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 Step #5 - Deal With The BestThe purchase of real estate is the largest financial transaction most people ever make. It's interesting, then, to see how naïve people act with tens of thousands of dollars, hundreds of thousands of dollars, at stake. They don't prepare. They don't study. They see an ad or a sign and blindly put themselves in the hands of an agent who answers the phone. This agent decides what type of housing they can afford and chooses the properties they will inspect. The standard real estate commission is six percent. If you purchase a $200,000 property, the commission is $12,000. The seller pays the commission, but, of course, it's really the buyer who pays through a higher price. Are you going to pay someone $12,000 for a cab ride between their office and a house? Unfortunately, this is the extent of service many people receive! A professional real estate agent who understands your financial situation and is enthusiastic about helping you attain your investment goals is a very valuable asset. Remember, unless you are dealing with a Buyer's Agent, you are dealing with a Seller's Agent. This means that in theory, the agent is working for the seller's best interest and not yours. Be sure to clarify your relationship with any agent. Is the agent working for your best interest or the seller's best interest? Cynically, you might add or is the agent working for his or her own best interest! In other words, do you get the impression that this agent will say anything to anyone to close the deal and grab a check?
All real estate agents and brokers are not created equal. Laws vary from state to state regarding the education and experience a person must have to become licensed. In many states, the laws regarding who can sell real estate are very lax. Unless you are a disciplined person, real estate brokerage can be a challenging occupation. The time wasting temptations are everywhere. As an agent, you can start work at nine or ten or twelve. You can leave at three or five or six. You can send out a hundred post cards to solicit new business, or you can do a crossword puzzle or read a magazine or surf the Internet. You can go to lunch with an important client or with your girlfriend. You can get a haircut. You can take a nice long walk. You can gossip and complain about the economy. When your job is being a real estate agent, you have the freedom to waste a lot of time.  The best agents are highly disciplined and organized, borne of self-discipline and self-organization. The best agents are optimistic, as well as pragmatic. They are like us. The better agents find a way. The poorer agents insist that there is no way. The better agents find what you want. The poorer agents can't see beyond what they want. The better agents know that some clients will buy and some won't. The poorer agents need money, and get angry with clients who don't buy. The poorer agents act as if the deal is done when an offer is accepted. In their mind, they have that commission spent already. So, when any glitches develop, as they usually do, the poorer agents get angry and often hostile to all parties, since to them it seems that someone is trying to take back something that they, the poorer agents, have already earned. The poorer agent acts angry at you, "The bank says that they need four years of back taxes from you and that they need it in two hours. You'd better leave work right now and get those papers or you'll be screwing up this whole deal." The better agent doesn't act like the deal is done until papers are passed. The passing of papers refers to when the deal is closed and title is passed. 
Here is an easy test. The better agents are listeners. They are listening to you. You are doing most of the talking. Better agents, whether they know it or not, are following the Action Principles®. They are focused on your needs. The poorer agents are more interested in talking about themselves and their day care problems, their car problems, the bad economy and just about every other mundane aspect of their own lives. The poorer agents want you to listen to them and to sympathize with their concerns. Do you really want to spend hours in a car with this person?Here's how a typical real estate office works. A principal owns the business and pays the rent, office expenses and the advertising bills. In exchange for no overhead expenses, the agent works on a strict commission basis, usually 50/50. In other words, that $12,000 commission is split with $6,000 to the principal and $6,000 to the agent or agents involved. It follows that the more agents a principal has on staff, the more money the principal stands to make. The principal only has to pay an agent who is producing. This is why almost anyone with a real estate license and a car can get a job. As you study your newspaper's real estate section, you'll invariably find ads stating AGENTS WANTED.
If you just pick up the phone or walk into an office cold turkey, you could end up with a turkey as your agent. Real estate offices work on a rotating up system. One agent will be up for the next call or up for the next walk-in. As far as the office is concerned, you become the client, the property, of that up agent. If the up agent happens to be someone who knows nothing about real estate, well, that's your problem. Enjoy your twelve thousand dollar cab ride and many hours of frustration, cross your fingers and put a rabbit's foot in your pocket. When you are a real estate agent, you don't get a paycheck every Friday. Your money comes in large, sporadic chunks. An agent making $28,000 a year probably only sells six houses a year and makes the extra money from listing fees or rentals. This agent may sell two houses one month and then spend four months waiting for the next sale.  This is worth repeating. Agents have a lot of free time on their hands. Many spend that time shuffling client cards, surfing the net, reading newspapers, doing crossword puzzles and running personal errands. Without adherence to a strict personal regime, real estate can be a tedious and depressing profession. You've got to be tough and disciplined to make a six-figure income in this business. It can be done. It can even be done in forty hours per week but ... Take an average real estate office with a sales staff of eight people. Four agents are making little or nothing. Three agents are making a decent living of $28,000 to $50,000 a year. One agent is making over $200,000 a year. What separates the six-figure income salesperson from the people making nothing? The answer is not longer hours. The answer is spending quality time. The characteristics of a winner are preparation, specialization, organization, intellect and effort. These same self-confident qualities, you, as an Action Principles® Champion will bring to your goals. If you want to be a winner, associate with winners.
