If you’re more of a passive type of real estate investor who prefers to let others find, inspect and evaluate various stages of a particular property, it’s likely you use a real estate agent to help find your next deal. And, if you’re new to the world of Real Estate Investing and are looking for undervaluedboth sides of the transaction properties and you’re not using an agent you should be.

Agents know where to look, market demographics and a solid understanding of valuations. If you’re new and your agent is looking for distressed properties for you to review, your agent needs to be experienced in short sales, foreclosures and working with a bank’s REO department.

When a property isn’t successfully sold at a foreclosure auction the bank puts the home in their REO department. The properties are repaired, title cleared and made ready for the MLS. If a home is on the open market and is not in any distressed situation it’s a fairly straightforward process—make an offer, accept, inspect and close. Sometimes not so easy with a property about to go into foreclosure.

Say your agent contacts an owner who is facing foreclosure but can’t sell because the mortgage balance is greater than the value of the home. This is a perfect candidate for a short sale but if your agent isn’t familiar with the short sale process to help the seller or, worse, the owner does have an agent but doesn’t have a clue how to prepare a short sale offer, it’s likely the home will be foreclosed upon and headed to the REO department. Now your agent is negotiating with an REO department or a broker representing the bank. Does the broker have the authority to accept your bid? Does the offer have to go back to the bank for a review? How long will that take?

Inexperienced agents on both sides of the transaction can not only slow down a potential purchase but unintentionally kill a deal entirely. If you’re in the market for distressed properties, work with someone with experience in that market. You don’t want someone learning on the job on your time.