I found a property without an Agent
New York City, NY · Member since 2017 · 37 posts · 1 vote
I found a property without an Agent
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Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes
3yI bought my first investment property without a realtor. It's not brain surgery. I found an expired MLS listing and contacted the seller. I got a lower price as I used the fact we didn't need a realtor as a bargaining chip.
When the property was on the MLS he was asking in the low to mid 90s (I believe he was asking $94,500 if my memory serves me right) and I bought it for 79K.
I hired a RE attorney as did the seller and it ended up being a great buy and the beginning of my RE journey....
41 Replies
- Realtor · Athens, GA · Member since 2023 · 201 posts · 104 votes3y
Yeah seller pays the commissions so as a Buyer you don't have to pay, best you could negotiate would be the seller paying maximum closing costs and buying points I guess. The seller can also work up documents and fill in the info, basically treating you as a customer or dual agent if the broker allows that. But that is all way more complicated than finding a buyers agent and having them do it for you, and having them look at the documents and deal as well.
- Rental Property Investor · Mount Dora, FL · Member since 2017 · 33 posts · 35 votes3y
There is nothing wrong with going the no agent route. I would hire and attorney to draw up/review the contract though. Building a relationship with a good RE attorney is so valuable in this business. I highly recommend trying to befriend a local one. I've been lucky to become close friends with one in town. He's become a mentor to me in many ways and have saved me many times on inevitable odd things you will come across in the real estate business. Best of luck!
- 3yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
just curious - based on what you said about the amount this is a fairly expensive property, yes? what are the numbers?
- New York City, NY · Member since 2017 · 37 posts · 1 vote3y
The property is listed for $799K
2-family - total income is about $5K a month
Taxes are about $10K
- 3yMichelle BatemanPro MemberRealtor · Kansas City, MO · Member since 2019 · 108 posts · 52 votes
If it's on market (and even off market) always recommend using an investor friendly real estate agent - they have a fiduciary responsibility to you and only you!
- Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes3y
Quote from @Michael Peralta:
Hi -
Is it possible to draw up a offer letter without an agent? I think I found a solid home I want to capitalize on.
I did all the work myself so I feel guilty in giving someone a cut if I went through the trouble of doing all the work but, need assistance drafting up a solid offer letter. Any advice or template available?
Of course you do not need a realtor. I have done about 500 deals without a realtor, never uese the
- Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes3y
Quote from @Michael Peralta:
The property is listed for $799K
2-family - total income is about $5K a month
Taxes are about $10K
Terrible deal, why would you do this ? About 40k net on 800k, terrible, Find a better deal
- Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes3y
If you find a property off market then you can deal directly with the seller and possibly save on not paying agent's commissions. You can use a lawyer for the paperwork (or some states have pre-approved forms available online you can use), and a local title office to process the transaction.
However if the property is already listed on the MLS, then there is a listing agreement in place already for the property, with agent's commissions already negotiated and priced into the sale.
I'd recommend seeking your own representation as an agent on your team will be highly beneficial and the buyer's agent's commission is already baked into the price in this case, "paid for by the seller". Finding the property is maybe 5% of the work in closing the transaction.
If you approach the listing agent directly, they may allow you to make an offer without representation. They may keep the full commission themselves, or they may negotiate with the seller for a different amount (4% total instead of 6% is pretty common). That's actually between the seller and their agent. You would be representing yourself in the transaction, and the listing agent representing the seller. In some states the listing agent can switch to represent both parties (dual agency), while in other states this is illegal (like CO where I am, where the listing agent already has a fiduciary duty to the seller and representing both buyer and seller would create a conflict of interest). Some listing agents are cool with dealing with unrepresented buyers, others prefer to refer them to a colleague for representation because they can take a lot hand-holding and there's also extra liability involved.
The listing agent you need to be aware of is the one who smells blood when a buyer submits an offer on behalf of themselves, because they know multiple ways to take advantage of that buyer without them ever even knowing it. People often think they're going to save money this way but end up worse off without even realizing it. Each and every part of the purchase contract benefits either the buyer or the seller, depending on how it's written or which box is checked. Which boxes do you think the listing agent will want checked if they know the buyer is unrepresented and uneducated?
