I have recently restarted to look for a property with a new realtor.
I asked the Realtor to put in two offers for me.
One was 80% of the asking price of an IndyMac owned house that was listed for 196,000
The other offer was 83% of a Condo owned by ABN AMRO
that is listed for 179,900 This property has 2 morgages and an equity loan involved which says to me the closing timeframe will be very long. The morgage loans and equity loans are from different Banks.
My question is ..........
Is offering 80% of a list price on a Bank owned property too low ???
I dont think it is !
And I am so tired of snooty Realtors.
The Realtor has spent less than 2 hours of her time with me. Both properties were within 5 miles of her office.
It's not like I am dragging this poor Realtor all over the place.
I basically told her to have both offers ready by Friday at the latest. She then tried to scare me by saying what happens if both offers are accepted , which doesnt scare me in the least . I think I did a petty good job of not telling her off, mainly because I am polite enough not to fight with an elderly woman Realtor.
So to reiterate, am I being unrealistic or wasting the Realtors time ???
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
17y
Originally posted by Rob Rey:
I have recently restarted to look for a property with a new realtor.
I asked the Realtor to put in two offers for me.
One was 80% of the asking price of an IndyMac owned house that was listed for 196,000
The other offer was 83% of a Condo owned by ABN AMRO
that is listed for 179,900 This property has 2 morgages and an equity loan involved which says to me the closing timeframe will be very long. The morgage loans and equity loans are from different Banks.
My question is ..........
Is offering 80% of a list price on a Bank owned property too low ???
I dont think it is !
And I am so tired of snooty Realtors.
The Realtor has spent less than 2 hours of her time with me. Both properties were within 5 miles of her office.
It's not like I am dragging this poor Realtor all over the place.
I basically told her to have both offers ready by Friday at the latest. She then tried to scare me by saying what happens if both offers are accepted , which doesnt scare me in the least . I think I did a petty good job of not telling her off, mainly because I am polite enough not to fight with an elderly woman Realtor.
So to reiterate, am I being unrealistic or wasting the Realtors time ???
TY for any response you might have ???
.
.
.
Wow.... You're pretty nice to your realtor. lol I have been known to make mine take me through 22 houses in one day. I had him take me through 10 listings 2 days ago. I have been known to offer 40-50% of list price and my realtor knows now that I'm just nuts and he may as well submit it. For a while he tried to tell me he couldn't do it and my standard reply was "Really? Wow.... I though you were 'the man'?" :D Use their ego as an asset.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
17y
You need to find an agent who has sold a ton of REO properties. These agents understand what typical REOs in the area are going for and can help you determine where to start (and end) your negotiations with the sellers.
Additionally, good REO agents know the REO listing agents, and can make a 2 minute phone call to ask the listing agent how flexible the seller is. My wife is my agent, and there have been many times when she's called the listing agent to ask about a property and the agent has basically said, "Just make an offer...we haven't gotten a bite on this one in 3 months...at this point, the bank is willing to consider anything."
Lastly, a good REO agent is going to understand the process, will get the paperwork right the first time (and not piss off the listing agents), will help you understand the addenda that come with the contracts, and will help you deal with the nuances of the REO process.
Real Estate Investor · MS · Member since 2008 · 4 posts · 0 votes
17y
I understand your issue if the agent was getting snippy. I have no patience for people like that and wouldn't hesitate to report one to the board if they did something wrong on purpose.
I can't speak for the agent you dealt with but I can speak from experience from a brokers point of view. My wife is a broker. She does everything she can to make her client succesful. She has dealt with "investors" who don't know what they are doing, don't do any research and expect you to many offers with no chance of getting accepted (I'm not implying this is you). Your in this to make money and so is the agent.
