Real Estate Agent- Please Help!

Hi Gabriel,

From what I have learned, there are 4 parties to the agency in a specific property sale:

1 - Listing / Selling Broker
2 - Listing / Selling Agent (or Salesperson)
3 - Buyer's Broker
4 - Buyer's Agent

As an investor, you are (if you so choose) going to be represented by a "Buyer's Agent" who submits your offers to the "Listing Agent". If the sale pushes through, all the four parties to the Deal will be paid from the proceeds of the Sale by the Seller. On average, the Real Estate Commission is 6% of the Sale or Purchase Price. So if for example, you have a $100,000 property, and the Seller negotiates the RE Commission at 6% with the Listing Agent or Listing Broker, that would be $6000 in commissions that would have to be split by the 4 parties I enumerated above. So going back to your question, how will your agent get paid?

If we use my example above: $6,000 / 4 = $1500. Usually, with the sale, the escrow funds will be at the title company. When the deal closes, the title company issues the checks for all parties, investor included. So, that's how everyone gets paid.

I hope the example helps. (I'm not a realtor, I am also still learning! But I learned this when I did my RE Investment #1 here in Texas). DG'ers, please feel free to correct me if I am wrong!

Happy investing!

Cris

So lets say I want to do an assignment and I have an agent with me helping submit offers. We focus on the 25:1 system and put out 25 offers in 1 week. One gets accepted and its a great deal so I blast it to my buyers list. Someone wants it so I assign it to them then take the purchase agreement and the assignment of contract to the title company. Then I just wait till closing date for the check and in turn my agent will also automatically get a check? This all being paid for by the seller like you said? or do I have to take a % off my check to pay my agent?

Sorry about all the questions, I just want to make sure that if we get an agent to work with us, that he/she will be paid fairly if we decide to focus mostly on wholesaling, for now.

Thank you

I am new also, but I want my assignment fee up front! before closing because I could have assigned it to someone else that would have performed.
Now My agent has done alot of work for me, and you can see if deal fall's apart, he would not be to happy if I walked away with the $assignment fee and he got nothing. So to keep him/her happy I offered in my case him 50%.. So I would be keeping my money in account until closing to make sure it was aval. to him should it not close.
So, when you are talking about unlisted properties, you don't have the agent write it up, you can do a contract between you and seller. Or if you like to have paper work done, simply ask agent to do paper for a fee. Maybe couple hundred and give a 1099 for tax purposes.
My agent is agent/broker and home office. He does not have to split with anyone. Agents that work out of traditional brokerage, it depends on where they are on the split #numbers with the broker. Usually they reach a $$ amount in sales and then they become 100% Each brokerage office has their own agreement within their agency. Many times seperate contracts with various agents inside the brokerage.

Again I am new and have 3 under contract and not yet assigned.

3 houses under contract currently? Nice, thats awesome! What form did you use to submit an offer? and did you use any contingencies/exit clauses?

For the first offer I ever submitted, which was today, I used the purchase and sale agreement under forms here in the site. I found that there was alot of blank spaces left, is that fine? and for the contingencies I put 2 under 10) Additional terms and conditions: 'Contingent upon 15 day inspection period, after acceptance' and 'Contingent upon partner's approval' The offer was declined which was fine, I'll just take it as more practice for me.

I had agent on all three. and I used the same verbage in the contingencey. Coach told me about this one. I also had my agent add that is when earnest money would be deposited. Addtionaly that Contingent upon partners approval and accepance of the inspection".

My agent forgot or didn't put it into two of these accepted. So unless he puts in a seperate addendum or submits a promissory note, it's due in 72hrs. I don't have $1,000 and, one was due on Friday last. Agent a little mift at me and when I asked him to submit the two above, he said deal would die on Monday.. basicaly refusing to submit those for me. ROAGE Runaway Agent. After these deals.. Hope they are sucessful, I will not use him anymore. Tells me buyer's are liars."

If my deal was not listed, I would use an attorney to draft contract or use forms here.. Yah awesome if you can get them assigned, but if not, it became a learning experience and I burned the bridge w/this realtor..

Gabriel,
Yes. If you will be represented by a "Buyer's Agent", they will make sure that they get paid at closing, either by having you sign an Agreement that you will be represented by them, on that particular property. Also, another point is, since your Buyer's Agent was the one who submitted the offer that GOT ACCEPTED, then contractually, the Seller's Broker/Agent should make sure that your agent gets paid (they have strict rules on that).

From how I understood what I have been reading (applicable TX RE rules here on RE Agencies), RE agents/salespersons are not allowed to accept anything else other than commissions which go through the Broker (who sponsors the license of the salesperson). (Or else they could lose their license if someone reports on them).

Skytrolly, I think that if you are working with a broker, then that's great, in the example above, then he/she will have 3% instead of 1.5% (on the Buyer's Broker/Agent side). Congratulations on your houses under contract!

Disclaimer, I am NOT a realtor, just sharing what I've read. For the DG RE agents out here, please correct me if I am wrong. (I am sharing what applies to my state, from how I understood it -- I have been trying to learn as much as I can too My having had spoken to a LOT of agents also has paid off! LOL!

Happy investing and good luck to all of us!

Cris

Thank you so much for explaining and clarifying for me. I sent the emails out yesterday to all the agents I could find emails for online that work here in Tampa, FL. Hopefully I'll be getting a reply in the next few days and find an agent able and willing to work with us. I want to start putting out multiple offers not only on MLS listings, but also FSBO's that I will be pulling from my bandit signs.(Got about 20 signs out as of right now)

If you're not making offers, you're not getting deals.
No deals = No income

Never giving up!

Don't worry gabriel, agents and brokers get paid at the closing. Depending on the state they get paid by the seller. Even in Gov't foreclosures they will get paid (especially with Gov foreclosures!. The seller pays for them to get a better price than they can get for themselves otherwise they would be doing going the FSBO route.
Some contracts, though I have never seen this myself, stipulate that the buyer will pay these costs (again I have not seen this but I am quite new myself, only 3 deals so far with #3 closing Fri).

Best of luck and keep your focus. Follow the Blueprint and you will see results.
Andy Nelson

Great job on completing 3 deals. Got one closing friday, thats awesome. Can you tell me a little about your first deal? maybe through PM.