Every now and then I get an interested buyer on one of my listings who is too smart to need an agent/ the wannabe investor-type. They never even know about the money they left on the table by representing themselves. Some have even have lawyers review everything, but not every lawyer is that smart and some of them don't understand real estate transactions any better than a random person off the street. The buyer may get a slightly reduced price off the top by not bringing their own agent, but they can end up paying more in closing costs, or miss their inspection deadline/fail to negotiate any repairs, or pay the most recent mill levy for property taxes instead of last years amount (which could cost them a lot more because taxes went up a lot recently with the most recent assessment), etc. Most buyers simply don't even know what they don't know, and can easily end up worse off than if they just had a competent agent on their side.
A lot of these transactions with one or both sides unrepresented also end up falling apart or in litigation. Much of what agents do is keep deals together, and keep the crazy train on the rails so nobody feels the need to sue. Buyers and sellers have opposing interests and without agents involved they often get frustrated with each other, end up walking away from the deal over something stupid or end up suing each other (or one side get's the short end of the stick without even realizing it).
- 3yJeffrey McKeePro MemberReal Estate Agent · Plano, TX · Member since 2013 · 477 posts · 89 votes
@Michael Peralta what state are you in? Happy to lend help in Texas. Lots of contracts floating around you can use.
- Realtor · Pittsburgh, PA · Member since 2016 · 32 posts · 17 votes3y
If the LA is also the principle/seller... why would you NOT want someone in your corner? I would strongly encourage a buyer's agent. Even if you did have to pay for them, they'd be worth every penny.
Real estate investing is like asking a girl to marry you. Nearly all of them would way Yes to the offer.... especially if the "ring" is pretty and they can show their friends. But getting her from saying yes to the altar (offer to closing) is a whole other ball game entirely, and in some state you just lost your ring AND your girl... Just hire an agent and don't look back. Do NOT use the listing agent if they are also the seller. They should be telling you that they can't be your agent anyway. I would never let an unrepresented buyer purchase something I am selling. Wouldn't even want the smell of impropriety. Good luck with your deal.
- Rental Property Investor · Streetman, TX · Member since 2018 · 527 posts · 495 votes3y
You can absolutely buy a property without an agent. You can download your state approved contract and make the offer yourself. Just make sure you have an attorney involved to review the paperwork. Most charge $250 to do so. Some of my best deals have been where I represented myself using an attorney.
I had one recent purchase where I used an agent and she was a train-wreck. She was totally intimidated by the sellers agent and was getting bullied into poor terms. When problems arose during the inspections she disappeared on my. I finally ended up dealing directly with the sellers agent to get what I needed.
A bad agent is worse than no agent.
- 3yJohn MorganPro MemberRental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votesI’ve had several of my offers match the highest offer on the table and get the deal. The listing agent campaigns for me to get it so they get that extra 3% commission since they now represent the seller and buyer. And almost every listing agent tells me good info about the seller like how motivated they are (divorce, job transfer, death in family etc) or what kind of offers they’ve received. I’ll leverage that intel which helps me come up with what I’ll offer. And listing agents go out of their way to show me the properties asap for obvious reasons.
Quote from @Aaron Williams:
Quote from @John Morgan:
@Michael Peralta
I’ve bought 18 properties without an agent. I just use the listing agent every time. If I like the property, I text the listing agent my offer. So much easier this way for me.
If you're using the listing agent every time, then you are using an agent and that listing agent is double ending the deal. The seller predetermines before listing how much commission they are paying an agent bringing in the buyer. I'm not saying using the listing agent isn't a good thing. But you're not necessarily getting a better deal by doing this. Congrats on your 18 properties!
- Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes3y
Quote from @John Morgan:
The listing agent campaigns for me to get it so they get that extra 3% commission since they now represent the seller and buyer. And almost every listing agent tells me good info about the seller like how motivated they are (divorce, job transfer, death in family etc) or what kind of offers they’ve received. I’ll leverage that intel which helps me come up with what I’ll offer. And listing agents go out of their way to show me the properties asap for obvious reasons.Aloha,
Listing Agents that are giving you "good info " such as you indicate are in violation of their fiduciary duty, and clearly not to be trusted. They should be disclosing exactly who they are representing...either Seller, Buyer, or as Dual Agent, or treating a Buyer simply as a Customer. Each of these roles is differently compartmentalized depending on the specific role, which should have been made clear to you in writing. A Listing Agent, unless specifically authorized by the Seller, can never provide specifics of motivation, details of offers received, or other "inside" info that would show a weakness on the part of the Seller. Each of the roles mentioned have clear "limits"of what they can disclose to the other party in the transaction.