I get the impression some of you don't realize the amount of time and effort that goes into making a offer. You need to check into it before you run off at the mouth. It takes alot of work to submit an offer that covers all the bases and protects the buyer. If you think its so easy, go get your license and make your own offers. Otherwise, pick a good agent/broker and explain your situation and/or goals and work together as a team to make both of you money. You will save yourself and the agent alot of wasted time and energy if you do this.
Real Estate Investor · MS · Member since 2008 · 4 posts · 0 votes
17y
Originally posted by J Scott:
You need to find an agent who has sold a ton of REO properties. These agents understand what typical REOs in the area are going for and can help you determine where to start (and end) your negotiations with the sellers.
Additionally, good REO agents know the REO listing agents, and can make a 2 minute phone call to ask the listing agent how flexible the seller is. My wife is my agent, and there have been many times when she's called the listing agent to ask about a property and the agent has basically said, "Just make an offer...we haven't gotten a bite on this one in 3 months...at this point, the bank is willing to consider anything."
Lastly, a good REO agent is going to understand the process, will get the paperwork right the first time (and not piss off the listing agents), will help you understand the addenda that come with the contracts, and will help you deal with the nuances of the REO process.
Real Estate Investor · Virginia, DC &, MD · Member since 2008 · 261 posts · 71 votes
17y
Originally posted by Tray B:
I get the impression some of you don't realize the amount of time and effort that goes into making a offer. You need to check into it before you run off at the mouth. It takes alot of work to submit an offer that covers all the bases and protects the buyer. If you think its so easy, go get your license and make your own offers. Otherwise, pick a good agent/broker and explain your situation and/or goals and work together as a team to make both of you money. You will save yourself and the agent alot of wasted time and energy if you do this.
Even if it wasted 2 hours of her time for a $5,000 commission- I'd say that is a pretty good return. I don't know about you but $2,500 per hour is nothing to complain about.
No matter what business it is there is always wasted time. It's a normal part of doing business.
Real Estate Investor · Las Vegas, NV · Member since 2008 · 4 posts · 0 votes
17y
If you are not embarrassed by your first offer it's too high. An agent must submit an offer and more than likely the bank will counter offer. I bough a property that the bank wanted 64,900, my first offer was 15,000 and it did not need any major repairs, I just wanted to see were they would go. After two counter offers i finally purchased the property for all cash 37,000 and flipped to another investor for 50,000. He painted the house and repaired the broken windows and replaced the carpet. It took him 2 weeks and now rents the property for 1,000.00
I did do the purchase with the listing broker so maybe that also helped.
SFR Investor · Phoenix, AZ · Member since 2009 · 484 posts · 181 votes
17y
"Today, I've got a great relationship with an agent who gives me the codes to all his houses. Of course, I've bought two properties from him so he knows I'm real (and that I don't pay close to asking). But he'll also continue getting my business."
FYI - in my area, giving out lockbox codes gets your mls access turned off and a hefty fine.
To the O.P. -Unless you can perform on two purchases, you shouldn't be writing two offers at a time. Your realtor owes you loyalty, but has a legal obligation to deal fairly with sellers too.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
17y
Originally posted by Mark Hall:
Your realtor owes you loyalty, but has a legal obligation to deal fairly with sellers too.
Incorrect. Your realtor has a legal obligation to deal *legally* with sellers, not necessarily to deal fairly (assuming you're not be unethical by the standards of real estate regulation).
Putting in multiple offers when you may only be able to close on one is not illegal, and in my opinion, is still well within ethical boundaries.
In fact, most standard contracts have boxes that ask, "Is the buyer under currently under contract with another property?" and "Does the buyer have the right to put another property under contract?" The realtor does have an obligation to ensure that this information is correct to the best of their knowledge.
SFR Investor · Phoenix, AZ · Member since 2009 · 484 posts · 181 votes
17y
Originally posted by J Scott:
Originally posted by Mark Hall:
Your realtor owes you loyalty, but has a legal obligation to deal fairly with sellers too.
