My agent is not comfortable with my offers
Member since 2020 · 60 posts · 32 votes
My agent is not comfortable with my offers
Most Popular Reply
Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votesLet me see if I have the facts right here:
1 - You are making an offer for under the asking price
2 - Your agent doesn't want to make the offer
3 - If the offer were made, it could be accepted and you would get a property at a discount.
4 - If the offer were made, it could be turned down with a counter offer from the seller, or....you could make another offer higher than the first
I'm leaning towards dumping your agent. Your agent is supposed to be working for you, not against you. They can recommend you make a higher offer if they think someone else will, and they would get it instead of you, but that doesn't mean you shouldn't make the discounted offer if you think you want to...especially if you need the discount to make this a good deal. You base your offer on whether or no that offer will get the property, you make offers based on getting the deal. If you have to increase your offer to get the property, but then the deal isn't good, you don't want the property...you only want deals.
114 Replies
- 3yJay ThomasPro MemberReal Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
If your agent is unwilling to make the offer, it could be a sign that they are not truly working in your best interests. Real estate deals can be complex and require finesse, so you should feel comfortable knowing that your agent is doing everything they can to help you get the best deal available. If they're not willing to do that, it may be time to consider looking for another real estate professional who will put your needs first. After all, this purchase is an important step in securing your future financial security – no one should be making compromises on such an important investment! So if you don’t think your agent has done enough research into what kind of deal you could have gotten, then maybe it’s time to find a new one. Real estate is an important decision and you deserve the best representation possible. Good luck!
- Real Estate Agent · Fort Lauderdale, FL · Member since 2018 · 360 posts · 213 votes3y
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 think you should talk to him first and dig in whats the deal , and create a plan.. Cos if you are happy with him so far and he give you the attention , I believe it means something.. After you expressing expectation and talking to him and things dont change then check if you can talk to a more RE Investor friendly Realtor.
At BP platform you can shop around for RE Investing Realtors..
- 3yJeff SchemmelBusiness MemberReal Estate Agent · Saint Paul, MN · Member since 2014 · 384 posts · 401 votes
@Frank A Castro sounds like he's more worried about himself than you, which is a breach of the duty of loyalty and obedience he owes you as someone who represents your best interests. Maybe he's forgotten that part, but It's not necessarily your duty to remind him of that. Aligning on offer price isn't an argument or a debate, it's your choice as a buyer. It's very realistic to undercut list price, so long as data is used to make that decision, including days on market; I saw a lot of over-listing in the fall/early winter as a result of a market shift here in MSP. Some sellers are also just not motivated, and you would have better luck banging your head against a wall (that is something your agent should be explaining) but it shouldn't deter them from writing an offer. You literally have nothing to lose so long as you actually want the house. Having been on both sides of lowball offers, I can admit that it's a little uncomfortable right away the first few times. The thing is, though, when you nail an excellent deal for a client and pay for yourself multiple times over, it's really an exciting feeling. When I decide to partner with someone to buy, I get a feel for what they are looking for upfront. If I'm not comfortable or not interested in operating the way the client wants me to, I just never sign the rep agreement; that's as difficult as the choice has to be.
- 3yMike WebberPro MemberReal Estate Agent · Reston, VA · Member since 2020 · 84 posts · 53 votes
The last three properties I've gotten under contract have all been under asking price. If it is sitting on the market, then the market has rejected their list price. And in your example, you are talking like 10%, not asking for a 30% price cut (which in that case I might agree with the agent).
On a side note... It may be worth revising your strategy. By looking at properties on the market for over a month, you ensure that you won't see any properties that are listed at an attractive price (they're gone already). You're only seeing the properties that the market has already rejected as overpriced. Then you need to negotiate down somebody who has overpriced their property. Just something to consider.
Good Luck out there! In my market (Northern VA), buyer demand is ramping up big time. I'd have a conversation with your agent and make your strategy clear. If he isn't okay with it, he may not be a good match for you.
- Real Estate Agent · Puyallup, WA · Member since 2022 · 551 posts · 379 votes3y
My biggest question would be, are the offers reasonable?
For example, do you find a property that is worth every penny of the asking price of $300k and it's been for sale for 2 days, then you want to make the offer of $175k, then I would say that your agent is 100% correct.
