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Finding Buyers for Flipped Properties: Questions for Flippers/Investors

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John Ellis

Real Estate Investor from Mentor, Ohio

Dec 30 '12, 04:59 PM


For the past year I used a realtor to sell my properties. I like her she does a good job and only charges between 1-2%. However, the buyers agent will also a percentage of 3-4% Therefore, I feel I am losing 4-6% of profit. I also read about flippers finding buyers before they even have house finished. My question is two fold.

1. Do You (Other Flipper) use a realtor? If no could you please answer question 2.

2. What is your method to finding buyers?



John Ellis, Great Neighborhood Properties, LLC
Telephone: 866-389-1864
Website: http://www.greatneighborhoodproperties.com


Eric Thomson

SFR Investor from Conroe, Texas

Dec 31 '12, 12:45 AM


Having your property on MLS is important. You can check around for an agent/broker that will charge a flat fee to put your listing on MLS and you handle the listing. You would still likely be paying 3% to the buyer's agent.



Jon Holdman Moderator

SFR Investor from Wheat Ridge, Colorado

Dec 31 '12, 08:32 AM


If you don't put it on the MLS, you'll greatly reduce your pool of potential buyers. That's likely to costs you more than the RE commissions.



Jon Holdman, Flying Phoenix LLC


J Scott Moderator Donor

Real Estate Investor from Ellicott City, Maryland

Dec 31 '12, 08:35 AM


My wife and I both have our real estate licenses, so we save on the seller's side of the commission (and the get the buyer's side when we buy).

As for paying the buyer's agent, I consider that an expense you can't really get around. While you can market off the MLS, you'll be reducing your buyer pool by a tremendous amount (my guess is that you'd lose about 90% of serious buyers).

Consider the 3% you pay to the buyer's agent to be the cost of acquiring a customer...for many industries, 3% cost of customer acquisition really isn't too bad...



Medium_lishproplogoJ Scott, Lish Properties, LLC
E-Mail: [email protected]
Website: http://www.123flip.com
CHECK OUT MY BIGGERPOCKETS BOOKS: http://www.biggerpockets.com/flippingbook


John Ellis

Real Estate Investor from Mentor, Ohio

Dec 31 '12, 10:28 AM


Thanks for the input
@J Scott I agree but as I talk with other investors they seem to have end buyers lined up and I never understood how. With all the homes you sell, do you have to put your house on the MLS or do you have buyers already lined up?

@Jon Holdman I love the MLS and I agree with the exposure but I was trying to have house sold before it was even listed.

Overall I was trying to cut out the 6% I pay to both the seller and buyers agent. It might not be possible but what a great thing it would be to buy a house begin work on it and have a buyer in place. I would never even have to put it on the market. Not sure if this is possible or if this is just a dream every investor has.

If anyone has any experience having a buyer before they list the property on the MLS or even before the house was finished I would love to hear about it.



John Ellis, Great Neighborhood Properties, LLC
Telephone: 866-389-1864
Website: http://www.greatneighborhoodproperties.com


Xing Zhu

Durham, North Carolina

Dec 31 '12, 10:42 AM


(1) Get on MLS.
(2) Promise to pay 3% to buyer's agent.
(3) Promise to give 2% rebate to the buyer without an agent.



J Scott Moderator Donor

Real Estate Investor from Ellicott City, Maryland

Dec 31 '12, 10:43 AM


Originally posted by John Ellis:

J Scott I agree but as I talk with other investors they seem to have end buyers lined up and I never understood how. With all the homes you sell, do you have to put your house on the MLS or do you have buyers already lined up?

I often have buyers lined up...but they're coming to me from their agents who I have an existing relationship with. Their agent is entitled to their commission even if they bring the buyer prior to my listing on the MLS.

Unless you're wholesaling, doing lease options or doing some other type of creative financing where you don't need qualified buyers, I don't know of any other way to find buyers on a consistent basis.


I would never even have to put it on the market. Not sure if this is possible or if this is just a dream every investor has.

If anyone has any experience having a buyer before they list the property on the MLS or even before the house was finished I would love to hear about it.

Again, it's not hard to find qualified buyers prior to your rehabs being complete, but they'll generally come through real estate agents, who are the primary conduit for qualified buyers in today's market. Also, you'll need a great track record to attract buyers prior to rehab completion -- we'll generally not show an incomplete rehab to a potential buyer until they've seen a fully remodeled similar property that we have. If we don't have any available properties to show them that have been full rehabbed, we won't show them the partially finished rehab, as most buyers don't have the ability to envision what the end-product will look like without seeing it.



Medium_lishproplogoJ Scott, Lish Properties, LLC
E-Mail: [email protected]
Website: http://www.123flip.com
CHECK OUT MY BIGGERPOCKETS BOOKS: http://www.biggerpockets.com/flippingbook


Will Barnard Moderator Donor

Real Estate Investor from Santa Clarita, California

Dec 31 '12, 10:50 AM
1 vote


@John Ellis - You will likely not be able to "cut out" the costs of selling your flip. While some get their license and avoid the list agent fee, some use flat rate listing services, you will not get around having to pay the buyer's agent fee (if you place on the MLS which is necessary).

Now, on to lining up buyers before you have to list. This is done in many ways. When you are in the middle of a rehab, you can place a yard for sale sign with your contact info and take any and all calls from potential buyers that call on your sign. You can direct market to people. You can place internet adds to attract buyers. You can ask everyone you know for referrals of anyone looking to buy a home. The list goes on. I have sold a few properties before I was done with the rehab, however, in each case, I still paid a buyers agent. With that said, what I saved was holding time saving costs and thus, increasing my profit margin.

If your deals are so tight that you need to save the 5% on agent fees, you do not have good enough spreads. If you are simply wanting to increase your spreads even more by eliminating these costs, I would say that you would be better served as a RE investor by getting more deals and more funding for your deals rather than concentrating on saving RE commissions.



Medium_be_logoWill Barnard, Barnard Enterprises, Inc.
E-Mail: [email protected]
Website: http://www.barnardenterprises.com
http://www.InvestorExperts.com


Sam Craven

Real Estate Investor from Houston, Texas

Dec 31 '12, 11:38 AM


When we list properties we that came to us as a result of our marketing we flat fee list it and gladly pay the 3% to the buyers agent.

If the property was brought to us BY a realtor, not only do they get the commission when we buy it, but they get to list it after we are done with the renovation. We only do this for realtors that understand our criteria and are actively looking for properties for us.



Medium_solid_logoSam Craven, Senna Homes
E-Mail: [email protected]
Telephone: 832-722-4815
Website: http://www.sennahomes.com
Investing in Houston Real Estate


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