Hi everyone,
Can somebody share what kind of discount one would normally ask for from realtor if you buy/sell through the same person? If you buy often?
Thanks!
Well, my first thought is NONE.
Why? Several reasons actually, but two important ones.
ONE. If you haven’t yet bought several, then you’re in no position to even ask for a discount. Inquiring now about one WHEN you start buying ALOT will probably only make an agent mad. I know that if you came to me wanting a discount because you “intend” to buy/sell X number of properties, my first reaction would be to tell you “we’ll see if you actually get one bought/sold, first.” It’s an amateur question.
TWO. If you are actually buying/selling several, why would you want to cut off the hand that feeds you (assuming from your question that you’ll using this agent to get deals)? Hey, everybodys in this business to make money, even the agent. Personally, I pay mine extra when I can. I want her thinking about me anytime a deal comes up, not the next investor on her list. You know what? It works. She calls me first on any deal. SHE offers to cut her commission if the deal is close, I don’t have to ask. Even better, we’ve got one under contract now, that a seller wanted a fast sell, and she called me BEFORE she listed it so that I wouldn’t have to pay a commission.
In short, prove that you are a valuable customer to them and you won’t need to ask for a “discount.”
Raj
DenverGirl,
Nice to meet you. 
I would have to agree with Roger.
I have bought my several houses thru the same Realtor in NC, and she is worth her weight in gold.
I would not even dream of asking for a discount.
I actually send her thank you gifts for the great job she has done for me.
Take good care of the people who take good care of you.
Happy Investing,
Raj,
I remember you when. ;D
John $Cash$ Locke
Hey guys,
I have a slightly different view on real estate agents that some of our colleagues. I am not a big fan of agents (personally), however if you feel as though you MUST use them then like everything else the commission IS negotiable. May first several properties I listed with an agent to sell, however I did not pay more than 4-6 %.
If you are purchasing a property listed with an agent the commissions must be paid at closing, however, if you are not using an agent then the deal has more latitude. You are able to become more creative in the deal structure without coming out of pocket the commission fees or partial fees.
The main purpose of investing is to have the widest margin possible on each deal.
I do believe in fair wages for fair work, however, I do not want agents that are not willing to work as hard as I do and want 7 % commissions.
I am new but I would have to agree with Roger…why bite the hand that feedss you???
Let them milk the cow when it comes to you and sell the farm when you want to leave… The best part is your happy making a piece of the pie and not trying to be greedy nickelling and diming to the penny anty stuff…you want to stress about a point or so then you are wasting time and future deals your agent could have sent to you for a quick bit of equity and cash BUT since you barter a price and dicker him down and I dont they may just call me or someone who has this philosophy of why get grredy???
Share the pie and feed all around and all will be happy…Keep the pie yourself or try to monopolize it and a newbie may swing up in your neck of the woods and share better to the agent and stel the whole pie from you.
Just a thought and only can be construed as I have NOT done this YET and YET is KEY as I have been sent enough deals from agents to keep me busy doing what I have and trying to get going to worry about the little I pay out as an expense for making 10K I pay 700.00??? Logic says I do enough of these all day long I will be content taking 9300 and not trying to take 9700 and giving an agent 300.
Im new so bare with the bluntness until I prove my THEORY I can only say logical BUT its just that a THEORY not FACT YET!!!
Leading edge,
I respect your position on this subject, however, I completely disagree. As I stated in my previous post. I used an agent in the first several purchases. I was not impressed with the limitations that were placed on me in negotiating the deals.
Yes, if your agent is bringing you several deals that you can clear 9300 on and only pay 700.00 in commissions then pay the agent what they require, but f you are a shrewd investor and have the ability to structure deals without the aid of an agent then your profit margins will be much greater. I have only had agents bring deals that required cash at the closing table. If you are cash rich and have nothing better to do with the funds then OK, but like most Newbies(as you stated you are) , you want to conserve your funds for other projects. Owner finance, Sub2, creative partnerships with owners are the best solutions for those new to the business and you do not need an agent to close these types of deals.
When it comes time to sell a property then if you are in a market that does not afford benefit to effective self marketing, then by all means use an agent and pay the price for the services provided. However, if you are in a market that you can effectively market the properties yourself, then by all mean do it.
LOL
I am a dirt farmer… I aint cash rich.
I am workin on my first deal. I got this through an agent and have several in which I make more than that 10K as stated. My point was that if you use an agent why nickel and dime over it???
7% is a little steep from what I can see BUT also if you are buying right then whats the big deal giving a piece of it back to the agent who gave it to you???
I like using agents as I have 6 that send me stuff all day long. I also do my own looking too. I have not had to put money into this deal except the earnest money and I am sure there has to be a way around that too after I learn from the more experienced guys like yourself.
I am not saying you cant dicker with them. All I am saying is I would rather not dicker with them over a point or two if they are bringing MORE your way. If this is a random or a broker you wont be using again thendicker away. To each their own. I am sure you do things a lot different than I would and it is working for you. Thats great. I wish I could be as successful as some in here and only like to learn which it will come.