Now if that same $300k property has been on the market for 45,60, 90 days and you want to offer $225k, then it is on your agent because the market has obviously spoken for itself at that given time, and the property is not worth the $300k asking price.
- Investor · Thousand Oaks, CA · Member since 2017 · 306 posts · 123 votes3yjust get a new agent or make offers directly
- Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes3y
@Mark Updegraff @Frank A Castro missed the concessions part. I think Mark laid out a great research strategy, though I would say in these days of open data and zillow i think the buyer should do that themselves and have the agent check their conclusions.
Understanding the relative strength of your offer is key and in a sellers or balanced market a 0% down VA loan is a lousy offer right off the bat, even at full price. Doesn't mean your plan can't work, just that you should know where you are in the ecosystem. No one wants to take those if they don't have to. You aren't 330K cash for instance.
Given that you can always go with radical transparency--take a leaf from @Steve Vaughan and give your numbers, say this is the max where it can work for me and indicate that even though the offer has a formal closing date of X hours you would be happy to honor it if the sellers can make the price work. This has a better chance if you work directly with the list agent.
Volatility in general and of interest rates in particular can produce some odd outcomes and what is not appealing one day might be appealing next month...
- skagit County, WA · Member since 2022 · 1 post · 0 votes3y
Quote from @Joe Villeneuve:
Let me see if I have the facts right here:
1 - You are making an offer for under the asking price
2 - Your agent doesn't want to make the offer
3 - If the offer were made, it could be accepted and you would get a property at a discount.
4 - If the offer were made, it could be turned down with a counter offer from the seller, or....you could make another offer higher than the firstI'm leaning towards dumping your agent. Your agent is supposed to be working for you, not against you. They can recommend you make a higher offer if they think someone else will, and they would get it instead of you, but that doesn't mean you shouldn't make the discounted offer if you think you want to...especially if you need the discount to make this a good deal. You base your offer on whether or no that offer will get the property, you make offers based on getting the deal. If you have to increase your offer to get the property, but then the deal isn't good, you don't want the property...you only want deals.
I totally agree here. You need someone that is going to represent you and your interests. You are making reasonable offers.
- 3yJeff CopelandBusiness MemberReal Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes
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. They initially came out with a really overpriced listing at around $450k back in july, and they have been decreasing the price consistenly until The end of December where it landed at where is at right now. The seller has to be motivated in some sort to make these drastic changes, that's my guess. After talking to my agent I decided to write a $355k with full closing assistance and even then that number didnt seem to work. I told him i just want to enter in the negotiation game but he makes it seem that I am trying to fool the seller.
This is not the only offer where this has happened , just my latest one.
When I first read the subject line of your post, I was expecting to read a gripe from a novice investor who wanted his agent to submit 20 offers per week at 60% of asking price. (We actually get that fairly often as investor-friendly agents, lol).
But that is not the case here. An offer of $355k (or even $340k) on a $370k listing that has been sitting on the market for four months is not unreasonable on the surface.
But, to be fair, it's also possible that you agent is speaking to the listing agents to feel out the situation, and being told things like "Don't waste your time, the seller just rejected an offer of $365k this morning. $370k is truly his line in the sand". (This happens all the time as well)
So I think your first option is to have a heart to heart conversation with your buyers agent, explain your frustration, and ask him to explain to you why he won't write up these offers. If he doesn't have a solid answer that is to your satisfaction, then you are obviously within your rights to move on.
And finally, "the agent who sold us our primary residence who we really liked" is often not the best fit for you when you decide to move forward as a real estate investor. Investing is different, and requires an agent with a different skillset. It's nothing personal. Business is business.
Copeland Morgan LLC4.770 Reviews - Real Estate Professional · Tampa, FL · Member since 2015 · 176 posts · 252 votes3y
When discussing an offer price with an investor, I generally suggest what an initial offer should be, and what is a realistic number that the deal will close at. There are a number of items I research to figure out these numbers. First, there's market conditions: comparables, rental rates, ARV, etc. Second, I want to look at any existing mortgages, how much does the seller owe on the property. Third, I want to try to find their motivation. Do they own 6 other properties and are in over their head? Are they going through a divorce? Sometimes the listing agent will give me some of this information, other times I'm searching property records, court filings, and social media accounts.
