My agent is not comfortable with my offers
Good evening fellows,
I'm currently in the process of buying my second property. I am using a VA loan and I am currently located in Virginia beach with the following search criteria: SFR 4/2 with a backyard ( garage is a bonus) , 1600+ sqft with a market time of 40+ days, minor repairs or modifications needed are welcome.
The modification and market time is , you guessed it, to be able to negotiate a discount from the original listing price.
The agent that I work with is the same one I used to purchase my first property. I really like him, but he doesnt feel comfortable writing offers that are discounted from the listing price. He Always finds a way to talk me out of it.
Have you experienced this before ? What are your thoughts ?
Neither person is necessarily wrong in principal just maybe wrong for each other. In your point you are offering what I would consider reasonable offers and it is a numbers game, someone will bite and you have time to wait for it. On the other end of the coin not all money is good money for an agent and it sounds like he believes you are a time waster, they don't get paid unless you close. Even if you talk him into it, part of negotiation is confidence in your offer and do you really think he is going to convey that to the listing agent. Part ways on good terms and find someone who wants to work with you and understands your goals.
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Quote from @Frank A Castro:
Good evening fellows,
I'm currently in the process of buying my second property. I am using a VA loan and I am currently located in Virginia beach with the following search criteria: SFR 4/2 with a backyard ( garage is a bonus) , 1600+ sqft with a market time of 40+ days, minor repairs or modifications needed are welcome.
The modification and market time is , you guessed it, to be able to negotiate a discount from the original listing price.
The agent that I work with is the same one I used to purchase my first property. I really like him, but he doesnt feel comfortable writing offers that are discounted from the listing price. He Always finds a way to talk me out of it.
Have you experienced this before ? What are your thoughts ?
DO you have flat-rate buyer agent in your area ? If yes you could use their service as they don't care about low ball offer as their comms is the same.
Other strategy, just talk to the seller agent, ask him to become your agent, split his commission to you, and ask for $340k, if accepted, good, if not then it's ok. I do this all the time.
Quote from @Frank A Castro:
It's normal for an agent to hesitate when the Buyer wants to make low-ball offers. I've had Buyers tell me to write up offers 30% or more below asking in a hot market. I'm not going to waste my time.
Your offer seems very reasonable and I would not hesitate to write it up.
It's time to find a new agent.
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On what planet is a 340 offer on a 370 property listing that’s been on for 127 days a lowball???
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Quote from @Frank A Castro:
There's a listing that has been on the market for 127 days. It's listed for $370k, and based on my numbers (PITI plus Variable expenses and some little renovation) I wanted to write an offer for 340k to see if theyre willing to counteroffer.
Nothing wrong with your $340,000 offer other than too many zeroes.
Always offer a specific number that looks like it came from your calculator.
@Frank A Castro this is exactly what motivated me to get my license! I had growing pains with an agent when looking for rentals. Most agents don’t come from the investors mind set and believe they are helping because they think we really want the house. It’s hard to explain to them sometimes that there’s specific numbers we have and if we can’t make the numbers work then we are totally okay with walking away!
Get a new agent. If they aren't willing to make offers at what you want and talks you out of it, they aren't working in your favor in my opinion. Making offers at a discount to get a good deal is all a numbers game. The more offers you write at a discount, the closer you get to getting an accepted offer at a discount on market.
Will this even cash flow? VA loan is 100% leveraged?
@Frank A Castro
I experienced something similar with my agent while purchasing my home back in May. Some agents don’t want to do the work of typing up the offer if they feel as if the seller will say no. I had to tell him that if he was uncomfortable writing up the offers that I was making even if they were less then the amount that he was recommending then I would have to go an find an agent that will. No hard feelings, just business.
Another vote for a new agent here.
It sucks because you build a personal relationship with an agent, but as others have said, this one isn't willing to work for you. We bought 3 homes with our previous agent. Although he started off great, our last property was the nail in the coffin for our relationship. By the end of the deal, it felt as though he was conspiring with the listing agent against us and took us threatening to walk away before they actually negotiated on our behalf. Now we're looking into rentals and had to find a new agent. Hoping this one works out better.
