Now that I have a few buyers on my list and got my business card for bird dogs going out, what should I do next? I know I need to find properties but I was thinking, should I…
Get the contracts ready? Do I go to a RE agent and get it from them or write up one myself or where can I get these contracts that are not 50 pages long? Please help with this.
Call around to find a title company that does double closes?
One other question that I need clarifcation on is:
How does working with a realtor work?
-I look for a realtor to work with and look for properties for me.
When I assign the contract and/or double closes, how and where does the agent get his/her commision from? me? How much?
If the agent is a buyer’s agent, do I still pay him/her?
Hey Omico, you’re asking many questions that will be difficult to answer in a thread because they require some homework on your part… but I’ll try to help as much as I can.
First thing first, lets correct your terminology. Birddogs do not put properties under contract. They find the property and pass the information on to the investor who does the negotiations and closing. You get paid for the referal.
The steps you talked about are for wholesalers. As a wholesaler, you perform all the required work to aquire the property then sell the contract to an investor.
About the paperwork… it all depends on your state… since you mentioned title companies, I will assume you close through title companies not lawyers. Title companies feel more comfortable with certain paperwork more than others. talk to other investors in your area and see what type of paperwork they use. Thats why REIAs are great. I use our state contracts that realtors use. Texas contracts are assignable, you may want to see if your state contracts are assignable and if you ca use them.
to wholesale, you can sell the contract for an assignment fee. Check with wholesalers in your area if they have an assignment form, or talk to a title company and ask them if they have a preference and how they like you to do it.
Double closing is almost a thing of the past… the reason I say that is because majority of title companies won’t touch them. Common thing I see now is that they require a day between buying and selling, meaning you need to come up with the funds. stick with contract assignments.
Now as far as working with realtors goes, that would be a nice start to learn of the market, but unless you are in a declining market, you will most likely not find many deals. Good deals are usually snatched before they hit the MLS. Some can still be found of course. The issues you will have is that Realtors will not allow assignments, and want to see proof of funds from you. and will need $500 check for earnest money. Not to mention, good realtors won’t work with you… and those who will, are not good realtors
You need to learn how to find properties on your own directly from the sellers… but working with a not so good realtor is a good start to get your feet wet while you learn the ropes.
Fadi, thank you for taking your time to respond to my questions. Your suggestions helps and clears things up a little.
you can sell the contract for an assignment fee. Check with wholesalers in your area if they have an assignment form, or talk to a title company and ask them if they have a preference and how they like you to do it.
Now, when assigning a contract, do I need to go through a tittle company to do that or can I just do the paper work with the buyer? From what I understand, I can just assign it to a buyer and he/she gives me the fee. Please advise.
Usually they won’t give you all your free till the closing goes through just in case the deal does not close. You could ask for $500 to $1000 earnest money. Title company will cut you a check for your free. That is why it is important for you to screen your buyers
Fadi - I believe you are giving realtors more power than they actually have. Realtors have no power to allow/not allow assignments or to require/not require proof of funds/earnest money. The realtor is only an agent. Sellers must decide if they will allow assignments and how much they want as earnest money.
In the current market condition (with more sellers than buyers and some sellers desperate to sell) I would expect that sellers would be more inclined to accept assignments and may even be very flexible in terms of earnest money. What do you think?
I won’t argue with you. If you think its no big deal, go for it. But as Realtor, and I am one… if I smell assignment I will tell my client not to accept the offer because the offer is not from the buyer, but someone else.
Fadi - I am not trying to argue… I am also a realtor… :O) (actually, a brand new with less than 1 month active… :O)
People have some misconceptions about us… and I was only trying to set the record straight… It doesn’t help the profession if we keep saying that realtors will not accept this, or that… When in reality realtors are only agents… not principals… :O)
It drives me nuts when people say that the realtor did not accept the offer… Or that the realtor was not willing to be flexible… Or that the realtor was asking too much… I believe information is power… And people should know what a realtor can and can’t do… Just my 2 cents.
And even if you still tell your sellers to not accept an offer, I hope you will agree that in the end of the day is still their decision if they are going to accept it or not. And in today’s market I have met more than one person trying to sell their homes that would take anything, even an assignable contract… :O)
So I hope there is no hard feelings… I was only trying to share my perspective… I hope you have a nice evening!
Yes, agents are suposed to present the seller with every offer that comes in even if they don’t like it and agree with it unless otherwise instructed by the seller. You can actually demand the agent present the offer as is to the seller too and the agent must present it.
But in practice, as an agent, you hold the seller’s best interest in mind and can explain to him the risk. There are many agents who do not know anything about assignments and will present the offer anyway. If you are dealing with an REO, assignable contracts won’t fly.
You can actually try it and see if it will go through, if not restructure the contract/offer.