Point is, when I give an investor a realistic number they can purchase a property for, it's not a shot in the dark. It's a researched estimate based on a whole multitude of factors. If a buyer asked me to place a low ball offer below market price and the balance of a current mortgage, they're often wasting everyone's time. Now depending on the situation, I may still make the offer if it's something where we're on the borderline and a seller might feel the pressure and bring cash to closing just to get out of a property. But those situations are rare.
I've been lucky to work with some great clients over the years, but I have fired clients many times as well. I often have to work on, analyze, and pitch 20+ deals for every one deal one that goes into contract. I don't know how educated your agent is, but if they're doing their homework you should heed their advice. If they're just writing offers and don't fully understand the investing process, find another agent.
- Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes3y
Congratulations. I think it's time for you to find a new agent.
- 3yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votesExcept for an investor, it doesn't matter what the property will close at, what matters is what the deal will need to be. IF the deal/offer doesn''t close, then it doesn't close. REI should NEVER make an offer based on what will get the property...only on what will make it a deal. If what it takes to get the property won;''t be a deal, then I don't want the property.
Quote from @Stephen Dispensa:
When discussing an offer price with an investor, I generally suggest what an initial offer should be, and what is a realistic number that the deal will close at. There are a number of items I research to figure out these numbers. First, there's market conditions: comparables, rental rates, ARV, etc. Second, I want to look at any existing mortgages, how much does the seller owe on the property. Third, I want to try to find their motivation. Do they own 6 other properties and are in over their head? Are they going through a divorce? Sometimes the listing agent will give me some of this information, other times I'm searching property records, court filings, and social media accounts.
Point is, when I give an investor a realistic number they can purchase a property for, it's not a shot in the dark. It's a researched estimate based on a whole multitude of factors. If a buyer asked me to place a low ball offer below market price and the balance of a current mortgage, they're often wasting everyone's time. Now depending on the situation, I may still make the offer if it's something where we're on the borderline and a seller might feel the pressure and bring cash to closing just to get out of a property. But those situations are rare.
I've been lucky to work with some great clients over the years, but I have fired clients many times as well. I often have to work on, analyze, and pitch 20+ deals for every one deal one that goes into contract. I don't know how educated your agent is, but if they're doing their homework you should heed their advice. If they're just writing offers and don't fully understand the investing process, find another agent.
- Member since 2019 · 18 posts · 5 votes3y
I would recommend a new agent who understands your goals of these being investment properties. your numbers aren't even lowball offers. I have offered 30-40% below asking prices and successfully bought the houses. If your agent isn't willing to try to negotiate with sellers than he is doing you a disservice and you should move on from him
- Real Estate Agent · Myrtle Beach, SC · Member since 2021 · 17 posts · 7 votes3y
Get another agent. It's great you like the agent but this is business. I ask all my clients to interview multiple agents as you build your team. Especially if you're investing out of state. I refuse to write full price offers unless we're negotiating a concession or my client really wants me to. In the past 4 days I secured 2 properties for out of state clients at a combined $87k under list price and even got one seller to include a home warranty. The market is shifting and your agent needs to challenge listing agents. Best of luck!
- Real Estate Agent · Kansas City, MO · Member since 2021 · 32 posts · 28 votes3y
Find an agent that isn't afraid of going below asking price, especially during the slower part of the year. Rates being what they are, our market has seen offers get accepted under asking price, when a year ago it wasn't possible.
- Real Estate Agent · Fort Lauderdale, FL · Member since 2018 · 360 posts · 213 votes3y
HAve you thought of reaching out to or meet on local meet ups an independent wholesaler / Investor , that happens to also have a license.. ??
- Real Estate Professional · Tampa, FL · Member since 2015 · 176 posts · 252 votes3y
Quote from @Joe Villeneuve:
Except for an investor, it doesn't matter what the property will close at, what matters is what the deal will need to be. IF the deal/offer doesn''t close, then it doesn't close. REI should NEVER make an offer based on what will get the property...only on what will make it a deal. If what it takes to get the property won;''t be a deal, then I don't want the property.Yes, couldn't agree more. The question is always is there a number that will work that this seller will accept where the buyer is going to be able to make a return. If the minimum deal I think the seller will take is not one in which the buyer can make a return, the analysis stops right there.
