I am new to REI and have learned alot from this website.
I inquired about a low end property with an RE agent. He answered my question and asked me if I was working with an Agent. I responded that I am but have not been having luck with them. Well…I think that is when everything hit the fan…he told me that I need an agent and all of his money making investors use agents. Then, he tells me that he only deal with committed people, so after ONE year of me not buying a property and not making money, then I should give him a call.
I just said that I didnt have luck with agents and told him that I wouldnt mind not using an agent. I never said I wouldnt use an agent, he really just jumped to conclusions and got emotional. Telling me how many homes he moves a week and so on.
But…his remarks were like fuel to the fire, I feed off of stuff like that. I have heard different remarks about agents, but if they are jerks like this guy then you know which side im on. Kidding, I know that RE agents are a key component in most strategies, but this guy just lost a great team member.
Never do business with a person that makes you feel bad. This stuff is not that hard. There are a lot of agents that can help you make money, use another one.
His problem is probably that he needs the work, he doesn’t think you will be giving him any business so he is stressed. No matter how he looks he is broke. This is a weird cry for help.
In my area (Southern NJ) and in my experience, zero to very few properties worth investing in are found via RE Agents/MLS, so I wouldn’t worry about it much. Although I’m sure some investors have better luck using an agent, I believe most investors will agree that the best deals are the ones where you buy directly from the owner with no agents involved.
I’m one of those investors jmd_forest speaks of regarding agents. I’m in a market where I can buy cash-flowing properties straight off the MLS. I don’t have to advertise or drive neighborhoods to talk to homeowners. I just see what comes available on the MLS and my agent and I go look at the houses I’m interested in. My wife did a great job of finding a team of agents who enjoy helping investors. Properties are cheap enough here that I wouldn’t really save anything by trying to find the properties not listed on the MLS myself.
I’ve worked with some horrible Realtors before. There are enough of them out there that you have no reason to deal with one you aren’t comfortable with (and who isn’t doing the job you expect). You should do your part to be serious as well as being qualified to buy. Agents in this market should be happy to get any deals.
As a Broker and Investor I always find myself on the side of the Investor mainly because of the cost of commissions and weighing that against advertising…
However if you’re in a low cab cost area you’re probably right…
Question… Do you do many creative financed deals through your agent?
Not all Re Agents are jerks. The Problem is that most of them do not educate themselves in the overrall business of Real Estate. They think that investors, foreclosures etc will not pay enough commission to help them cap out in dollar office.
However, I am a Re agent, a Title Insurance Producer, small time investor, who is stuck, as of now, in regards to how to purchase another property with little resources. if you are looking for a team player and someone to brainstorm in NJ. Let me know. I am very educated in most of the area. still learning as I go along though.
Michael,
No, we’ve been pretty plain vanilla investors so far. We bought one house w/ cash, fixed it up, and later pulled our cash out. Other than that, everything has just been standard financing thru a local bank. I was going to go the owner financing route once. We bought a house from another investor who was looking to sell a few of his. He made us a good deal on the one we bought. At closing, I asked about owner financing on his others. He said he’d do that, but then he didn’t bring the price down on those to a good enough level. Those others just expired on the MLS. So far I’ve talked to two different families about buying their parent’s house w/o using an agent. One ended up owing more than it was worth and wasn’t willing to foot the cash to get out of it for a price we could pay. Medicare got in the way of the other deal. As long as we keep getting good financing and can find good deals on the MLS, that’s probably what we’ll stick with. I haven’t really seen many properties here I’d be interested in rehab/resale. The margin just isn’t there on most of those to make it worth my time. I’d rather hold long-term.
Guess I should also add this…our banker has known our agent for several decades. They’ve both done an outstanding job of helping our business grow.
Justin
This agent has an attitude and you should pluck him like a weed. There are many agents that are worth their (proverbial) weight in gold. Let them do the work to find the deals and manage that relationship without egos involved and focus on the end result, making deals and profit together.
Example…I had an agent bring to me a brand new home where the builder went broke and defaulted on the construction loan. The home was beautiful and in a high end of Atlanta. The bank was owed $437k and the market value was $550k at that time. I made an offer through the agent as follows:
Purchase Price : $437,000
Seller (bank) will finance $437,000 at 7% fixed on a 30 year mortgage with a 7 year call (balloon) and a one time non-qualifying loan assumption.
