Realtors asking what I want?

General Real Estate Investing
1

So I sent an email to 6-7 realtors on Long Island explaining that I am looking for homes that are junkers basically the ones that haev bene on the market for a long time, that need to be fixed up, the ones they they think cant get any money from.

I got a call back from 4 that left me voicemail. I have to call them back today cause they want to know exactly what I am looking to do.

How do you think I should word what I’m looking for as a wholesaler so they don’t get turned off.

Also how do I compensate them? Do i tell them I would pay them a 500 dollar refferal fee? or do i pay them 2.5-3%? What do you guys recommend.

Basically I am looking for some advice on what to do when dealing with realtors to find wholesale propertise that I can get for 70% ARV value - repairs.

2

Many Realtors will not even think about working for someone unless they are making ateast $2K, but times are changing with “discount brokers”, etc. Feel them out. See what they are willing to work for.
I don’t see any reason to be shy about being a wholesaler. Put all your cards on the table and see who is willing to “play ball”.

3

What should I tell them I would pay? The LeGrand method says that I tell them I am going to be making lots of offers on homes and each one that sticks I will give them a $500 dollar referral fee. Is this a good method or no?

4

Depends on how bad they need $500 bucks. It’s worth a shot.

5

JP,

What you’re going to have to pay depends on the situation. If the house is listed with a broker, there will be a contract between the seller and the brokerage. The seller normally pays the commission and the commission is split between the buyer’s agent and the seller’s agent. If you’re trying to use a real estate agent as a birddog, then I’d make it worth their time - at least $1,000 is my opinion. You’re trying to build loyalty, not do things on the cheap.

Good Luck,

Mike

6

propertymanager is right. Most agents have no idea what you are looking for. They can tell you how to find a house that you would be proud to raise your family in, or retire comfortably in. But if you ask them to find a house that will make you money, they don’t know what that is. Their tools don’t even work that way. They have to take their MLS and other tools and work them backwards to find market prices and determine if there is any money in a house.

7

Would it be reasonable to assume that sometimes real estate agents will be presented with a listing that makes them say, “Ugh… I can’t sell this dump.”? In this case, perhaps you can say to the agent, “When this happens, please call me.”?

8

i’m a broker (and an appraiser) and if i can find something for 70% of TRUE market value, i’d probably turn it myself. kinda hard to do in southern cal…especially with typical marketing times less than 2 months.

i think that sometimes you have to really determine what market value is. also consider time frames. is typical time frame to sell a property in your area 4 months, 6 months, 1 year or what. if a seller wants to sell in less then typical marketing time, then they probably will accept a below market value sales price.

if you are expecting to turn it in less than typical marketing time(say in 1 or 2 months when typical marketing time in your area is 6 months or 1 year), will you have to accept a below market value price as well???

9

I’d say this could work depending on their market. In my market, I can seller a junker in two days depending on the area. We just have to factor in repair costs. If you wanted to buy at wholesale, I’d be willing to contact you, but the agent’s duty is to the seller. We’d be looking for retail minus repair costs, not to really give you a good deal since that’s not our job.

I do have investors that I contact when I have a good property, but often, the numbers don’t work for them since I can easily sell the property to a beginning investor at retail.

Bottom line is that it doesn’t hurt to set up a partnership with agents where you can help them get a quick close. Sometimes, the owner doesn’t want to wait to sell at retail minus repairs and just wants out of the home. That’s when you’ll get your best deal.

10

“The seller normally pays the commission and the commission is split between the buyer’s agent and the seller’s agent.”

I got a chuckle when I read this. I also wondered how no one had contradicted this obvious fact yet. I’ve even seen Moderators contest this reality in the past.

“Many Realtors will not even think about working for someone unless they are making ateast $2K, but times are changing with “discount brokers”, etc.”

Right on the first part:

Why would I want to work for $2,000 & accept all the liability (risk) that comes with being a Real Estate Agent…when I can make $10,000 w/the same risk?

Furthermore, since it’s the seller who pays commission…I would advise you not to even mention commission unless you’re sweetening the pot.

However, like Luaprenraw…I’m also a Broker/Appraiser/Investor, and if I stumble across something underpriced…I’m likely to buy it myself, or partner w/someone in the office.

A word on Discount Brokerages: I watch these listings closely. Discount - DEDUCT, draw back, knock off, sustract, subtract, take, take away, take off, take out NEGLECT, disregard, fail, forget, ignore, omit, overlook, overpass, slight

There’s a reason they’re discount, and sometimes you can pick up a really good deal (at the sellers expense).

I’d recommend having an Agent of your choice set you up on an automated search. They enter your price range & other criterion into their system & new listings–matching your parameters–are sent directly to your email. This gives you an advanced heads-up on all the competition.

We bought our latest investment this way. The Agent never got a picture in the MLS, and never put a sign in the yard.

I’ve got us set up on automated search now. We receive listings on a daily basis & I’ll soon be owning another investment property.

-Infowell