Agents who are making $200,000 are selling twenty or thirty houses a year. Since they're selling property all the time, they're on top of the current financing situation. They know their buyers. They know their sellers. They know their listings. They know how to negotiate. They know how to be creative and imaginative. They know their job, which is to bring buyer and seller together and make the transaction work. These are the agents you associate with, the winners. Winning agents know how to structure no money down deals because they've actually sold property with no money down. They know from experience about wrap-around, variable rate, and rollover and shared appreciation mortgages. They've dealt with tax-free exchanges and installment sales. They know the investors, the builders, the developers, the remodeling contractors, the bankers, the lawyers and the accountants in your specific area. Dealing with the best isn't going to cost you more money. In fact, it will probably cost you less. How hard is it going to be to find the best agent? Ask around. Do your research. Often, you have to find these agents. You may have to persue and solicit them. Find out who is the top agent in your specific area and take him or her to breakfast or lunch. It will be a few dollars well spent. Even if you aren't a perfect fit at this time, their recommendations will be worth hearing.  After looking at the real estate section in your local paper, the free real estate magazines or your personal observation, you have the names of the larger real estate offices in your area. Let's say one office is called Fred Jones Real Estate. You want to talk to Fred Jones. If the principal's name is not in the firm's title, for instance, Horizon Realty, you have to ask for the principal or owner's name when you call. You call the office and ask to speak with Mr. Fred Jones. If Jones isn't in, leave a message on his voice mail or call again. This call has a single purpose: to arrange a sit down meeting with Fred Jones to outline your plans. Before your appointment with Jones, organize all your notes and downloads and printouts into a folder. When you sit down with Jones, open the folder and spread the contents around a little. Jones doesn't have to see anything. He just has to be given an impression. The impression is that you are neither a random call from an ad, nor a Sunday browser. You are a prepared, organized investor. Be confident. You are on a short path to prosperity. Any agent who wins your confidence and your business should feel very fortunate. This is a win-win-win situation for you and Jones and Nardo. They get your business. You get their experience, expertise and contacts. 
Explain to Jones that you have investigated the real estate investment possibilities in your specific area and are planning over the next few years to purchase several properties. You want to deal with a professional agent who can help you implement your investment program. "Mr. Jones, who is the number one salesperson in your organization?" You ask a direct question and you'll get a direct answer. Jones replies, "Don Nardo works for me, and he's about the best in the business". Let Jones sell you on the virtues of Don Nardo. "Don Nardo sells more property than anyone else in this area. Don Nardo knows everyone. Don Nardo is a past president of the Agent's Institute. Don Nardo is this and Don Nardo is that."Of course, even at this point, from your research and talking with other investors, you may already know that Nardo is a top agent. One of two things will happen. Either Fred Jones is going to accept you as his personal client or he will introduce you to Don Nardo. Congratulations, you have taken a major step toward your goal. You're dealing with the best. At this point, Fred Jones is going make you his personal client, and being the principal of one of the largest real estate offices in the area, he normally only deals with large investors on significant transactions or he personally introduces you, with a nice build-up, to Don Nardo. You have taken a major step toward your goal. You're dealing with the best.
Reading your Action Principle every day is going to give you substance and confidence while you work with Jones and Nardo. You're going to know what's happening with local real estate, the techniques, the ideas, the financing, all of it. Jones and Nardo are salespeople. They like to talk. They'll like to talk to you, exchanging information, advice and criticism. Maybe it's going to take you three months or six months while you educate yourself before you buy that first home or piece of income property. It doesn't matter because Jones and Nardo realize you're serious and they're not looking for that one commission, but for the many commissions you may generate in the future. You meet Nardo. You, Nardo and Jones have something in common. Jones knows real estate is great. He's making money. Nardo knows real estate is great. He's making money. You know real estate is great. You will be making money. You get enthusiastic with Nardo. The $75,000 condo appreciating at 10% for ten years is going to be worth $194,530. Right. Nardo knows this. He agrees. You show him your folder and all the research you've done. You tell Nardo you're still at the education stage and will he help you find the best property, at the best price, get the best financing, etc... Of course he will. Will Nardo share his expertise and connections with you? Of course he will. Nardo is the best and now you've got the best working for and with you. Nardo becomes one of your principal mentors. Think about sharing your same grand investment future with unsophisticated agents. They can't make big dollars from real estate and they're licensed agents! How much faith will they show in your enthusiasm? Find your Jones and your Nardo. You get a feeling from people. Feel comfortable. If the above scenario didn't fit, try it again with the next largest office. This system works. Make it work by finding the experts you feel comfortable with and then, stick with them. You'll rarely have to deal with anyone else after you've found Nardo. Nardo will know you and your objectives. If you see an ad or a sign for real estate from a different office, you can still call Nardo. Nardo will get the particulars for you, represent you, and it won't cost you any more money to put this personal contact to work. Having an excellent agent on your side is a big advantage. An excellent agent is a facilitator. He or she makes life easier. At a later date, you may find it is in your interest to study for your real estate license and represent yourself.
Go to Lesson 3
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