Dump my agent?

26 Replies

BP how goes it?

I'm currently on the prow for my first SFH (long term intentions in mind). I'll be buying in the Wayne/Westland area of Michigan.

According to my agent, as well as a couple of others that I was thinking about working with, this market is a "sellers market". Please listen to this conversation that occurred and let me know whether or not she is fully competent.

Me: "The #1 thing I'm looking for in my purchase is that the home purchase is a bargain. So my plan is to really go in and low ball at first, and then probably meet the seller somewhere in the middle."

Agent: "You have to understand that this is a sellers market. It has been for some time. So if you go in and low ball these properties I can tell you that you're gonna be disappointed. They'll just say no. "

Me: "But aren't they at least likely to counter offer?"

Agent: "No not really because they're all getting multiple offers. They're likely to ignore low balls. I haven't helped sell or purchase on a home that hasn't had multiple offers in 2 years"

Of note: we certainly did not define what a "low ball" is. That is of course something that I'll be seeking clarification on. I have always thought of it as like 10,000 below listing or something of the like.

Please lend me your thoughts. Is she being unreasonable or am I just uneducated? Both? Neither?

Thank you thank you!

Hi @Joshua Fletcherr  

Welcome to BP!!

That is of course something that I'll be seeking clarification on. I have always thought of it as like 10,000 below listing or something of the like.

$10,000 below listing on a $20,000 asking is low-ball, but $10,000 below listing on a $200,000 property is not low-ball.

Not sure how much experience this agent has working with investors and if she is working in the area that you are looking to invest, but you can try attending local REIA and ask other local investors which agent they are working with.

Some agents who work mainly with retail buyers don't understand an investor expectations and not a good match.

@Sharad M. , Ah touche! Let me clarify:

I'm looking at houses between 60k-90k. So I was thinking that a low ball is 10k-15k below.

"some agents who work mainly with retail buyers don't understand an investor expectations and not a good match."

Hmm makes sense.

I have a license, so from experience I can tell you the process of educating someone to a market is rather annoying. Normal process for someone like you is to put in low ball offer after low ball offer till you basically find a mediocre deal that you are comfortable with. At which point the agent then looks for another one of "you" to do it again and grind through the process.

Sounds like your agent is wanting you to listen to their experience and not do the grinding part of the job. I can't blame them, but yeah it isn't in your best interest. Keep in mind your agent really doesn't care if you get a good deal or not, they just want you to close. Sooner than later with as little paperwork as possible.

Hey welcome to the site. Your agent is telling you correct. if your trying to buy retail properties the owners are not going to accept low ball offers. you need to have your agent seek properties that are distressed, foreclosed bank owned or find a motivated seller. What is your price range? There are great deals in westland and the surrounding area you just have to find them. Also make sure your agent is investor friendly.

I'm looking at houses between 60k-90k. So I was thinking that a low ball is 10k-15k below.

IMO, not really low ball. Is this agent working in the same market you are looking to purchase? And is she dealing in the same price range properties? Some agents don't like working on low-priced properties because of how much it involves and how little the commission is.

As mentioned above, get together with a local REIC and you can find out if it's truely a "Sellers" market or not.  I remember a time when I was looking for a house and put an offer in over asking price, they came back asking for "Best and Final" indicating they had 15 offers above the asking price.

Sometimes it happens, sometimes it doesn't.  Also as mentioned above make sure your broker is oriented towards investors and investor expectations regarding pricing.

Bottom line is that "your" price should be based on the income potential of the property and your goals.

What is you buying criteria? Numbers of bedrooms, bathrooms, square feet, garage and or basement. Are you looking to rehab any properties? Do you have an exclusive agreement with your agent?

@Leigh C "Normal process for someone like you is to put in low ball offer after low ball offer till you basically find a mediocre deal that you are comfortable with."

Hahaha yeah I hear you...I'm afraid of that happening.

@Al Deville Will do on the distressed properties, etc. Thanks.

@Sharad M. , She works in the area I'm looking as well as 4 surrounding small cities. While I think my price range is lower than her average, I don't think it's much lower than her average tbh. The property is very cheap around here. Thanks for the eval of the low ball I had in mind (or lack thereof).

@Bradley Benski


"Best and Final" indicating they had 15 offers above the asking price.

What a nightmare....

"Bottom line is that "your" price should be based on the income potential of the property and your goals."

Got it.

Dump her...she just isn't interested in doing the work. The correct response from her is that "there is a fine art to lowballing kind sir, which i shall allow you to learn from i" the fact she uses a generalization also implies lazy thinking, the reality is that each houses situation is its own.

Originally posted by @Sharad M. :

Hi @Joshua Fletcherr  

Welcome to BP!!

That is of course something that I'll be seeking clarification on. I have always thought of it as like 10,000 below listing or something of the like.

$10,000 below listing on a $20,000 asking is low-ball, but $10,000 below listing on a $200,000 property is not low-ball.

Not sure how much experience this agent has working with investors and if she is working in the area that you are looking to invest, but you can try attending local REIA and ask other local investors which agent they are working with.

Some agents who work mainly with retail buyers don't understand an investor expectations and not a good match.