I respect your point of view too as some markets dont support or wont support those rates of charging besides if you can do it yourself then save the work of the agent and pay him less. Less work is less pay. I dont enjoy the dickering with a person who is going to be doing business with more than once. Build and network myself with those in the profession and let them make money off me as long as my pocketbook still reads well and grows by doing so I aint complaining.
Sorry if I sounded pompus to you for voicing another view only being the new kid on the block. I am actually not arguementative but would like to state being new has taught me to be extra cautious on who I dicker with and who I befriend for bridges dont get rebuilt in a day when the words can rip them down in seconds is all.
My apologies
i agree with Roger
First of all the Agent’s Commission is between the Seller and the Agent. You don’t have a right “technically” to negotiate that amount. However, when you are the Seller you can negotiate your commission however you want. Remember if you keep the Agent Happy they may remember that if they know what you do and approach you with another deal. Don’t bite the hand that could feed you.
I’m more than Happy to Pay my realtors! I’d rather have a continuous flow of deals thrown at me rather than make a few extra dollars from stealing from the agent’s pocket
Just my thoughts, and No I’m not an Agent
KEC
Leading Edge,
Being cautious in the early days is a trait that even the most seasoned of investors must remember. The age old adage “watch your pennies and the dollars will take care of themselves" is as true today as it always has been.
You are correct, there are several philosophies regarding the use of agents in REI, I have found that for me, and those I work with, that using an agent as little as possible affords us more flexibility in the negotiation process which equates to higher margins in the deals.
“We shall agree to disagree”
BTW, congrats, on your new deal !!!
Thank you
Thank you for your input. What if I found a deal myself, but it is listed in MLS? If I want to use the same agent to buy ( it’s bank owned) and then fix and sell through him, shouldn’t I ask for discount?
i think you should ask for a discount.
of course it depends on how you phrase the question. i always
ask everyone for a discount including my mechanic & my dentist. don’t seem why agents should be treated any different!
;D
John,
It’s still when buddy. No worries.
Medscan,
While you have valid points about the use, or not, of agents, they are completely irrelevant to the question asked, which was “what kind of a discount would you ask for if you used a real estate agent (while REALTOR is a RE agent, an RE agent is not necessarily a REALTOR) for both the purchase and sell of an investment property?”
And you proverb does have merit, but the one I like better is “don’t fight over a dime that costs you a dollar.”
On that point, I hold my ground. IF you are going to be buying and selling investment property through an agent, you are doing yourself a disservice by asking for a discount. WHY? because you are basically saying to the agent, “I’m so all important. If you want MY business, then you are going to have to give ME a discount.”
You might get your discount, but I can asure you that what will be disounted will be the service, not just the price. Again, if you do enough business to actually seem important to the agent, you won’t have to ask for a discount, they’ll offer it to you.
Niravmd,
If you go to a mechanic or your dentist enough to warrant a discount, then I think that my premise holds up. The service has been discounted as well.
Raj
Another Proverb:
Don’t step over a dollar to pick up a quarter…lol
KEC
A penny saved is a penny earned!!!
Had to say it!
Lol
As the buyer, there is no discount to ask for. The bank has already agreed to pay a certain commission on the transaction. Once you fix it up and are ready to resell it, it wouldn’t be out of line to ask for a discount. You’ll also want to keep in mind how much work you are expecting from the agent. Do you want them to stick a sign in the yard and put it in the MLS or do you want them to really market your house (ie. advertise in the paper, mailings, open houses)? Sometimes you get what you pay for.
Of course, since this is an REO property, the listing agent may have a steady stream of REO listings and may not want to take a listing at too big of a discount. You’ll have to talk to the agent about it. If you happen to be dealing with one of the better REO agents in your area, they may have dozens and dozens of listings so one more won’t make or break them.
There is always someone out there hungry for more business. If your buying a house ask for a rebate from the agents commission and make sure it is written in the contract.
i disagree with people who think getting a discount means you got bad service. sometimes it true but it depends on the situation. a family friend of mine is a plastic surgeon. his charges
depend on the cost of jewellery a person is wearing. if you’re
wearing 1 carat earings, you probably aren’t going to ask for
a discount. on the same note, if you ask for a discount he’ll probably drop the price 10%. does it mean he’ll do a worse
job??
if you look for the cheapest person in town, he probably will do a pretty lousy job. but if you go for quality and ask for a small discount, i can guarantee the quality rarely suffers. if its
going to suffer, the person will tell you so.
That’s true, but the agent who has this particular listing may not be “hungry for more business”. If this is the first transaction, why would the agent give a discount (a rebate is illegal in my state). I agree with previous posters, once you show an agent you can make a deal happen, they will let you know about potential deals first and will probably offer to cut their commission to make a deal happen (especially if they know you are good for several transactions per year).
Would you be open to an agent bringing you a deal and saying “I know you want to offer X so that you can make X profit, but how about cutting your profit by a third and offering more so that I can make more commission?” Just a thought.