Incorrect. Your realtor has a legal obligation to deal *legally* with sellers, not necessarily to deal fairly (assuming you're not be unethical by the standards of real estate regulation).
Putting in multiple offers when you may only be able to close on one is not illegal, and in my opinion, is still well within ethical boundaries.
In fact, most standard contracts have boxes that ask, "Is the buyer under currently under contract with another property?" and "Does the buyer have the right to put another property under contract?" The realtor does have an obligation to ensure that this information is correct to the best of their knowledge.
I'm not wrong sir, you are. There is no real estate "offer" form, there is a purchase contract. By your logic, the seller could "accept" multiple offers, hoping for buyers to back out before closing( that's what the O.P admitted he was doing as a buyer) .
If a seller did this to you as a buyer, would you get your panties in a bunch? Call a lawyer perhaps? Possibly sue the seller's agent for dealing unfairly with you and stringing you along?
Good luck with your "business", I suspect you'll need it - and an attorney, if you conduct yourself in this manner.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
17y
Originally posted by Mark Hall:
I'm not wrong sir, you are. There is no real estate "offer" form, there is a purchase contract. By your logic, the seller could "accept" multiple offers, hoping for buyers to back out before closing( that's what the O.P admitted he was doing as a buyer) .
If a seller did this to you as a buyer, would you get your panties in a bunch? Call a lawyer perhaps? Possibly sue the seller's agent for dealing unfairly with you and stringing you along?
Actually, this would be breach of contract, which is illegal, and as I pointed out above, all agents have the responsibility to abide by all laws when transacting real estate. I NEVER said that an agent can or should ever break the law; they SHOULDN'T.
If your statement (that a buyer's agent "has a legal obligation to deal fairly with the sellers too"), then legally my buyer's agent would have a responsibility to refuse to submit any offer to the seller that the agent would deem unfair.
Is that your contention? That legally the buyer's agent must refuse to submit an offer if he deems it unfair? If not, then your original statement must be incorrect.
Buyer's agents have a fiduciary responsibility to the *buyer*, and no responsibility to the seller, other than legal responsibilities.
Good luck with your "business", I suspect you'll need it - and an attorney, if you conduct yourself in this manner.
My business is tremendously successful. The big reason for that is that my agent (my wife) has forged tremendously strong relationships with all the big REO listing agents in the area.
Those relationships weren't forged through "fairness" (is it fair that we typically offer about 70% below market value on properties?); those relationships were forged on integrity and trust.
The listing agents don't expect us to be fair and to ensure that their clients get a good deal -- that's THEIR responsibility, and why THEY get paid.
Let's be clear. I take advantage of sellers every single day, by buying properties at $.30-.40 on the dollar. Is this fair to the sellers (the banks)? By your standards, it's illegal if it's not fair; but I've yet to be sued for submitting offers well below market value.
In fact, if I offer closer to market value, I can't make a living, so my entire business relies on my being unfair to sellers. I think most other successful investors would agree.
BTW, if agents were legally required to be fair to the other party's client, why exactly would we need both listing AND selling agents? And why wouldn't all buyers and sellers just go with dual agency agents?
Apparently, NAR disagrees with your assertion that fairness is legally required on the part of agents to the other party.
Residential Real Estate Agent · Costa Mesa, CA · Member since 2008 · 1k+ posts · 380 votes
17y
Back in my newbie days I simultaneously put in 14 offers for an "investor" that had the capability of closing on exactly 0.
Besides the obvious lesson in vetting your buyer, this taught me that you can write as many offers as you want as long as you aren't waiving contigencies.
As for the lockbox thing... its a bit tougher here in OC because most properties have electronic lockboxes, although a lot of REOs don't. I see that being kind of a moot point though, because I (gasp) generally like to be there to discuss the property with my client.
Rehabber · Tucson, AZ · Member since 2008 · 1k+ posts · 802 votes
17y
It is not strange to see an agent trying to put on a dog and pony show; it is strange to see him try his act in a forum of real estate investors. Real Estate agents should never claim there industry is one of fairness. It is one of transactions!