The agent said she would not make the offer as they would not accept it and it would be embarrassing for her as the agent on behalf of the bank. I calmly looked at her and said, you are a license agent and you are obligated by law under your license to make this offer! Do it!!!
I received a call from the Bank’s Attorney the next day saying the closing documents were ready and to bring $4,500 cashier’s check for the escrow to close! I lived in that home for a year and sold it for $550k. This is an example of how to manage your relationships with agents. Some need managing and others who don’t are typically R.E. Investors too.
I’ve made fortunes from deals that agents bring to me. They are worth their commissions and you will realize this when you finally close a deal with a profit made from one of their prospective listings.
I think this is where Rob and I are a little apart… As a California Broker and real estate agent rarely do I believe an Agent is worth their commission from a non traditional investing strategy.
Certainly they can bring you deals to do… I will clap to that, however I would rather position myself so that the sellers finds me directly… So I can invest the commission I would have paid as the buyer into marketing my business for future gain. If I were to buy a home at 400k and the seller authorized 5% commission then the agents is earning 20k not a bad thing I guess for the agent… Especially if I were going to earn 100k. Most of us would say having to only put down 5k to make 100k who cares that the agent made 20k… I do…
Its a simple formula… Youll spend 10% in advertising for every dollar you make you should not spend more…
And the idea that you have to use your personal credit to buy a house to make 100k is crazy to me… Why… There are so many ways to do deals with zero money and zero credit that it is foolish to me. With that said my personal home I totally get… However as an investment no…
BTW to everyone who says Sellers pay the commission I disagree… All a seller does is authorize the payment… The cost of commission are included in the price a buyer pays for a property…
In defense of agents, if youre in an area where the cab costs are so low that the dollar spend is lower then the cost to advertise then naturally you should also look in the MLS… Just dont go out and hire the first agent you meet…
Most people buy investment property as follows…
Couple sitting in the living room see a legrand infomercial about real estate investing and decide thats for them. Rather then going to his weekend boot camp they decide to buy the Sunday paper… They open it to the real estate section and the Guy picks the real estate agent with the best smile and charm…You can see charm in a picture, everyone knows that…They call the agent and tell her that they want to buy a rental… She, the agent with the charm, say great lets meet and I will show you the homes for sale. They pick one out of the MLS and ask the agent how much they should pay and since she is getting paid a commission the higher the price the better. So naturally she says well this type of home requires a higher then listed price to make certain you get the deal… So off they go to their first rental. Then the market crashes and their tenants get a divorce and the one who remains cant pay the rent which means the investor cant pay the mortgage that just readjusted. They call the agent with the charm who isn’t as charming now to try to resel the over valued property and find out that she is now working a flap jacks tacos…
get access to the MLS and find agents that list ‘investment grade’ properties.
this agent was most likely angry because he has dealt with investors that don’t buy properties at ‘list price’ out of the MLS…therefore wasting his time.
you don’t need an agent to be a successful investor, but they help when listing your rehabs for sale.
If it was his listing and you don’t have an agent, then he does dual agency and gets all the commission.
I would have stopped him and asked him if he wanted to sell me the house or not.
A really good agent is worth their weight in gold, but the majority of agents are much too lazy to be of any use.
If you find an agent who is willing to work and has good follow through, then use him. Mostly what you’ll find are agents who mistakenly think they can make money without doing much work, and that someone else will bring the buyer and push the sale through escrow.
the agent you talked with is not the issue - forget about him.
move on.
but in defense of agents - alot of “investors”…are not investors. they are people who WANT to invest in re but are not ready to buy.
really good deals, in my market anyway - require cash. no money down deals are not serious.
assignments are not realistic - ESPECIALLY for properties listed on MLS (with realtors).
so - many agents don’t want to waste too much time with buyers who A. aren’t qualified
B. have no money
having said all this - i’ve spoken to so many “Cash buyers”…it’s ridiculous. and i know investment numbers - and i can spot a DEAL from a mile away - usually I find at least ONE on the mls too - every week.
i send them to “investors”…“Cash Buyers”…and what do i hear back from them? NADA.
my partner and i just buy a few of them a year -
but there are REALLY good deals out there - most agents just want to deal with real CASH BUYERS -