The difficulty I have seen with inexperienced investors on more than one occasion, is they want to start with an offer SO low that it doesn't get taken seriously. This is a waste of everyone's time. Generally speaking we figure out the breakeven point and work backwards from there. Figure out a realistic number the seller will take, see where the returns line up at that number. Then begin offering at a starting point that we think will get us to our target number.
I have it written on my wall, and I swear I'm gonna get it tattooed on me one day, "Deals aren't found, they're made."
- 3yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votesI start with what makes a deal, no middle ground. Either that offer works or doesn't.
Quote from @Stephen Dispensa:
Quote from @Joe Villeneuve:
Except for an investor, it doesn't matter what the property will close at, what matters is what the deal will need to be. IF the deal/offer doesn''t close, then it doesn't close. REI should NEVER make an offer based on what will get the property...only on what will make it a deal. If what it takes to get the property won;''t be a deal, then I don't want the property.Yes, couldn't agree more. The question is always is there a number that will work that this seller will accept where the buyer is going to be able to make a return. If the minimum deal I think the seller will take is not one in which the buyer can make a return, the analysis stops right there.
The difficulty I have seen with inexperienced investors on more than one occasion, is they want to start with an offer SO low that it doesn't get taken seriously. This is a waste of everyone's time. Generally speaking we figure out the breakeven point and work backwards from there. Figure out a realistic number the seller will take, see where the returns line up at that number. Then begin offering at a starting point that we think will get us to our target number.
I have it written on my wall, and I swear I'm gonna get it tattooed on me one day, "Deals aren't found, they're made."
I tell people all the time, the goal isn't to find deals. You find a deal, so does every other REI. After multiple counter offers, the deal that was, is gone.
Look for "opportunities", and make deals out of them. Deals "are made" based on two things:
1 - Minimal cost to the REI...that means as little cash out of pocket as possible.
2 - The terms negotiated where someone/something else pays for everything else.
The combination of the two = the strategy you use...or invent at the moment. The best deals are invented based on the REI's complete understanding of how money works. - Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Mike Webber:
The last three properties I've gotten under contract have all been under asking price. If it is sitting on the market, then the market has rejected their list price. And in your example, you are talking like 10%, not asking for a 30% price cut (which in that case I might agree with the agent).
On a side note... It may be worth revising your strategy. By looking at properties on the market for over a month, you ensure that you won't see any properties that are listed at an attractive price (they're gone already). You're only seeing the properties that the market has already rejected as overpriced. Then you need to negotiate down somebody who has overpriced their property. Just something to consider.
Good Luck out there! In my market (Northern VA), buyer demand is ramping up big time. I'd have a conversation with your agent and make your strategy clear. If he isn't okay with it, he may not be a good match for you.
Also, in our area , just for example, the metrics for reasonable PSF at the same given time for the same zip code have wide range between $600 to $950 sqft, and this is constant. This means, offering 10% or 20% off is scientifically possible. There're cases where a lousy house has been priced the home as high as the more move-in-ready condition.
- Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes3y
@Frank A Castro- thanks ...do you have reserach behind your preference to make intial offers low? or are you just asking for a discount without doing the research in hopes a seller with agree ? Do the properties you are wanting warrant the lower price ? are the points your agent is making valid and do they make sense ? Have you made any offers and if so - what results have you had? you likely can obtain a different agent that is more of a yes man but I am guessing an agent like this wont bring as much value to the transaction ...good luck
- Rental Property Investor · Fleming Island, FL · Member since 2019 · 85 posts · 104 votes3y
@Frank A Castro
Find a new agent. They’re a dime a dozen, and I’m one of them.
- 3yMichael K GallagherBusiness MemberReal Estate Agent · Columbus OH · Member since 2018 · 1k+ posts · 1k+ votes
Quote from @Frank A Castro:
Hi @Russell Brazil, thank you for your prompt reply. Below is my most current example ( from today):
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. They initially came out with a really overpriced listing at around $450k back in july, and they have been decreasing the price consistenly until The end of December where it landed at where is at right now. The seller has to be motivated in some sort to make these drastic changes, that's my guess. After talking to my agent I decided to write a $355k with full closing assistance and even then that number didnt seem to work. I told him i just want to enter in the negotiation game but he makes it seem that I am trying to fool the seller.
This is not the only offer where this has happened , just my latest one.
