A Realtor in my area specializes in working withe investors. One of his selling points according to him was that he does the negotiating with the seller (or seller’s realtor). Should I stear clear of this? He has a lot of experience and his company he founded does well. But I’ve always heard that I should do all negotiations with the Seller, not even the Seller’s realtor if they have one.
Thoughts?
Possibly this realtor is listing homes from sellers who are in preforeclosure. By then working with you directly, the re agent gets the full commission on the sale. Nothing wrong with that in particular, but you have to wonder who benefits the most from this.
If a seller has an agent already, you will need to work with them, since most contracts have a clause about the realtor getting commission even if approached directly by a buyer.
It’s really up to you if you want to work with a realtor. I do, and have a great one. If you feel this realtor is good, get him on your team. It can’t hurt to probe a little further.
He doesn’t list pre-foreclosures. Instead he has a large enough network that people go to him to sell their properties and he works with investors to find properties to buy. I’m not too concerned with having him on my team. I’m just more not sure if I should let him do the negotiating.
If there’s a realtor involved for the seller, can they say “all negotiations happen with me and I relay onto the seller” or can I just ask that any talks have the owner there, regardless if the realtor is there. Obviously I’m trying to buy well below market and a seller’s realtor doesn’t want this because of lowered commission rates.
Do you do the negotiating or does your realtor? is his main job to provide leads or more?
Thanks for the help!
Well, if there is negotiating to be done, the realtor needs to do what you tell him/her. They are negotiating on your behalf, not for you - big difference.
Sometimes it really depends on the seller. A seller may be more likely to trust a realtor than an investor - or vice versa.
Again, if a seller has a contracted real estate agent, legally they will be getting a commission, even if you negotiate directly with the seller. The seller may be willing to speak with you directly, but you must find out what their contract with the realtor is.
Best to find those sellers before they list.
I focus on REO properties, so my realtor works with me on those and the banks/agents their are listed with. It saves me time, since my realtor sends me the info on the houses as soon as they come up. He also gives me a history on the homes (such as if it’s a property that has sold several times over the past few years - red flag). I decide which ones to go look at and make offers on. For me, this is just an easier way to do it, and quicker.
This is why you either 1. don’t even look at listed properties, or 2. get a Realtor on your team that will be with you thick & thin and vice versa.
If the property is listed, you have to go thru the Realtor, it even states in the listing agreement with the sellers, that if a buyer shows up refer to the listing Realtor on the sign with their cell # posted.
Realtors present all offers to their clients, that don’t mean they will get accepted.
Remember as an Investor too I don’t look at listed properties, only the ones that have sit for a loooooonnnngggg time and have expired.
Just my 2 cents :bouncemulti
Thanks for the help. I’m guessing that it’s very likely a seller’s realtor will present the offer to the seller, but at the same time counsel him/her to NOT accept the bid. I could waste a lot of time looking at properties with realtors.
I’m wondering if maybe the types of deals this realtor I know does are where it’s understood you’re not going to be bringing real low-ball offers. I’ll have to ask
Well like I stated earlier the Realtor will present the offer, always epect a counter on low ball ones. But hey, you might get one accepted.
Case I had one time… I had a listed property, the seller got transfer to another state with her work. Her house needed TLC and minor repairs. Anyway this was a LISTING…
Now after one month on the market she calls me and says reduce the price by 30K! I can’t make two mortgages. So I did and “zap” it sold.
This house was what I call way out in BFE, outside a larger city, but in a po dunck little town. Make sense?
this does make sense. thanks.
one thing I’ve been taught is the idea of sending out lots of low ball offers and maybe one will get accepted. I’m interested in this strategy, but one concern I have is "will a reputation start building among realtors that is deconstructive to future work I might be doing with them. I’ve always heard “you might insult them.” I know it’s business but at the same time I’m investing locally so I don’t exactly want to be the local gossip or in a local paper as someone who screws people over if you know what I mean.
thoughts?
Why do you care who does the negotiating as long as you get the property for the price that you need to get it for? Personally, if my dog can get me the deal done (and has the license to function as a negotiator), then I wouldn’t care.
Yes, you could make tons of lowball offers and hope that one bites. However, it’s much more productive to determine the value of the property and base your offer on real numbers to make a financially good deal for you instead of throwing a bunch of paint around and hoping to make a masterpiece.
Thing about lowball offers is sometimes you get what you pay for, especially if you don’t know what you’re paying for (don’t know the market, have the knowledge, etc). Once I had a new investor brag to me about the “great deal” he found for $10K. After showing it to me, he asks “what would you do with it?” To which I stated, “donate it to the fire department to burn, sell the land, and hope you don’t lose more than $1K on the deal.” After major rehab, including new foundation, about a year on the project, he got a great big $10K tax write off for the loss.
Raj
thanks for the insight. I appreciate it.