BiggerPockets

I've read that you should always have a realtor as part of your dream team. How can a realtor assist you? How much commision should you pay a realtor?

Working with realtors is a touchy subject here on BP.
Most investors on this site have found that building a healthy relationship with a realtor could be difficult.
For example, in the wholesaling business, I've found that every realtor I've interacted with became frustrated and tired of the whole putting in a 100 low ball offers and being rejected constantly.
I guess it all depends in what aspect of the business your in. Be upfront and let them know your in the business of making money and won't settle for half-ass work.

And manage your expectations property - meaning most realtors just don't get it. I know it may not make sense - heck - it doesn't make sense.

As someone here on BP said once if you find a good Realtor consider an informal marriage - they are that rare.

Not saying you can't find them but don't be afraid to play the field to find the one to marry.

Plus pay them - pay them well and often and don't ask for deals.

One of the things to look for in a Realtor is if they own properties themselves, if they do then they have a more open approach to investing. I am a Realtor because I was an investor first, so I understand what investors are looking for. Taking a finders fee can cause you to loose your license, so instead make sure you list with them at a reasonable commission on the next property. Making lowball offers is not that much of a problem, just don't get stupid like a few people I've tried to work with :cry: (lease with option to buy for a year, no money down, $1. earnest money with an offer of less than a quarter of the asking price, maybe I'll buy it in a year and I can back out at any time). The problem I have with some investors is they want to cut commissions so low, the other realtors won't even show the property. The commissions are split between the buyers and sellers agents and their brokers, so if they don't make money, :roll: they are not going to show your house to their buyer!

What a great question. I knew I should of promoted a class here in Denver more on Bigger Pockets. I taught a class on this very subject about one month ago with Bigger Pockets own Jon Holdman. I'm Jon's real estate agent.

I knew I should of video taped it. It was facts "not fluff" and lasted two hours.

Some great tips all:

I did like the one about owning property themselves.

The writing hundreds of lowball offers. LOL. If they are willing to do it, that's great.

It's about setting up expectations on both sides. I personally think most real estate agents are absolutely not a good fit. Find one that understands investing, wants to work with investors, and is able to handle the workload.

Mike - I like your ideas. I am a licensed Realtor and work almost exclusively as a buyers agent for my husband who is a investor/wholesaler and we are big advocates of using a Realtor for investing (especially as a BUYER).

Ask any newbie investor how to write up an offer or if they really understand all the terminology in a 40 page bank addendum and see what they say. Are they aware of any disclosures that should accompany the contract? The agent will handle your paperwork and correspondance, schedule the closing, meet the appraiser, etc, so that YOU don't have to. All you do is sign on the dotted line. Good Realtors should make your transaction headache and worry-free. They have MLS access, sales data, and can get you showing instructions quickly. They also make it a lot easier to bid on HUD and VA properties.

A few other thoughts:

-"Low-ball" offers are less offensive than you think. Bank sellers especially see them all the time. Most of our best deals started with low-ball offers, they are not always a waste of time!

-Don't be afraid to shop around for a Realtor...95% of them aren't going to have a clue about effectively helping you buy/sell investment property. A good place to start looking: try and find a Realtor that is a member of your local REIA, they are probably the one you want to know!

*side note: be careful if an agent gives you their login information/password for MLS access. In TN it is ILLEGAL and he/she could lose their license (not sure about other states.)

As an investor you won't need a Realtor on every deal, but they can be so helpful when you need them!

I'm not sure how to approach a realtor for assistance, as all I really want is their MLS access. As a beginner, I am just wholesaling, so there would be a lot of low offers, along with little commision. Since a finder's fee may not be kosher, what if I wrote up the offers and forwarded them thru the realtor to sign and forward to the seller? They get their commission, do nothing but sign and fax, and give me MLS access.

Maybe I could post an ad on Craigslist? Is it unethical to outright ask for their mls access? Is that something that is more hush-hush that should be approached once you have a conversation with them?

This is an update to an earlier thread I posted on this topic. My buyer agent isn't answering e-mails or voice mails. I'm now going to listing agents of REOs who seem to be very responsive.

Shannon, I like some of what you have to say, but its obvious that you are a realtor.

Most realtors don't read or understand the bank's addendums either. I'm the type of person that actually reads the addendums and I've never gotten more than a blank stare when I ask any realtor a question about them.

And if you are making an offer on listed property, the listing agent will make sure you sign the proper disclosures.

I am all for working with realtors, but I would also recommend that as an investor you should learn your state's standard contract and contract laws. A Law of Contracts class at a local community college or online course would be a good investment of your time and money.

In reference to putting in offers on HUD properties, you normally have to use a realtor. In my region you can NOT make an offer on HUD's without a realtor.

If an agent does NOT give me access, I won't be working with them long term.

"ILLEGAL" is a strong word thrown around by realtors way too much. A realtor "could" lose their license for running a red light, but they aren't going to. I don't know Tennessee licensing law but I seriously doubt their licensing act addresses MLS access. Normally the MLS is hosted by a local association of realtors and they normally do NOT have the authority to suspend a realtor's license. Now the local association can suspend a realtor from the association (i.e. MLS access), but that does not mean they would lose their license.

Now if a realtor is being charged $3 an hour for the MLS then I would lean towards compensating them in one way or another for that access.

As Bienes shared, realtors normally have little or no understanding of what a good investment is. They think in terms of appreciation because its an easy sell for them, but its bad business for 95% of investors. If you are letting anyone else make your business decisions for you, you won't be in business long. Your focus needs to be to learn this business well enough that you are not dependent on someone else's opinion. Maybe you will need information from someone (i.e. comps from a realtor), but you need to get to the point that you do not need their opinion on whether something is a good deal or not. What most realtors "think" is a good deal is a total loser for most investors.

Inform and educate yourself, so you will be adequately equipped to make knowledgeable choices about your investing.

Lol, so I sacrifice my integrity by asking for MLS access? Wow, right off the cliff with that one.

I have NEVER screwed any realtor or investor, and there have been multiple times I have gone way above and beyond financially to make sure that no one might feel like they got screwed.

Yes, there are multiple realtors that I work with that have violated their sacred oaths of secrecy to the MLS God and I STILL trust them.

Yes, I will ask you to cut your commission, yes, I will ask for your MLS access even though its against the rules, and, yes, I will ask you to sacrifice your first born to the Dark Side.

Funny thing, though, my reputation and integrity is still intact. 6 years and 250 houses later and I'm still going. I do feel a little dirty, though, but I always do after I've been talking with realtors. :goofy: