THE BIG PICTURE
INVESTING STRATEGIES
The Customer is Always Right There YOUR RELATIONSHIP WITH YOUR CLIENTS IS OF UTMOST IMPORTANCE, SO SET THE RIGHT TONE FROM THE START.
by Kelly Edwards and Chris Edwards
T
he customer relationship is vital to the success of any business. As real estate investors, we operate a unique type of business, but that doesn’t mean the value of relationships is any less important. The customer (or client) relationship, for the investor, has changed significantly over the last two decades. In years past, the “real estate investor” was typically a landlord who was afforded a great deal of flexibility in dealing with matters of tenant evictions, buying and selling property, etc. Today’s savvy real estate investor must view this business through a different lens. Laws are generally favorable to con- sumers, and we’re often one misstep away from a lawsuit in what is a very litigious society. Investors are expected to handle with care any business relationship in today’s complex real estate environment. Let’s take a look at the four areas where the “relationship” plays a crucial role for the real estate investor. SELLERS For personal real estate investors, especially property flippers, sellers generally set the table for the rest of your business. Sellers of property are often uncertain about what the final outcome of the transaction may be, so
it’s essential to hold these relationships in the highest regard. As such, investors should be prepared to guide, educate and clarify multiple questions and scenarios for the seller during the sales negotiation. We find it’s best to gain perspective by viewing the proposed transaction from the seller’s position. It’s wise to always keep the relationship personable but professional. BUYERS So you finally have a property fully renovated and ready to sell? It’s no doubt an exciting time for you and your team. To keep emotions and risk in check, we prefer to define our sales strategy well in advance of placing the property on the market. Here are a couple of other suggestions to help keep your business and profits in line when dealing with the buyer relationship. USING A LICENSED SALES PROFESSIONAL— As an investor, if you are not a licensed real estate agent, we strongly suggest you find and work with a good one. Unless you have many years of experience under your belt handling For Sale By Owner (FSBO) transactions, there’s simply no debate that a skilled agent will save time and put
money in your pocket from the initial offer to contract closing. The back-and- forth negotiation process is often too time-consuming and complex for the newbie or do-it-yourself investor (seller) to navigate. Don’t make the mistake— simply hire a licensed agent. FOR SALE BY OWNER— There are a few scenarios where using a licensed listing agent isn’t the best option. For the very experienced real estate investor, dealing directly with the buyer and saving the 2 percent to 4 percent sales commission can be an attractive alternative. We sug- gest placing a lockbox on the property and allowing the potential buyer or buy- er’s agent to view the property them- selves as long as you are comfortable with other parties visiting the property without your being present. Another option is group showings, which can be a real time-saver if you choose to show the property yourself. Group showings of properties for sale—just as with rentals—create a friendly atmo- sphere of competition, which often may increase both interest and offer pricing. The greatest challenge for investors
30 | think realty magazine | may :: june 2016
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