I listed a property once and I had an offer that was 50% reduced and my agent sent it over to me to consider anyway and I said "nah". But it's testament that you should be able to submit an offer for whatever you want without judgment, but even more so with the facts you've stated.
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@Frank A Castro At least 95% of agents are useless to investors - the one you are working with obviously included.
You need to find an agent that:
1) Is an investor
2) Works with investors
3) Can prove they work with investors!
@Frank A Castro
New agent.
Quote from @Frank A Castro:
Good evening fellows,
I'm currently in the process of buying my second property. I am using a VA loan and I am currently located in Virginia beach with the following search criteria: SFR 4/2 with a backyard ( garage is a bonus) , 1600+ sqft with a market time of 40+ days, minor repairs or modifications needed are welcome.
The modification and market time is , you guessed it, to be able to negotiate a discount from the original listing price.
The agent that I work with is the same one I used to purchase my first property. I really like him, but he doesnt feel comfortable writing offers that are discounted from the listing price. He Always finds a way to talk me out of it.
Have you experienced this before ? What are your thoughts ?
I'm going to go ahead and disagree with the majority of the people in here.
It sounds to me that your agent could be spot on and is trying to save everyone some time. Look, if you were my client I would get you into the best possible outcome possible, but I'm not going to pretend that writing significantly under asking offers for difficult sellers that probably overpriced their homes to begin while using a loan product that may make you look less qualified is going to get you anywhere. When people ask for concessions and closing assistance, even if they don't need it, it makes it seem like they do... which makes their deal more risky for a seller. In my market we've been in a strong buyer's market for several years. Even in todays environment we'll see north of 20 offers on any decent property. The fact that it is sitting on the market does tell me that it is either overpriced, or has issues. You say you're looking "for an investment" but you're not. You're shopping for something that you want, but you want it at a discount. There is a market for real estate, if you're not operating within that market you won't be successful. Professional realtors know the difference between sheer luck and what is attainable. It sounds like you're looking to get lucky. If that's what you're doing; consider telling you agent to make verbal offers. This will allow you to make quick offers on a majority of properties and if there is any way it could come together your agent will surely write it. I'm guessing there are not many of these properties, your agent is being a realist, and you would rather come on here and listen to these people that have no idea what the fundamentals are in your market place and then fire your hard working agent that needs to put food on his table for no good reason. If you have a good agent, and you are truly a buyer. Let him do his job and get you into what you're looking for. IMO you'll waste so much time in the pursuit of saving money that it will cost you more as prices swell around you. I've seen it time and time again. Just my 2 cents, please don't shoot the messenger!
Happy Hunting!
Sincerely, Mark Updegraff
Quote from @Drew Sygit:
@Frank A Castro At least 95% of agents are useless to investors - the one you are working with obviously included.
You need to find an agent that:
1) Is an investor
2) Works with investors
3) Can prove they work with investors!
Realtors that are investors have less tolerance for idiot "investors" Realtors that are investors only work with other investors that are serious buyers. Not all "investors" are buyers. We also call them tire kickers.
Quote from @Carlos Ptriawan:
Quote from @Frank A Castro:
Good evening fellows,
I'm currently in the process of buying my second property. I am using a VA loan and I am currently located in Virginia beach with the following search criteria: SFR 4/2 with a backyard ( garage is a bonus) , 1600+ sqft with a market time of 40+ days, minor repairs or modifications needed are welcome.
The modification and market time is , you guessed it, to be able to negotiate a discount from the original listing price.
The agent that I work with is the same one I used to purchase my first property. I really like him, but he doesnt feel comfortable writing offers that are discounted from the listing price. He Always finds a way to talk me out of it.
Have you experienced this before ? What are your thoughts ?
