I have been building a portfolio of houses here in Houston. My target property is a 3 bedroom, 2 bath with 2 car garage greater than 1500 sqft. I buy these houses in neighborhoods where these houses comp for $100k and rent for $1000/month. I want to pay less than $85k and am targeting less than $75k (depending on fix up cost). I have been trying to find real estate agents that understand this. Am I not speaking English when I say this or am I on Mars.
Last week I found a house that comped for $100k to $90k. It was listed for $79k. It needed no more than $3k to bring it to top shape so I needed to buy it at no more than what it listed for ($79k + $3k = $82k) I told him that it was actually high, but because it didn’t need much work I would buy it at that price. Why did he say I needed to offer $90k for the house to “make sure I get it”?
I just had an agent send me a listing of MLS houses sorted by price from $100k to $80k. When I checked them for comps, they were priced perfectly for retail sells. What does this have to do with what I asked him? He didn’t do any comps, he just thought I wanted to buy $1ook to $80k houses.
If I use him to buy one of these houses, I would have done all the work. All he is good for is collecting a commission. My wife says I am too hard on real estate agents, but I can’t get over asking a “professional” for something as simple as this and not getting it. I can search the MLS and do the comps and make the offer to the listing agent without him (which is what I have been doing). I guess I am just venting but agents are a waste of skin when buying rentals.
I guess this is why they are so valuable when you buy fix up and sell. They keep pushing the price up.
Agents, like any profession, such as accounting (sorry Mark, just had to say it ), as the good and the bad. What is good for some may be bad for you. And yes, they are paid on commission, so they don’t make ANY money unless you actually buy. So contrary to popular belief, most agents want you to buy something, regardless of price.
I think that you may be looking at this all wrong. You’re basically only asking for a 10-20% discount, depending on where the asking price is already. From your posts, you got exactly what you asked for. Make offers and see what happens. The agent can’t do this for you.
If you are wanting an agent to find properties that are already AT where you want to offer, then you’ve got a twofold problem. One, there usually aren’t too many 20% under FMV properties listed (especially with specific bed/bath, sqft requirements) in the first place, and two, those that are go FAST!
As for the comment from the agent about price, who was he working for at the time? Did you have a buyer’s agent agreement with him? If not, then he was working for the seller and trying to get the seller the highest price possible. If he wasn’t the listing agent, then by default, in most states an agent is a seller’s sub-agent UNLESS he is specifically acting as a buyer’s agent on the buyer’s behalf.
Not sure how things are in your area but he may have been trying to imply that there might be a bidding war. In the old days when real estate was really hot, there would sometimes be multiple offers on the same property so if you offered more than the listing price, you were sure to get it. Now in this area most things go for a little under list and sometimes they’re properly price and go quickly. I did have that happen to me recently though and my client didn’t get the property.
Also I’m a little confused as to what you’re referring to by comps. Comps are recent sales in the area, something like within a half mile in the last year. Listings are just asking prices, not comps.
Doing comps take a while and has to be done manually. I can sign up clients who are looking for a particular price in a particular neighborhood, basically any item on the listing sheet can be filtered. I can’t filter for comps though, can’t say only do listings where the asking price is less than the comps for the area. At least that’s not a feature in my MLS system. So what happens is you get the emails and if you want to take a look at them, at that point, I’d run some comps for that address. It takes too long to run them to expect to have it done for every single listing that gets sent your way.
The real kicker in all this is when you do all the work and cut out the buyer’s agent, the listing agent gets double the commission and you’re the one who did all the work! Get yourself another agent that will work with you.
One question you asked is why the agent asked you to bid higher on that particular listing. It sounds like a HUD or VA listing that is open for public bid. At first they are not even open to investor bids so I still do not see why they asked you to bid higher unless they anticipated a lot of investors bidding on the property. It could be great advice to try to buy a great property or lazy advice to try to get you to turn in a bid that would not fail for them.
You have to find agents as well as other professionals that ‘compliment your REI style’. It’s like an interview process with trial and error. I interviewed several agents prior to selecting one.
Don’t let this experience sour you. Find another agent that works for you.
Most Realtors are clueless when working with investors. They just don’t “get it”.
Find a Realtor who is experienced working with Investors.
I am a Realtor who ONLY works with investors. Let Re-max have all the pretty houses and deal with homeowners! That is an entirely different market.
Call all your local re offices and ask Broker to reccomend an agent who has experience with investors and who is an investor. It will be hard to find, but once you do, stick with that one.
I got so frustrated in finding a Realtor, I got my own liscense. Now I have total access to MLS and can do my own thing. I know there are good ones out there, but they are hard to find.
As a Realtor, I have a unique position. I am making more $ than as investor and I don’t put my $ at risk. I love this business!
Also I did say that “When it comes to anyone in the Real Estate industry 10% of the pros make 90% of the money only work with that 10%!” I thought that included you? I was being nice to you infowell guess not though!
We have debated in the past there is no point we are two totally different people and that is what makes this site so great. There is more then one thought process!
), as the good and the bad. What is good for some may be bad for you. And yes, they are paid on commission, so they don’t make ANY money unless you actually buy. So contrary to popular belief, most agents want you to buy something, regardless of price.