What Your Broker Should Have Told You
Seattle broker agent Seattle real estate agent Seattle real estate broker Seattle real estate investor working with a Seattle broker
At the last Sunday tour of homes I did for real estate investors in March, I focused on the information that is available to real estate brokers to help you the investor in analyzing and identifying deals. Typically, a broker hands their client a “client detail” report on qualified listings from the Northwest Multiple Listing Service (NWMLS). But the broker has access to much more information in the “agent detail” reports and through tools that are available from the NWMLS.
Let’s talk about the information that a good buyer’s agent should be able to provide for an investor.
First, a savvy broker should be able to identify markets that appeal to an investor by analyzing sales transactions in the recent past. As a broker (and an investor!), I like to look for areas, neighborhoods or zip codes that have had the most number of sales transactions in the past 30-60 days in the median price range that most investors seek. I call these the “hot” markets for investors. While I specialize in Seattle, I can research this data for any area of Washington serviced by the NWMLS.
The search may be further narrowed to focus on certain other features that are important to an investor, such as sales of three-bedroom homes, for example.
The agent detail report contains information on the listing broker, which is not available in the client report. This might be because some clients may believe they get a better deal allowing the listing broker to represent both sides of the transaction and earn a higher commission. In fact, this is viewed as a conflict of interest by many brokerages, and they do not allow their brokers to serve as “dual agents.” Despite his seventeen years in the real estate profession as an appraiser, a friend of mine (who shall remain nameless to protect his gullibility) forgot this problem when he purchased his small apartment building a few years ago in Leschi. The listing broker was only too happy to goad him into paying full price, as his prime responsibility was getting top dollar for his client, the seller. To this day, my friend regrets his decision not to use a buyer’s agent to represent his interests at the negotiating table.
I like to look at who has the listing, because I want to see how knowledgeable they may be about working with investors, or open to creative financing options.
The agent detail report also lists the number of days the property has been listed on the market, and the city and state address of the seller. Both are important pieces of information to determine the level of seller motivation.
I also look up tax information, readily available on Realist through the NWMLS website. I am looking for zoning to see if the lot can be sub-divided or developed in the future. I look at tax-assessed value, and Realist even provides an estimated range of values, based on both County tax information and on recent sales data reported to the NWMLS. This helps clients formulate an offer based on comparable sales information. What is the property REALLY worth?
The range of values reported by Realist may help an investor offer a reasonable price at the low-end of the range, knowing that the fixed-up After-Repair-Value may be somewhere around the high end of the range.
Realist contains information on the most recent sales history of the property, the date and amount at which it last sold. It notes whether the transaction was a quit claim (divorce or probate), a bargain and sale deed (foreclosure), or a regular warranty deed.
Realist also tells me the most recent mortgage history of the property. Here is where I can tell how many mortgages might exist on a property, how much principal is owed, and whether they are owned free and clear. An investor would then know whether to make a “subject to” offer, pursue a short sale, or ask for seller financing.
Many brokers are unaware of the real information needs of an investor and do not always make this information available. Now, you as the investor client, know what information you might expect your broker to provide. And if you do not have a real estate license, be sure you get an investor-savvy broker as part of your real estate investment team!
I welcome your feedback on this blog. Please let me know what topics you might like to see addressed in future articles for the novice real estate investor. I can be reached at HomeLandInvestment@gmail.com.
Wendy Ceccherelli is the volunteer membership coordinator for REAPS. She has been a full-time real estate investor since 2006, and is the designated real estate broker for Home Land Investment Properties, Inc. Prior to her career in real estate, she spent twenty-five years as a government arts funder. More information on real estate topics may be found on her website at www.HomeLandSeattle.com