OfflineDealing with Real Estate Agents
by Bill Bronchick
The real estate agents have a valuable source of potential deals for the real estate investor - the Multiple Listing Service. Unfortunately, real estate agents have a monopoly on this information, so they may be a necessary part of an investor’s game plan.
Dealing with real estate agents can be difficult as an investor. Agents prefer home buyers with cash to put down, good credit and conventional buying power. Their interest is getting a commission with as little hassle as possible. Most agents have never done a creative real estate transaction with an investor, so they are not often receptive to unusual offers. Most agents equate a “nothing down” offer with a buyer who is not serious.
Offer a Reasonable Earnest Money. You cannot present an offer with a $50 earnest money and expect an agent to take you seriously. You can expect to pay at least $500 as earnest money to get their attention. If you are presenting a solid cash offer, you should put up more money. If you are concerned with losing your earnest money, consider using a promissory note.
Offer a Short Closing Date. Another way to get an agent to take you seriously is to offer a fast closing. Nothing makes an agent salivate more than the thought of a commission check in ten days. If the agent has another offer presented to him, he will usually advise his client to take the offer with a larger earnest money and faster close than an offer which is higher in price.
Insist on Presenting Creative Offers in Person. If you present a creative offer to an agent, it will not be represented to the owner in the same enthusiastic fashion. As stated above, agents do not like creative offers - they like conventional offers from solid buyers. If you want the owner to hear all of the great benefits of your offer, insist on presenting the offer in person.
Appeal to the Agent’s Greed Factor. Let’s face it . . . real estate agents are in the game to make money, just like anyone else in any other business. If you can offer the agent an incentive to make money out of the transaction, you will get his cooperation. If you present an offer which does not permit enough cash to come out of the deal to pay the agent, why would he cooperate with you? If you present a lease/option offer on a listed property, how will the agent receive a commission? You need to find a way for the agent to get paid, even if you pay him out of your own pocket.
Do Your Own Comps. Sometimes you will get the opposite of an uncooperative agent - an overzealous agent. Be suspicious of an agent who tells you what a deal you are getting on a property. If it is such a good deal, why didn’t he buy it? Don’t take his word as to the value. Ask for a printout of comparable sales (not listed properties). Be aware that information contained in the MLS computer was entered by the listing broker and may be exaggerated. If a comparable sale shows the same square footage as the house you are looking at, take a drive by and see if it is accurate. Do your own assessment of value.
Fax Preliminary Offers First. Don’t waste your time filling out a contract offer until you have preliminary approval. Most agents are not this formal and will take any offer in writing to the seller. Simply summarize your offer in writing and fax it to the listing agent. Once you have an oral approval, then take the time to fill out a contract and an earnest money check. NEVER put up earnest money until the offer is accepted!
Don't be Bullied by Uncooperative Agents. If you cannot finesse an agent, don’t be afraid to stand up to him. Some agents are unethical and will refuse to present your offer. Many times the agent will lie and tell you that your offer was rejected when, in fact, it was never presented. If this is the case, do not be afraid to go over his head to the listing broker. If the listing broker is uncooperative, deal directly with the seller (unless, of course, you are also an agent).
"THE ARCHITECT OF YOUR DESTINY IS YOURSELF"
"SUCCESS WALKS HAND IN HAND WITH FAILURE"
I have heard that as a wholesaler and not a realtor, that I am unable to present an offer to a listing agent, is this true? I was told that once a property is listed in the MLS, I need a Buyer's Agent to work with and present my offer. In fact I am not even suppose to contact the listing agent by email or phone. (something about procurring source) Is this right? In addition in a situation where I want to use a Buyer's agent to protect my interests and a seller doesn't have an agent, then they would need to get an agent to represent them or have mine represent us both, when allowed. Is this the case?
My scenario is this. I still haven't presented an offer yet because I can't get a Buyer's Agent to see the urgency in getting back to me. I don't want to miss out, because the Buyer's Agent is too busy to call me. How long should it take for a Buyer's Agent to get back with their client about a property. This Buyer's Agent sent me pages of comps for me to go through. Since I am just starting out, I don't know if the Buyer's Agent is suppose to check the comps, and then go over them with me, so together we can make the decision if this is a good deal or not, or am I suppose to go through every comp, use the ARV formula and figure out everything myself. I even had one tell me that I needed to find out about liens and judgements on the property, or he wouldn't even write up an offer. Bottom line, what is the Buyer's Agent suppose to do for me, and can I work with different Buyer's Agents on different properties? For example, one I want to use only does multifamily, but another one works only on properties under $300K? Thank you for your help.
Nancy
Unless there is some GIANT difference between our states, by all means you can go directly to the listing agent! They will benefit even more from this because they will receive all the commission from the sale (you could even ask for a discount in this case). Unless you have signed a contract with your buyer's agent, you are clear to speak with and offer through whomever you like. If you can't find a buyers agent to put offers in for you, what good are they doing you anyway? They'r just holding you back!
This is how I found my realtor. I called the agent's # that was on the yard sign of a house I wanted to look at (listing agent). We met, clicked, and we've been together ever since, learning every step of the way from each other. Start looking at the properties you want to see with the listing agent from each. You'll find someone that fits what you're looking for, and get to know a bunch of the competition and how they do things, as well.
The agent you end up with should be excited to work with you and willing to put as much in as is needed to make things work.
Rina
P.S. I get the comps from my agent, but I always like to figure them myself, too.
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
Thank you Rina,
I am located in Virginia, and I will probably purchase primarily VA properties. I hate being new to this; people tell me things that aren't true. Actually how I would like to do this business is for me to contact the listing agents and ask the questions first, and then I can say that I would like to think about it; and if I decide to make an offer, I will have my agent submit my offer. Is that legal to do it that way?
Nancy
and then go for it. Just tell the listing agent the name of who you ARE working with and they will honor that. I actually got my realtor's blessing for the same thing, although I haven't done too much of that. It's just nice to have someone who knows you and is consistently working with you. If you have a good agent, he/she won't mind finding out anything you want to know. But legally, yeah, I wouldn't think there's a problem.
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
Thanks for posting this thread! Great information, as usual!
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
I'm looking for the template of the letter DG used in his latest book to send to RE agents about your intentions in investing.
I really need help right now. I am looking for a Realtor that knows the Northern Virginia area and/or surrounding areas that would like to represent me for my wholesale/assignment deals. I would like for this person to be experienced in real estate investing, and be available to work with me as soon as possible.
I want to be upfront. I need someone who has the time and doesn't mind pulling comps and writing up what could be low ball offers on many properties.
I need this Realtor to make calls to listing agents for me.
I have a true sense of urgency, since my husband has been out of work for close to 4 months, and we could possibly lose our home if I can't generate some income soon. I need to wholesale a house to an end-buyer quickly; so I need someone willing to put in the time. I am finding homes that I want to put an offer on, but the Realtors I have been working with have been taking too long getting back to me and when they do, they are discouraging me. The Realtor I want to work with must have a positive and confident attitude. I hope to build a strong working relationship with this person, where both of us can make some good money.
Thank you for any help that you all can give me.
Nancy
my question is, if you lock up a house on contract,and are working with a realtor,can you still get by with not putting any earnest money down? or are houses you are getting under contract done without a realtor? or can you still work out a deal that your end buyer pays the earnest money
thanks perry
Has anyone had experience with using the websites that send you motivated sellers/buyers lists? I signed up for one, cost me $1 for trial month. For a buck you never know.
Bruce