BiggerPockets

Has anyone of you ever done this before?

Instead of using a buyer's agent, have you submitted your own offer directly to listing agent using your own contract (not drafted by a realtor)?

If you find the property because it's being advertised in the MLS, the listing agent will be due a commission when you buy it - you won't be saving anything, and you might get run over by an agent who is dutifully representing the seller, or, depending on the state, you might have an agent who becomes a "dual agent", which is shorthand for "does nothing to help either party"...

not sure why you'ld want to be in either situation... :cool:

To add to what Mark said every property listed in the MLS has a coopting commission stated. Which means they will pay your Buyer's Agent to represent you. This means that even the seller and their agent have agreed that you need someone to represent you who is not the listing agent and they will pay this person for you. Why would you not take advantage of that? It's the only time (except for a public defender) in this country where someone will pay to make sure your interests are represented even when it may collide with what they want.

As for the contract, try it, there's all kinds of half wits out there in the world who may bite. What you have to remember is that if the contract itself has incorrect verbage that puts the seller in danger that would be the listing agents fault and one deal isn't worth losing their license. I can honestly say if I was the listing agent in that case not only would I not accept the contract, I'd rewrite it with all the bells an whistles. I'd also juice every last point I could in my clients favor.

There is no reason for you that you should not to use the buyer's agent:
1. they have access to inventory you don't even know about.
2.they can protect your rights as a buyers
3.they get paid from the seller's (all commission is paid out of the seller's agreement w/ the selling agent anyways, then they offer a split usually 50% of what they are hired for to sell the home)
4.The only way you can access the MLS is if someone gave you their user name and password which is unethical and illegal and will warrant a fine to that agent.
5. The agents usually have a mutual respect with one another

John I have heard that argument many times and it is misinformed.

First many attorneys are per hour and bleed you dry in the end.It's there operating structure to start low and keep billing and billing.

Second the seller commission agreement is spelled out in the listing agreement.The listing agreement usually says selling broker to share a co-op of XX with the selling broker.

If it is not shared then by the agreement the full commission goes to the selling broker.Usually the listing agent if they are not the principal broker owner are working on behalf of the main broker.

So the listing agent does not have the authority to reduce their own commission.For example if a listing agent was to make both ends at 6% it could spell any reduction in commission will come off of their end.

So I as a broker have an agent on a 50/50 split.100,000 sales price at 6% = 6,000 commission.The agent wants to reduce to 4% to get the deal to go through.In my independant contractor agreement I have them sign the split will be based off the total commission agreement before any discounts.

In this case I would base it off of 6,000 getting half or 3,000 leaving the listing agent 1,000 before there expenses.In this case they would almost be working for free.

John the seller has to pay the total amount of commission agreed to in the contract.We even have protection periods built in where we are still owed a commission if the seller tries to terminate unless they sign with another broker.

This eliminates all the wait until it expires or say you have taken it off the market and we will do a back door deal.

This is the number one mistake investors and buyers make.Broker and agents who do business this is not our first rodeo.We have seen all the schemes and ploys by buyers.

I believe if buyers spent half the time getting their affairs in order to be able to purchase instead of trying to figure out how to screw a broker/agent they would get much further ahead.

Smart investors do not even mention commission to listing agents.They just want the deal and say "thank you!" you can have it all I just want the property.

Seasoned investors know what they want to pay and just want the deal.They want to learn of properties in advance and off market deals.When I look at purchasing for myself I let the listing broker keep it all even though I am a broker.I make much more off the deal and understand how the business works and how little they will be getting.

If you are out after getting their commission or reducing it you go to the bottom of their marketing list to sell too.

If you are an investor that will buy through them and they will double end you can go to the top of the list.If you are a broker like myself and the other broker/agent knows I will let them keep it all plus handle my end of the deal as I am in the business then that is even more appealing to them.Of course the offer plays into it but these other factors count big as well.

I have plenty of investors who want me to keep it all and the other investors I give the scrap listings to last if nothing has sold.

Next time you order pizza think about this.Drivers can take 3 to 4 deliveries at a time but mostly 2.If you order at a busy time they will be taking 3 to 4. When they leave the store they are supposed to take them in order from time.

What happens in the real world is the tippers who tip 4 to 5 bucks get it first in 20 minutes as the driver wants them to keep ordering.The driver delivers to the person who tips 1 to 2 bucks last because they are cheap and the driver hopes with a luke warm pizza they won't order as much or go away all together.

I know this because I was int he restaurant business for over 10 years.

If you are cheap or try strategies that burn bridges it will catch up to you and cost you way more in the long run.

If you are doing a one off deal where you buy and house to live in for 5 to 10 years then it is not as much to worry about.If you are buying properties in an area as an investor you want to develop a good rep.You will drive a great price when you buy but there is a nice way to do it and another way that will get you remembered in a bad way for a long time.

Hope it helps from years of experience in the business.

You can't know for certain unless you ask the seller directly...and for REOs, it's nearly impossible to find out for certain, unfortunately...

A good listing agent would take an offer on a non-state contract and -- with the guidance/agreement of the Seller -- just write a counter-offer on a state contract and present it back to the potential buyer.

This solves the contract issue in a legal way (as opposed to not presenting the offer)...

John what most of my REO broker friends do is save a screen shot of the portal showing it's been submitted as proof.

They DO NOT have to do this to appease a buyer but some do anyways rather than get umpteen calls not believing they have submitted it.

So you can try and ask for some documentation but you have no control.

Best thing to do is make your offer most favorable with the things I talked about earlier with the least conditions and see what happens.You can only submit your best and if someone else is willing to do more or pay more you simply move to the next deal as you can't control it.