- Realtor · Pittsburgh, PA · Member since 2016 · 32 posts · 17 votes3y
Quote from @Richard F.:
Quote from @John Morgan:
The listing agent campaigns for me to get it so they get that extra 3% commission since they now represent the seller and buyer. And almost every listing agent tells me good info about the seller like how motivated they are (divorce, job transfer, death in family etc) or what kind of offers they’ve received. I’ll leverage that intel which helps me come up with what I’ll offer. And listing agents go out of their way to show me the properties asap for obvious reasons.Aloha,
Listing Agents that are giving you "good info " such as you indicate are in violation of their fiduciary duty, and clearly not to be trusted. They should be disclosing exactly who they are representing...either Seller, Buyer, or as Dual Agent, or treating a Buyer simply as a Customer. Each of these roles is differently compartmentalized depending on the specific role, which should have been made clear to you in writing. A Listing Agent, unless specifically authorized by the Seller, can never provide specifics of motivation, details of offers received, or other "inside" info that would show a weakness on the part of the Seller. Each of the roles mentioned have clear "limits"of what they can disclose to the other party in the transaction.
EXACTLY!!
I wish more principles understood the limitations of what the agents can and should say. I wish more agents did too. You get what you pay for folks...
Formula for "getting the good info to determine how much you'll offer from the LA, because the LA 'makes more money'.."
PP of Property -$XYZ
6% (just an example) worth of total commission, regardless of who the agents are.
"saving" that 3% because of the "good intel" - which didn't actually happen.
= "YAY - I made money" Ending PP. $XYZ
vs.
Seller finds out information he told his agent in confidence is used to compromise the purchase price, influence the principles, and therefore the deal becomes a deal in bad faith....
Seller sues EVERYONE. Principles, Agents, brokers, etc...
Wonder if the cost of even just defending that would have been worth the perceived percentage of "deal" you got.
or just hire a buyers agent and let them work for you.
- 3yAlan AsriantsBusiness MemberReal Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
If the deal is on the MLS you can contact the listing agent directly and there won't be any fees on your end, likewise with a Buyer's agent you don't pay them a commission, the seller does (if listed on the MLS)
An agent is not a necessity, but it is highly recommended. - A good agent will draft up a contract to protect your best interest, identify negatives and positives about a property, or even recommend not buying a home because of certain red flags.
I have saved some of my buyers buying bad deals, properties with structural issues that they would've bid on without inspections, and other cases as well.
It is not required to have an attorney represent you but it is strongly recommended. Same thing here. If you gain the necessary knowledge through experience then go for it and close your own deals. First one is best to have some guidance.
Alan Asriants - New Century Real Estate 590 Reviews - 3yJohn MorganPro MemberRental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votesI agree. But they all seem to say more than they should. For me, it’s a more efficient way to buy. If the numbers work, I’ll call up the listing agent to see the property right away. I tell them approximately how much it’ll cost me to get it rent ready. I include any preventative maintenance items such as a roof or water heater needing to be replaced within 3-5 years. I show them each item of concern so they know I’m not just some investor low balling an insulting offer. They share this with the seller when I make an offer a few hours later after I crunch my numbers one final time. And I’m open to any extra intel they give me about the seller, previous offers or motivation level of the seller to dump it. Almost every single agent tells me things that I use to leverage when I make my offers. And I’ve been blown off 3 times by the listing agents after getting out bid on houses. I was able to resubmit my final offer once I found out I was outbid with other offers.
Quote from @Richard F.:
Quote from @John Morgan:
The listing agent campaigns for me to get it so they get that extra 3% commission since they now represent the seller and buyer. And almost every listing agent tells me good info about the seller like how motivated they are (divorce, job transfer, death in family etc) or what kind of offers they’ve received. I’ll leverage that intel which helps me come up with what I’ll offer. And listing agents go out of their way to show me the properties asap for obvious reasons.Aloha,
Listing Agents that are giving you "good info " such as you indicate are in violation of their fiduciary duty, and clearly not to be trusted. They should be disclosing exactly who they are representing...either Seller, Buyer, or as Dual Agent, or treating a Buyer simply as a Customer. Each of these roles is differently compartmentalized depending on the specific role, which should have been made clear to you in writing. A Listing Agent, unless specifically authorized by the Seller, can never provide specifics of motivation, details of offers received, or other "inside" info that would show a weakness on the part of the Seller. Each of the roles mentioned have clear "limits"of what they can disclose to the other party in the transaction.
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