ive encountered my first issue of where being an RE agent can throw some extra curve balls into a situation.
in brief, my aunt (also my mentor) is listing a house i’d like to put an offer on (list price $550k offer i want to put $460k). the issue im encountering is 1, if i put in this offer the homeowner might get ticked. i’m not to worried about this, but moreso the seller looking to my aunt and saying that it wasn’t priced right. i should also add that i know the seller personally (this house is in my local neighborhood, down the street, where i’m trying to establish myself as an agent. the 2nd issue is, the seller will most likley turn around to me and say “you’re an agent, you know what houses go for, yet you give a lowball offer”.
from the above you can see that knowing the seller personally, having my aunt (mentor) as the listing agent, trying to establish myself as a realtor (“getting sellers the best price for their home!”), and trying to obtain this house to fix and sell has provided quite a challenge.
a little about the home is that it is lake front (pretty high demand in this community). however the plumbing is bad and there is a crack in the foundation. the bathrooms are small and way outdated (i’d gut these and update to perfection). one bedroom needs to be gutted and the basement needs work.
i’m working on getting estimates and repair costs to see if my offer price is accurate and if profit could be made.
to end off i’ll add that i’m looking at this home with a completely differnet mindset (profit) whereas others want it as their main home. althogh the market has slowed a bit, homes are still selling in large numbers. i feel that this is still a sellers market and leaves me with less of the upper hand. from my situation, how can i justify my offer all while maintaining a realtors image. (telling my clients what to put their homes on the market for and lowballing the neighbors seems like a conflict). in my defense this home is not worth the listing price “to me”.
your opinions, suggestions, any and all info appreciated.
This is not a new problem. One of the reasons I did not renew my license. It can get complicated and you can even get lawsuits with your name all over the front page. Best to just talk to the owner to see if they are motivated and need to sell. All the explanations of why your bid is low will not help if they are dead set on getting their price. Just met with them and find their motivation and let them know how much you can afford to offer and why. With a new listing they will probably say no thanks and want to test the market some first. After that just let them know that you will still be interested at a later date as well and you would be there if they are ready. I always like to just tell the truth that a homeowner would be willing to pay more but most want a place to move to and not a rehab. But then again if they are living there they will feel that it is livable the way it is and at the price they are asking. A no win deal for you.
Hi! I wear both hats as you do, though I am now a broker. It sounds to me like you’re assuming responsibility you don’t have. You don’t represent these sellers, therefore, you have no responsibility to them whatsoever. It doesn’t matter that the listing agent is related to you. She has to present to them whatever offer you make, and the sellers do with it what they will. You’re bringing emotion into this and that will be your down fall as an investor if you allow it to continue. Let the sellers either reject or counter your offer. Period. Who cares what their thought process is. You have more important things to do, like move on to the next deal! Before I was a broker, and worked as an agent, I had a listing of a SFH for $79,000 that I knew was too high. I offered to by my own listing from my own client for a low-ball offer of $50,000. And guess what? It was rejected, but there was no offense taken. Good luck!
Hi! Yes, I suppose your aunt could be annoyed with you, but you’ve already established plenty of justification for your offer, so she shouldn’t be annoyed for long.
I LOVE being a broker and investor. I get commission on my own purchases, which in turn allows me to own portions of property I wouldn’t otherwise be able to purchase at this early stage of my real estate investing (year 3). I use my commission as my portion of the down payment. It doesn’t work with single-family homes, however. Residental lenders won’t allow that, but commercial lenders do. Of course, the fact that I’m a small “player” in the purchase may have something to do with it. At any rate, the two deals I’m brokering/buying with family will net me about $2,000 per month. Not much to brag about, but it’s still more than I ever made as an office assistant, and it adds to my current real estate income enough that now my husband can retire and work at home with me. He just turned 33. That’s what my username stands for - Retired In Our Thirties.
Do you own any real estate yet?