DO you have flat-rate buyer agent in your area ? If yes you could use their service as they don't care about low ball offer as their comms is the same.
Other strategy, just talk to the seller agent, ask him to become your agent, split his commission to you, and ask for $340k, if accepted, good, if not then it's ok. I do this all the time.
Yup, this is the way to go. I’ve done it myself as well.
I had a deal once where I got seller concessions to cover closing costs, 3 percent down conventional, and got a 2 percent credit at closing from the listing agent which I used to help furnish the place.
Quote from @Nathan Gesner:For this particular property I am trying to write the offer just below 8% of their listing, and this house has been on the market for about 4 months. On top of that I would be paying closings, plus I estimated about $7k of paint, some flooring ( removing carpet from common areas) and other small cosmetics. Also buying my rate down to get it in the ballpark of a decent deal. I didn't think it was such a horrible idea until he got offended about my proposition.
Quote from @Frank A Castro:
It's normal for an agent to hesitate when the Buyer wants to make low-ball offers. I've had Buyers tell me to write up offers 30% or more below asking in a hot market. I'm not going to waste my time.
Your offer seems very reasonable and I would not hesitate to write it up.
It's time to find a new agent.
Quote from @Jonathan R McLaughlin:
On what planet is a 340 offer on a 370 property listing that’s been on for 127 days a lowball???
In mine apparently. Honestly if my numbers made sense at the listing price I would have approached it completely differently.
Quote from @Steve Vaughan:Definitely adding this to my toolbox. I normally get a certain number on my analysis and I just round it up or down. I will consider trying this way moving forward.
Quote from @Frank A Castro:
There's a listing that has been on the market for 127 days. It's listed for $370k, and based on my numbers (PITI plus Variable expenses and some little renovation) I wanted to write an offer for 340k to see if theyre willing to counteroffer.
Nothing wrong with your $340,000 offer other than too many zeroes.
Always offer a specific number that looks like it came from your calculator.
Quote from @Conrad Cortes:
@Frank A Castro this is exactly what motivated me to get my license! I had growing pains with an agent when looking for rentals. Most agents don’t come from the investors mind set and believe they are helping because they think we really want the house. It’s hard to explain to them sometimes that there’s specific numbers we have and if we can’t make the numbers work then we are totally okay with walking away!
Hi @Conrad Cortes,
Totally agree. I was working on getting mine after my first property, but I got deployed and my time window expired by the time I came back, then all of a sudden I honestly have procrastinated, placing other responsibilities higher on the priority list.
Quote from @Cody Neumann:
Get a new agent. If they aren't willing to make offers at what you want and talks you out of it, they aren't working in your favor in my opinion. Making offers at a discount to get a good deal is all a numbers game. The more offers you write at a discount, the closer you get to getting an accepted offer at a discount on market.
Appreciate your input @Cody Neumann
Quote from @Michael P.:
Will this even cash flow? VA loan is 100% leveraged
VA loans are 100% leveraged, and unlike a FHA, for example, you don't have to pay PMI while trying to put together that 20% equity. Also agents frequently see VA loan and they steer away from it, lol.
My first property ( also VA loan ) is set to cash flow around $420 with a 13% for repairs, Vacancy and CapEx.
Being in Virginia Beach the Vacancy is really low for SFRs, because of the huge military population. Which is also bad at the same time for getting a decent deal, since supply cannot keep up with demand and prices go up, and rentals don't adjust simultaneously.
That's why I focus on properties that need some light TLC and have been listed on the market longer (At least while I am trying to use my VA allotment.)
Quote from @Mark Updegraff:
Quote from @Frank A Castro:
Good evening fellows,
I'm currently in the process of buying my second property. I am using a VA loan and I am currently located in Virginia beach with the following search criteria: SFR 4/2 with a backyard ( garage is a bonus) , 1600+ sqft with a market time of 40+ days, minor repairs or modifications needed are welcome.
The modification and market time is , you guessed it, to be able to negotiate a discount from the original listing price.