Is it fair that an REO agent telephoning investors to submit lowball offers so his client can submit a slightly less lowball offer in order to keep a 6% commision at home?
Or agents padding BPO's in order to get noticed by asset managers.
Or, how about a Broker who charges an ABC fee to both the seller and a buyer?
Or a listing agent and a buyer's rep working for the same real estate team?
How about that purchase contract REALTORS use? All that thing does is protect the Broker.
As a former agent myself, I have seen the corruption in this industry first hand. Brokers collaboratong with in- house lenders and title companies; that is simply collusion and, in my opinion, these incestuous relationships contributed significantly to the commoditizing of the real estate transaction and the rapid ascent and consequent fall of real estate values.
If not for the powerful lobbyist that NAR is, and the fact that states real estate boards are under budget contraints, I believe there would be more brokers being fined for RESPA and state law violations. As it is now, there are just a few, mostly regional brokers who are just getting a slap on the wrist.
Obama and Senators claim financial instituitions and Wall Street need stricter reforms, well the real estate industry is in desperate need of regulation too.
Real Estate Investor · sydney, nsw · Member since 2009 · 74 posts · 7 votes
17y
hi all
i like a bit of banter and thats what boards are for and in aussie we are all for a bit of disagreement thats waht makes us a bit different we can get in and don't mind the odd fight
but with real estate I find that you have three types
one you like and they will submit your offer ( and 80% is way up on my dial I am at 30 to 50% so you are a bit high for me)
the next is the one that work for the vendor ths one you have to sit and have coffee and negotiate a deal( this one I like as this is horse trading at is best)
and then theres the forget it they will offer nothing
so what do you do
simple set the first one after the deal
sit down with the second over a coffee.
and tell both what you want and set them both to go and get it
you don't have dog and chew the bone yourself
you want a deal send people to go and get it its thats simple
and if the number one and the number two you don't think can do the deal and my number ones and two can
the find a new number one and two
I send people after deals in the same office never mind the same state
and anyone that tells me that the buyer is not in command in any market is sorry you are buying in the wrong market.
a person that want to buy a car, a boat, a ship, or a house is a buyer
and if you are a seller you want that person
price is a very different thing
as price is an amount that a buyer and a seller is willing to accept
and for me thats not just money thats a value or a commodity but thats a very different question or post
is your offer low or not acceptable
simple answer
is the vendor going to accept it
if yes no its not to low
if no yes it was to low
its thats simple and
a real estate is just a conduit to a deal
and if a real estaate has problem with that well
they are the same as waiter has a problem with a bad client thats come with the job.
one thing I tell my real estates and a few need to understand from what I have already read is that
investors don't buy one property they buy a few
so if you like investors you make more commissions
if you don't you miss out on commissions
and what pays your wages or your income commissions
my real estaet and I think the ones there will want to not only open doors and give key but open at 12pm if we need to or we will find some one that will.
oh and here my real estate have picked up at 6am and work till 12 pm to do our deals and I expect that from them
so 80% is that unrealstic
is 50% and up til 12pm to do the deal unrealistic
not sure
and yes if the real estate does not find the deal I want I find a real estate that will
real estate need to get an income but they also have to work to get that income and the best way for them to do that is with business and investors
but that just my .002 and Im here in sydney so just looking at your neck of the woods
Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
17y
My experience tells me Steph on page 1 of this thread has some great advice.
For the first 5 years I did this biz I was not a realtor and I ONLY worked with the listing borker to give them both sides of the deal - and to be honest 10 out of 10 times they would give me the lockbox - even if I never did a deal with them.
Not saying it is right or wrong for them to do so - just agreeing 100% with Steph.
After my first 5 years I became a realtor only because my lawyers said I should and of course no issue now.
