Questions To Ask A Listing Agent

Grant has created a great team at his real estate division and we work with the top agents in every market that we are currently shopping, but that does not mean that Grant and I are not hands-on. We personally walk any deal that we are considering and we talk to everyone - from current management to the tenants while we are there. It gives us a sense of the deal and you should always know as much as possible before you even consider purchasing a property. 

Before we take the time to fly out and visit a property, the first conversation is going to be with the listing agent and I have learned from Grant that there are questions that you should always ask - here are those questions.

What is the listing price?

This may seem obvious, but there may be times that a listing price is not advertised and you need the price to accurately underwrite a deal. 

How many units and what is the average rent?

These are two important specs that you need to know to initially look at the deal and compare it with others. 

What Year Was the Property Built?

You want to know the age of the property so you have an idea what condition the units are in and get an idea what upgrades they might need. This will also make it easier to find comparable communities in the area when you do your market analysis.

What is the current occupancy?

This is extremely important! It gives you an idea of the cash flow you can expect when you first take over the property. If it’s a new development, we won’t consider a property that is struggling to lease up. If it’s an existing property, the occupancy can give you an idea of how the property is being managed and how attractive renters find the community. The best part; if you find out the property is 100% occupied, it means you can probably raise the rent after takeover.

When was the property last traded? What was it traded for?

You need to know when the property was last sold and what price it sold for. If the property was traded recently, ensure that any increase in the asking price from what they paid is justifiable. 

Who owns the property and why is it for sale?

Is the seller in distress? Is the property being sold because it’s owned by a fund that’s about to come to term? The answer could give you bargaining power, or may prove that the seller isn’t motivated to reduce the price. 

What is the upside of the deal?

Are there cap ex projects that can be completed to increase rents? Are rents current with the local market or are they due for an increase? A few other examples of possible upsides can be LOCATION, current occupancy, the possibility to add amenities to increase attractiveness, or even that the property is being mismanaged; bringing in a great management team WILL increase occupancy. Let the agent sell the deal. 

What is the downside of the deal? 

An agent will ALWAYS have great things to say about a property - they are trying to sell it. But we always want them to give us what they think the negatives are. Don’t let them gloss over this question. Make them give you a straight answer - is the location off? Are the foundations cracking? There is always a downside to every deal and the agent knows what it is!

Create a checklist of the questions that you should ask every agent you speak to initially - I have one. We look at a hundred deals to find one and it is important to have comparable information from all of the agents when deciding which deals to chase. 

This is all preliminary information and you should always get financials and other supporting documentation to verify what the agent tells you before making an offer. 

For a model that will help you underwrite your deals email [email protected]

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