The agent that I work with is the same one I used to purchase my first property. I really like him, but he doesnt feel comfortable writing offers that are discounted from the listing price. He Always finds a way to talk me out of it.
Have you experienced this before ? What are your thoughts ?
I'm going to go ahead and disagree with the majority of the people in here.
It sounds to me that your agent could be spot on and is trying to save everyone some time. Look, if you were my client I would get you into the best possible outcome possible, but I'm not going to pretend that writing significantly under asking offers for difficult sellers that probably overpriced their homes to begin while using a loan product that may make you look less qualified is going to get you anywhere. When people ask for concessions and closing assistance, even if they don't need it, it makes it seem like they do... which makes their deal more risky for a seller. In my market we've been in a strong buyer's market for several years. Even in todays environment we'll see north of 20 offers on any decent property. The fact that it is sitting on the market does tell me that it is either overpriced, or has issues. You say you're looking "for an investment" but you're not. You're shopping for something that you want, but you want it at a discount. There is a market for real estate, if you're not operating within that market you won't be successful. Professional realtors know the difference between sheer luck and what is attainable. It sounds like you're looking to get lucky. If that's what you're doing; consider telling you agent to make verbal offers. This will allow you to make quick offers on a majority of properties and if there is any way it could come together your agent will surely write it. I'm guessing there are not many of these properties, your agent is being a realist, and you would rather come on here and listen to these people that have no idea what the fundamentals are in your market place and then fire your hard working agent that needs to put food on his table for no good reason. If you have a good agent, and you are truly a buyer. Let him do his job and get you into what you're looking for. IMO you'll waste so much time in the pursuit of saving money that it will cost you more as prices swell around you. I've seen it time and time again. Just my 2 cents, please don't shoot the messenger!
Happy Hunting!
Sincerely, Mark Updegraff
Hi @Mark Updegraff,
I really appreciate your input, however I will say that yes, I am trying to get something at a discount, hence why I have in my search Criteria houses that need light repairs and have been listed for a longer period of time, why ? Because in my market supply hasn't kept up with demand and everyone that's selling their properties know that.
You stated on your answer that you think the reason the house is on the market for so long is because is overpriced or has issues, but then you said that I am trying to get lucky because I am trying to get it at a discount. You also said that I am not trying to buy an investment property, but get lucky, like if paying for an overpriced item was going to do me any good.
The reason I came here was to seek advice from people that have been on the game longer than me, have most likely experienced this in some sort of way in the past, and how they have dealt with it.
I will leave below my analysis for this particular property, maybe someone that knows my market (VA Beach ) can see something that I don't.
Asking Price: $370k
My Offer: $340k plus closings ( about $10k)
0% down, and buying my rate down to about 5.5% fixed at 30 yrs ( around an extra $2000 )-> PITI $2275 , plus 388 ( CapEx, Vacancy and Repairs) = 2663
Income: $2600
Then you see that even offering $340k and self managing I'd be -$63. However, I'd be living in this house for at least two years( VA loan 1 year required) while I am renting my other cash flowing property ( I am also in the process of pulling a HELOC to help funding my next deal). While living in the house I will be forcing appreciation by improving comps and give time to the rental market to catch up.
I spend my free time analyzing properties and 85% of them I don't even show it to my agent because of the unrealistic offers I would have to send for it to make sense. Also, I show the listings I want to put an offer on to my agent, he doesn't bring them to me, which I don't have a problem with.
I do agree he is a hard worker and a great person, I just don't think we have the same strategy approaches.
Respectfully.
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#2 Managing Your Property Contributor
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@Mark Updegraff the agents we know that successfully work with investors have systems in place to weed out "tire kickers" :)
Quote from @Drew Sygit:
@Frank A Castro At least 95% of agents are useless to investors - the one you are working with obviously included.
You need to find an agent that:
1) Is an investor
2) Works with investors
3) Can prove they work with investors!
@Drew Sygit Thank you.