But I NEVER write an offer with anyone but the listing agent - I find (no matter what they are supposed to do) my offers get accepted way more this way - and yes - I have tested it :)
Residential Real Estate Broker · Conroe, TX · Member since 2008 · 1k+ posts · 43 votes
17y
Your offers are not too low. Find another agent. One who considers your financial goals above the sellers.
I wouldn't write an offer on each considered property. Houston has plenty of available inventory. But, here again, this depends on your individual market,
Occasionally, I'll get an agent who says that they only respond to written offers but, usually a tickler phone call or e-mail like the following is sufficient. i.e....
Hi (Selling Agent),
I'm working with a client who has expressed an interest in your listing. He wanted me to ask you if the sellers would consider an offer 35% less than the asking price. If so, let me know and I'll get you a contract right away.
The amazing thing about the email above is.......some agents say yes they might consider it. These are the houses that I show.
Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
17y
Just a quick question:
What is the success rate of pray and spray offers at 50% below list on REO properties? I see a success rate of zero in my day to day activities at my REO office. Usually you have to wait until the asset is aged or the previous deal fell through and they reduce the price etc.
Just want to understand, because as an agent, if the success rate is tiny, I wont waste my time for a $2000 commission check.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
17y
Originally posted by Anson Young:
What is the success rate of pray and spray offers at 50% below list on REO properties? I see a success rate of zero in my day to day activities at my REO office. Usually you have to wait until the asset is aged or the previous deal fell through and they reduce the price etc.
Just want to understand, because as an agent, if the success rate is tiny, I wont waste my time for a $2000 commission check.
In my experience, the success rate is near 0%. Of course, this is for my specific area, my target properties, etc. Other areas and other types of properties may see higher success rates.
What is successful though (for me, at least) is making low offers over and over on the same properties as they continue to drop in price.
For example, a couple months ago I made a $58K offer on a house listed at $105K. When it dropped to $89K, I made an offer of $52K. This went on and on until the price finally dropped to $64K and I picked it up for $44K.
I didn't buy it for less than 50% of the current asking price, but it was well below 50% of the asking price when I first started bidding.
This is the method I've used to purchase about 60-70% of my properties...
Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
17y
Originally posted by J Scott:
Originally posted by Anson Young:
What is the success rate of pray and spray offers at 50% below list on REO properties? I see a success rate of zero in my day to day activities at my REO office. Usually you have to wait until the asset is aged or the previous deal fell through and they reduce the price etc.
Just want to understand, because as an agent, if the success rate is tiny, I wont waste my time for a $2000 commission check.
In my experience, the success rate is near 0%. Of course, this is for my specific area, my target properties, etc. Other areas and other types of properties may see higher success rates.
What is successful though (for me, at least) is making low offers over and over on the same properties as they continue to drop in price.
For example, a couple months ago I made a $58K offer on a house listed at $105K. When it dropped to $89K, I made an offer of $52K. This went on and on until the price finally dropped to $64K and I picked it up for $44K.
I didn't buy it for less than 50% of the current asking price, but it was well below 50% of the asking price when I first started bidding.
This is the method I've used to purchase about 60-70% of my properties...
Thats how I pick mine up to, but I never see a home listed for $106k sell for $44k from the get go. Hence, pray and spray, hope one catches. I had a good feeling it almost never happens (with bank properties, normal sellers maybe?).
Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
17y
Originally posted by Aly L:
Scott, now that you're an agent, do you get the buyer's agent/dual disclosed agent commission?
Aly
Hey Aly - I do not take the commission - I give the listing broker both sides of the deal. I really try to avoid tripping over the dollars to get to the pennies :)
As for success rate at 50% below list - I would say close to 0 - I really don't base my offers on a %age of the ask - I look at the deal and figure out what I can pay then go down from there.....
Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
17y
Thanks Scott. I'm guessing the listing broker gets the full commission minus what your broker gets from your side? I recently activated my license full time and haven't dealt with this yet.