Real Estate Insight

Secrets for Timing The Real Estate Market – pt. 2

What You Will Need

In the first lesson of this series, you learned that it really isn’t possible for anyone to accurately time any real estate market, including the most experienced professional real estate investor. If you missed the first lesson, you will want to go back to it to get up to speed. As with every lesson, part 1 laid out important fundamentals you need. Each subsequent lesson will build on the prior one. By the end of the series, you will have a complete understanding of what it takes to be a real estate investor.

Dispelling Real Estate Myths

So if one can’t time real estate markets, how is it that some build fortunes, while others don’t make, or worse, lose money in real estate? What are the secrets of the real estate pros? The main difference between these two groups of people is this. Professional real estate investors do their homework. They research, learn, and listen. Researching different markets and trends, learn investment fundamentals and strategies, secure the best financing and carefully choose a Realtor that is an expert in both the market and in real estate investing. Finding that expert Realtor is probably the most important research you can do. Why? Because that Realtor has the best information and pulse on that particular market you are in. A critical mistake amatuer and first time investors make is overlooking the role and importance of the Realtor. This same group puts more thought into deciding on what’s for dinner than how to choose a Realtor.

Myth #1 - All Realtors are created equal.

I’m constantly amazed at how many people believe that. Unfortunately, I’m not surprised. Think about it, what other “profession” has practitioners that do it part time while spending full time at their “real” job? There are few barriers to get into the business. You can complete required classroom instruction in as little as a week, take a state exam the next day and be given a real estate license in the same month that you started the whole process. Heck, my cousin is a waiter at night and sells real estate part time during the day. All of those facts are 100% true. That brings me to the next myth.

Myth #2 – There is little difference between one Realtor and another.

The biggest mistake you can make when buying real estate is to believe that. I have been a Realtor for 20 years and recognized each year as a multi-million dollar top producer. I’ve done it full time and have never had any other job to distract me. During the course of my career, I’ve spent over one thousand hours in non-mandatory education, seminars, workshops, etc. to become an expert in my profession. On top of those thousand hours of formal education, I spend any where from 20 to 30 hours every week studying, researching and networking to make sure I’m always at the cutting edge of my profession. I’m not saying all of this to brag or attempt to get your business. Chances are I will never have an opportunity to meet you let alone work with you. I’m saying this to dispel the myth that there is little difference between two Realtors. Yes, there are people who have a real estate license and practice it “in their spare time.” That’s what makes choosing a Realtor the most important research you will do as you start out. Who would you rather have representing you in probably the single largest purchase you will ever make in your life? A person that sells real estate as a hobby or someone who has spent countless hours to become an expert and practices real estate like a professional?

Myth #3 – All Realtors have access to the same information.

That myth isn’t totally false. While it is true that all Realtors have access to the same MLS information, knowing how to search and find the good deals is what sets them apart. Unlike the yellow pages, the MLS doesn’t have a category named “Good Deals”. If your Realtor doesn’t know how or what to look for, they may not find it. And having access to the same information is not the same as knowing what do to with that infomation. Most Realtors don’t even have the same understanding and knowledge that you will have just from reading this series.

So what can be learned from this lesson? Adopt the fundamentals of the real estate pros. Do your homework. Don’t take shortcuts and never underestimate the importance of carefully choosing your Realtor.

Next up – Seller’s Markets, Buyer’s Markets, Neutral Markets…and The Pros and Cons of Each.

Until then, happy house hunting.

Elliot Lau