Real Estate Deal Analysis & Advice

3 Constructive Ways to Work With a Real Estate Agent as an Investor

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Some investors are adamant about not working with real estate agents. They don’t like them, see them as the enemy, and won’t even consider doing a deal where one is involved. The same is true for many real estate agents when it comes to investors. They’ve heard all the bad stories, have been burned by newbies who have no idea what they are doing, and feel they are wasting their time and reputation by constantly fielding unrealistic lowball offer for investors who may not even really be qualified to close.

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But there are collaborations that seem to work. So when and how can it make sense to work together?

If you do the complete math, it can make sense for agents and investors to work together. Of course, this still relies on finding a good match and finding a great agent. So how can you make the numbers work, and find agents worth working with?


What Investors Need in an Agent

  • Investor-friendly
  • Understand investors’ needs and strategies
  • Willing to be flexible on commissions when needed
  • Serious about long-term relationships
  • Hungry and ready to hustle to get deals done

It’s also worth noting that the agent may need a broker who is equally as flexible in order to allow them the freedom to get deals done on your terms.

Low-Ball Offers & High Volume Business

As investors, we typically put in low offers in order to buy right and make the numbers work. We generally aren’t trying to pay retail (which is what most properties are listed on the MLS for, if not way more).

This creates two dilemmas for the agent. First, it can make them feel as if they are going to get less commission if offers are low. In a hot market, they may be better off working with a retail buyer willing to pay more if they have the extra leads. However, more significant is that spending all their time throwing out offers that have little chance of being accepted burns up their time without any pay. This can mean they are snubbed by listing agents in the future.

Related: Investors: Think Real Estate Agents are Useless for Finding Great Deals? Consider THIS.

However, there are ways to make this work for both sides.

3 Constructive Ways to Work With a Real Estate Agent as an Investor

Focus on the deals.

Instead of trying to hammer listings that just aren’t going to work, have your agents focus on ones that will (80/20 rule). Have them use their access and connections to instantly alert you to new deals that may work for your criteria. These can be hot new distressed listings from other agents, listings about to expire, back on the market properties, or even off-market properties that aren’t listed on the MLS.

If they can find deals that match your numbers, then you should both feel great about making offers on them. We can all use more sources of deal flow. So having a dozen agents feeding you property leads is great, even if they only come up with 2-4 potential deals a month.


Negotiate volume discounts.

Investors can also negotiate volume discounts on agent commission. This may be difficult if you are brand new and have no deals under your belt. That will change significantly once you are buying 4, 8, or 15 properties a month. You may even start out with a sliding scale. Perhaps you pay the agent’s full asking commission on the first deal, decrease that if you do 4 of more transactions a month, and so on. You may be surprised at how low they will go if you ask.

Related: The Step-by-Step Guide to Finding an Investment-Savvy Real Estate Agent

Fully leverage agents & let them triple dip.

Investors can also get a lot more value out of agents if they fully leverage all they do. From time spent sourcing and negotiating to evaluating properties, coordinating closings, fielding calls, and spending on marketing, there can actually be a lot of value in working with an agent. That can sometimes replace what would be 2 or 3 in-house team members, along with the associated risks.

Then there may be further room for discounts on real estate commissions if you let the agent work all sides of the deal. This may include acquisition, resale, leasing, or lease options. In some cases, they may even have the cash or lender connection to help fund the deal. If they are getting paid 3 or 4 ways on each property, then you certainly deserve a discount on their commission rates.

Ultimately, there can be win-wins found with agents and investors working together. It’s about looking at the numbers, optimizing the relationship, and finding a profitable system for all sides.

Investors: Do you work with an agent to find deals? Why or why not?

Leave your comments and questions below!

With just under a decade of experience in the real estate industry, Sterling currently manages over $10MM in capital, which is deployed across a $26MM real estate portfolio made up of multifamily apartments and single-family homes. Through the company he co-founded, Holdfolio, he owns just under 400 units. Sterling was featured on the BiggerPockets Podcast and has been contributing content to BiggerPockets since 2014, with over 200 posts on topics ranging from single-family investing and apartment investing to wholesaling and scaling a business.

    James Wise Real Estate Broker from Cleveland, OH
    Replied about 3 years ago
    Didn’t see any win wins in this article. Just a lot of ways for investors to treat agents like punching bags, all well and good I suppose but this type of advice will prevent investors from working with the top tier agent. Top tier talent is paid a top tier rate in all businesses, including real estate. Also worth noting that buyers don’t typically pay commissions to agents so not sure why buying 4, 8, or 15 properties a month would translate into a discount of some sort.
    David Grabiner Investor from Chattanooga, TN
    Replied about 3 years ago
    From what I have read top tier agents are going to listing agents not buyers agents anyways, because listing is where the money is. From my experience it is just best to cut out the buyers agent completely and go straight to listing agent. Sometimes they keep all of the commission sometimes they give up a few points in order to make the deal go through. In the end those listing agents are going to call you directly when the have a listing because they know they won’t have to split commissions. Maybe it is just my experience but I have never had a buyers agent bring me a good deal. I have found my deals either through networking or just looking at the MLS myself.
    Deren Huang Real Estate Agent from Tulsa, OK
    Replied about 3 years ago
    I agree with you James, the seller is the one paying commission and the selling agent and the buying agent are splitting. There have been a couple of times on a HUD home when I waived my commission.. but that was in the bidding process and was not promised the split. Anywho, if you are an agent and “kicking back” the commission, I would def talk to a broker or check your states laws it may be illegal.
    Replied about 3 years ago
    However, since the seller is paying those commissions with money they received from the buyer, it could be argued it is the buyer who is paying the commissions. When I negotiate, I always insist on paying the commissions apart from the price of the house. No sense in paying interest and property tax on agents’ commissions.
    Bevla Reeves Real Estate Agent from Scottsdale, AZ
    Replied about 3 years ago
    I agree with James! And what do investors do when they DON’T work with agents? They do their own marketing and process their own transactions? FSBO?
    Deren Huang Real Estate Agent from Tulsa, OK
    Replied about 3 years ago
    One thing that I like to do as an agent is have the investor fill out some of the paperwork. 1. It actually makes them read the contracts and understand what rights they have and don’t have. 2. It saves me time getting the signatures 3. It’s as simple as fill in the blanks -> scan to me -> I forward I don’t mind submitting a low ball offer, but my highest and best use is not doing paperwork on something that has a high chance of just getting rejected.
    Bevla Reeves Real Estate Agent from Scottsdale, AZ
    Replied about 3 years ago
    Great idea Deren! ;))
    Gary Couch Managing Partner from Phoenix, Arizona
    Replied about 3 years ago
    In my experience, it is my opinion that working with RE Agents is a great way time achieve in site in to the markets your interested in, no body knows markets better than the Professionals that service them. I feel that once you have a working relationship the questions about commissions are totally secondary. Just saying G