What have you said to prospects that call you that are currently listed with a realtor?
The best way to handle that is to tell the seller that they will have to cancel the contract with the realtor BEFORE you can buy it from them. They have to get the agent to agree to an unconditional release (usually, the release says something to the effect that if the property is sold within x number of months, the seller still owes the agent a commission).
I’d suggest that you have a letter/form handy for the sellers so that they can just give/fax it to the agent.
Most agents will be okay with it, but will usually ask to be refunded some amount for their advertising costs (okay, if it’s within reason, imo). Those that aren’t, I’d suggest a call to their broker, and if that doesn’t work, a call to their MLS board. Neither are usually too fond of unhappy customers.
BTW,
I like your website. Might I suggest, however, that instead of a “coming soon” on your buy a house link, that you create a form-fill for that, too. That way, when you get a house, you may already have a buyer/tenant waiting.
Raj
Raj,
Thanks for the tip on the website - that makes sense. However, duh, what would I put there - I’ve never sold a house so I’m lost - do you have an example I could look at?
And the same for the agent release form - do you know where I could look at a template of that?
Sorry to be so duh, but that’s the kind of rainy day I’m having here!
Immy 
Stupid noob question…Why is it not a good idea to work with someone who is already listed with an agent? Is it because you don’t want to pay the agent’s fees? Also, does this only apply to wholesaleing, or would it also apply to other types of real estate investing?
Shania
Shania/Trixy,
My assumption, and it’s just that - an assumption - is that relators obviously are trying to get top dollar for the clients and also get top dollar for their commission; after all that’s how they make their living.
An agent, from what I’ve read and been told here (I’ve never worked with one), is obligated to present all offers but working on my principal of getting top dollar, I’d think that they are not going to be too thrilled to present a 80% LTV or lower offer on the property if it doesn’t need a lot of work (in which case it would be priced accordingly or not even listed with an agent). In our market in Maryland here, even the bank REOs are getting listed at full market value.
I’ve also read ( again, never have worked with an agent) that the ones that are investor savvy and friendly and probably are investors themselves are not as numerous as those that are not. They may not understand creative financing, assigning contracts, etc.
For all those reason I mentioned above, at this point in time I personally do not want to tangle with an agent. Back to the commissions for a minute, if someone wants to sell to me versus an agent I can use the fact that I’m essentially saving them 6% in costs to help bolster my chances of getting the sale. For example, I have someone now that called in on their father’s house; it’s been sitting on the market for over 70 days because it’s listed for 650K (maybe other reasons as well but I think that is a major one as even here in Md the market dynamic is slowly shifting towards the buyer). A 6% commission on 650K is how much $$$ – that’s $39,000!!!
I
Personally, I don’t have a problem working with an agent (and thus, paying the commission) IF the agent is the one who brought me the deal and/or I found the deal through the agent’s advertising efforts. In either case, the agent is entitled to their commission.
IF the seller calls me direct, then I have no obligation to the agent to pay a commission because they’ve done nothing to earn it. However, the seller still DOES have an obligation to the agent. In most cases, it’s easily worked out, but sometimes, it’s better simply to let the listing expire than fight with the agent.
As to the agent release form: any RE office should have a standard release form available. If you know any agent, just ask nicely. All you’re looking to do is X out the part where they are still entitled to a commission IF the property sells with X months of termination.
Questions to ask buyers: there are a ton of forms, etc. online that gives you good questions to ask, just do a search. Many websites similiar to yours have them, too.
Basics are: name, address, contact numbers, current monthly income, what area are they interested, what price range, what monthly payment range, what time frame (how fast to they need a place).
Having this accomplishes two things. ONE, you have potential buyers before you have houses, plus you also have an idea of what type of property you should be looking for. TWO, you have another potential income stream, as other investors will pay you $$$ for good quality tenant leads.
Raj
Good point. I guess the agent would probably have their best interest in mind. I’ve been seeing more than a few houses listed with an agent in the MLS that are supposedly investor deals. This is helpful to know.
Thanks
Shania
Thanks Raj,
I’m going to work on those ideas for the website and follow up with an agent friend on that release form.