
1. Do you have any experience renovating properties & reselling them for profit?
2. Do you have any experience renting properties?
3. Do you have a list of investors that might be interested in partnering on good deals?
4. Do you have access to lenders that will provide more creative financing on good deals?
5. Do you have any way to find great investment properties that other agents might not have access to or might be missing?
6. Do you have any prospective tenants that you can leverage to rent properties before closing?
7. Do you have a rolodex of “great” contractors that do fast work inexpensively?
8. Are you able to manage properties on behalf of your investors allowing them to become passive investors?
9. Do you have a way to get higher monthly rents for your investors?
10. Are you able to help your investors protect themselves from loss (hedge their investment?)
11. If you don’t provide management, do you help your clients find tenants and coach them on how to manage the property?
You might notice that these questions swirl around a few themes that are very important to investors:
* Increasing their income/revenue
* Reducing their expenses
* Removing aggravation & hassle from the process
* Giving them the ability to do deals they wouldn’t otherwise be able to do
* Protect them from loss
When you’re able to do these things for your clients, you become IRREPLACEABLE.
The next step in this process is to go through each question above and figure out how you might be able to offer a solution. For example, if you have an investor that is looking to buy a long-term rental property in a specific area. Could you run a “For Rent” advertisement for a home you’ve found for them as a test to see how many calls come in and what the highest rental rate might be? If the home is vacant, maybe you could actually get permission to show this home to the callers and see if they like it. You can tell the prospective tenants that the home wouldn’t be available for a month to give your investor time to close on the property.
If someone liked the home and wanted to rent it at an attractive monthly rent, do you think your investor might be more inclined to buy the property? Of course they would and that’s the point. When you set your clients up to win, you win. In this scenario you would have reduced the investors risk, because you found the tenant in advance. The investor wouldn’t have a vacant home at closing. They won’t have to advertise the home. And you’ve eliminated the hassle of showing the home, too. You’ve made yourself irreplaceable because other agents wouldn’t do this for their clients.
I can hear what you might be thinking.. “What if I do this for my investor and they don’t buy because they don’t like the property?” Well, do you think another investor might be interested in this deal? I certainly do. Or maybe you show other homes listed for sale to the prospective tenant and find another one they might be interested in renting. This second home could be purchased by your investor.
Hopefully you can see that you don’t need a lot of experience to add value. You do need to put yourself in your prospective clients shoes and “see” things as they do. You do have to make ADDING VALUE your number one priority.