@Frank A Castro you've gotten much great advice on here. But I wanted to throw in my 2 cents if it was worth anything to you. I'm an investment focused agent, so thats all I do all day, and the biggest difference I have to educate buyers on is the difference between list price and what a property is "worth" and often times what something is "worth" depends on who is using it. I have buyers that approach me that want to do nothing but just make "30% under value offers" but they equate list price with the value. What I have to coach them on is that I'll write as low of a low ball offer as you want to right, but we need to be able to defend it. Because if I'm your agent and you tell me "I'd like to make an offer under list on this property" we need to be able to present that reasoning to the sellers agent to present that information ultimately to the seller in order to get them to accept the offer. So for me as the agent, if an investor can't defend their low offer to me vs their investment criteria or a risk they see in the asset, then its not worth my time writing that offer, because we won't be able to present it a productive way to the list agent and the seller.
- Realtor · St Louis, MO · Member since 2021 · 33 posts · 15 votes3y
The current decision depends on how you got here:
-How did you select your agent? Was it a referral? Did you research about his experience?
-Do you trust his knowledge and analysis? Do you trust that the offer he is suggesting is aligned with your investment goals?
-How do you get to your number? Did you do the due diligence to get to your number?
-At the end of the day, if you send an offer with your price and it will get rejected, you can submit an offer with your agent price and see how it goes?
-One thing that sometimes agents forget, is that at the end of the day, they have to act in the best interest of their clients and do what clients want (as long as it is not against the law).
- Member since 2020 · 60 posts · 32 votes3y
Quote from @Jeff Schemmel:
@Frank A Castro sounds like he's more worried about himself than you, which is a breach of the duty of loyalty and obedience he owes you as someone who represents your best interests. Maybe he's forgotten that part, but It's not necessarily your duty to remind him of that. Aligning on offer price isn't an argument or a debate, it's your choice as a buyer. It's very realistic to undercut list price, so long as data is used to make that decision, including days on market; I saw a lot of over-listing in the fall/early winter as a result of a market shift here in MSP. Some sellers are also just not motivated, and you would have better luck banging your head against a wall (that is something your agent should be explaining) but it shouldn't deter them from writing an offer. You literally have nothing to lose so long as you actually want the house. Having been on both sides of lowball offers, I can admit that it's a little uncomfortable right away the first few times. The thing is, though, when you nail an excellent deal for a client and pay for yourself multiple times over, it's really an exciting feeling. When I decide to partner with someone to buy, I get a feel for what they are looking for upfront. If I'm not comfortable or not interested in operating the way the client wants me to, I just never sign the rep agreement; that's as difficult as the choice has to be.
Hi @Jeff Schemmel,
Appreciate your input. I agree 100% with you. I base my offers on data all the time, I don't go sending an offer just because I want to lowball.In a pretty basic way: I base my numbers on comps ( sale and rental, in case I don't cash flow I can sell and use the equity for something else ) do deeper research on the condition of the comps and then go to my numbers, getting my NOI and my OpEx. Since I am using a VA loan I don't stress too much about CoC ROI. Then I calculate my risk ( market volatility) and adjust for it .Finally The offer that I would write is the one that lands me at the point where I would at least break even ( since this is gonna be primary residence for at least one year).
While my agent is really good at doing his job ( finding home for home buyers ) he's not comfortable presenting something that may create conflict. He even told me: " How would you feel if someone offered you 8% below asking ? " After that I realized he sees me as another emotional home buyer.
- Member since 2020 · 60 posts · 32 votes3y
Quote from @Dave Skow:
@Frank A Castro- thanks ...do you have reserach behind your preference to make intial offers low? or are you just asking for a discount without doing the research in hopes a seller with agree ? Do the properties you are wanting warrant the lower price ? are the points your agent is making valid and do they make sense ? Have you made any offers and if so - what results have you had? you likely can obtain a different agent that is more of a yes man but I am guessing an agent like this wont bring as much value to the transaction ...good luck
HI @Dave Skow,
I do my research. Even before I tell my agent I want to go se the property I do my numbers, look at the comps and have a price on mind. Once I go to the property I readjust based on the actual condition.
Also when I do numbers, If I need to offer a unrealistic low amount for the deal to happen, I don't even bother my agent, unless the house has been listed for an unreal amount of time :).
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