BiggerPockets

Do people use a buyer's agent to find REOs? I can see the use of having MLS access for comps, but, since REOs are a #s game, what's the incentive for a buyer's agent to make 30 or 40 offers for you to get a 3% commission on, say a $40,000 house? Would it be better to skip the buyer's agent and deal directly with the REO's listing agent?

Other than the unresponsive/unprofessional agents out there, I totally disagree. Using a buyer's agent to get great deals on REO's is like using an oven to store your ice cream (it just doesn't work). I am not saying you can not ever get one, but what I am saying is going direct to the listing broker/agent is a much better avenue.

Here it is in black and white, will a listing agent pay more attention to an investor coming in with an offer for the agent to double dip commissions, possibly tripple dip, or one who comes in with a buyers agent where their max is 3%?
The truth is, the top REO agents are looking for the top RE investors with all cash who can come in and give them double dip opps along with repeat business. Money talks! (and this all comes from actual real life experiences and not hypotheticals or assumptions)

Dude, another GREAT post! I completely agree with the above comment. We specifically target the listing agent. I am a licensed realtor, but I dont take any commission. I just give it to the listing agent....what happens there? They get the full commission, they work with you till the end, you just built a great relationship with an agent who will give you properties not listed yet (hint, hint), and it becomes an open door for you.

I have a great relationship with the agent we just closed a deal with last week. She has given me so far atleast 20 properties before they do the BPO, before the tenants are out, before anything. By the time I have a buyer for it, she is giving me the price and I set it up to wholesale it and its done.

Stick w/ the listing agent....but in your case if the buyers agent is working for you, continue to do your thang!

just my 2 cents! :mrgreen:

Ideally I would like to deal with the listing agents directly , but it seems that some of these listing agents don't really want to deal with you unless you have an agent. Pretty frustrating and kind of dumb since it means less money for them.

That is pretty ridiculous about your buyer's agent insisting that you offer full price because the "discount is priced in" ...you are supposed to trust that ALL REOs are priced EXACTLY at what they 'should' be?

You are right though, 75k for something that rents for $900 is not a good deal..at least cash flow wise.

You can make a lot of lowball offers, but expect that many will be rejected.

Make sure you understand the comps for the area well.

This is confusing, about half the people think it's a great idea, the other half that it won't work.

As for the addendum, I assume I could just have my lawyer look at it the first time or two, until I get the hang of it?

If the listing agent is operating as a transaction broker, there shouldn't be any problems with representing both sides, correct? Would I be able to get the agent to run comps?

It depends on a number of things, with these two being the biggest questions:

- Is the listing agent willing to/allowed to work with buyers?

- Is the buyer experienced enough to not need to be represented by their own agent?

As for the addendum, I assume I could just have my lawyer look at it the first time or two, until I get the hang of it?

Sure. But, if you're going to pay a lawyer to represent your interests, why not let a buyer's agent do it for free?

If the listing agent is operating as a transaction broker, there shouldn't be any problems with representing both sides, correct?

Incorrect. Most brokerages do not allow their agents to perform dual representation (representing both the buyer and the seller).

That doesn't mean that the agent won't write up an offer for you, submit it, and broker the deal...they just won't be representing YOU. They will be representing the seller, and that means that everything they do, they will legally be trying to get the seller the best deal.

All they would do for you is follow your instructions for writing up the offer, submitting it, negotiating it, etc. If you suggest something that's not in your best interest, they won't care (in fact, they'll likely be happy about it).

Would I be able to get the agent to run comps?

Of course, I know that some people here work directly with listing agents, so maybe other places/agents are different, or maybe they just have good relationships with the listing agents.

Bienes,
My advice is keep looking for a buyers agent that will do what you want and need.
Most of the time, the commission is already set when the property hits the MLS. If you go directly to the listing agent, he keeps it all. If you use a buyers agent, they split the commission and the cost is the same to you in either case.
I had to go through multiple agents to find the one that was going to work out for us.
There are a lot of hungry agents out there. Find one that will work for you.
Good Luck
Chris

There will be issues with the offer, issues with negotiating, issues with addenda, issues with the closing, etc, that will be completely different with REOs...so having someone familiar with the process will be very helpful...

Thank you JScott, and Chris.

It's probably best to try a buyer's agent for the first one. So you don't have your lawyer look at the addendum? When I bought my own house (for me) from a retail seller, I had my lawyer look at the contract, title stuff etc. even though I was using a buyer's agent.

What about establishing a relationship with a top REO seller's agent and getting access to properties before they hit the MLS--is that done with a buyer's agent, or best done on one's own?