 That may be true however the agent might be more attuned the momentum of the market in terms of what a marketable property will contract for in that particular market than some investors since they are buying and selling property day to day. It also depends on the agents level of competence as well.

 The problem with why investors and agents clash sometimes is that agents know investors want a good deal but they may not understand the metrics you're using to determine what a good deal is and also they want to protect their reputation by not submitting a bunch of impractical offers for a given listing to a listing agent that they may want to work with in the future.

A fully renovated home in great owner occupancy condition generally cannot be be low balled in most cases unless the seller had dire need to sell within a specific period of time but that may be due to the liquidity needs of the seller. In a specific market where buyer and seller are not under duress to sell with a marketable property it will be bashful to an agent who is looking to build a name for her/himself to submit a low ball offer unless if its warranted by some other reason.

Properties or owners who have duress with value add potential whether from zoning, entitlements, legal, depreciation to functional obsolesence, sellers personal reason, and other can present a good opportunity for an investor. I always try to help the agents I work with from the loan officer perspective of what an investor is hoping to realize from a purchase.

Albert Bui, Lender in CA (#345453), WA (#345453), TX (#345453) and TN (#345453)

Joshua,

i know that area like the back of my hand. 

your agent is correct and you are wasting your time. "low ball" talk is just a waste of time at this point. that's just semantics.

let me know if u have questions

If your looking for a new agent contact me.

Not all agent 

" Keep in mind your agent really doesn't care if you 

  get a good deal or not, they just want you to close "

I do not personally want to cash a reduce check after broker 

fees until I feel my client got the best possible deal.

That one of the main reason I personally do not attend closing.

I only attend closing, if I feel my client financing is questionable.

You should consult with @George P.  on a few good investor agents in your area.

Regardless, welcome aboard

Jenkins Ramon

    As others have said, this agent is probably not used to working with investors.  Better to move on and talk to a lot more agents than try to get her to think the way you think regarding a property.

    After selling my houses retail I often get approached by the agent representing the buyer. Once they find out what we do, it piques their interest.  However, most of the time their idea of a deal and my idea of a deal are very very different.  Usually the conversation ends after I tell them what I need.  It isn't their fault and there isn't anything wrong with that.  You just have to find agents that know our business and most do not.  The average agent is out there to sell retail real estate.  Many don't even believe me when I tell them what prices we pay for houses.

    Work the phones and call 100 agents.  Try to get listing agents too, not primarily buyer's agents.  The listing agents are out there pounding the pavement drumming up business and they are the ones that will come across deals.  Don't try to sound like the next Trump because they will dismiss you.  Call them and ask sincere questions then promise to follow up in a month.  Make sure you follow up on time a month later to show them you are serious.  

    All the seminars are back in full force so these agents get a lot of fresh seminar graduates calling them when the guru leaves town. The majority try to sound like a big shot and agents have learned to ignore those folks. It takes time to cultivate the relationships you seek. In the meantime go to the REIA meetings and network.

    The agent is telling you what the market is doing based on their experience.

    That doesn't mean if you go off market and look long and hard enough you will not find your deal. That may take you 3 months, 6 months, 1 year and hundreds of offers to get there. On a time cost basis in a heated market that agent would be breaking even or losing money for the time involved.

    Investors want a deal. It doesn't matter who your clients are. I am in the commercial realm. Some of my clients have millions in cash to deploy on properties we are evaluating. There is buying a deal and then there is out of touch with reality and market conditions. I have to run an effective business and I can't do that chasing Leprechauns looking for the one in 10,000 four leaf clover.

    My clients respect me and trust me to help find them the best value available. If they are unreasonable and not looking at the data for what it is then I can't work with them.

    Investors want to make the most money with the best use of their time. So do brokers and agents especially ones that are investors themselves. They can't go on wild goose chases that lead to nowhere. The brokers/agents transacting know up to the hour what things are trading at.

    I am not talking about mediocre brokers and agents. You can find those all over the place begging for business. This is especially rampant in residential real estate more so than commercial.

    It can't hurt for you to talk to other investors, agents local to you to see if they have properties off market where you could buy and make the numbers work. If you do it yourself you are talking a massive mail campaign and big bucks versus calling to find others leads you might could buy.

    I am not trying to discourage in any way I have just been in this business for awhile and many buyers do not understand if a broker/agent doesn't close something they do not generally get paid. So the broker/agent has to weigh time spent with the reality a property can be found and purchased the buyer Is wanting. If the broker/agent feels they will have a very tough time finding such a property then the task becomes a long shot and a loss leader to make money.

    I hope it helps.

    @Joshua Fletcherr  

    In order to clear up the low ball discusion have you sat down with this agent and shown her what kind of return you are expecting?  Have you narrowed down what you are expecting?  When you say just blindly taking 10-15k off the listed price, it sounds like you have no end goal in mind other than buying a listed property for a reduced price.

    On the other hand if you can break down the numbers to the agent, down payment, rehab costs, closing costs, what the market rents are in the area, expected expenses, and ultimatly what kind of return on your investment you are looking for it will paint a much better picture for the agent on why you are wanting to make the offers you are talking about.  After all of that I would then ask the agent where they think you can find properties that meet your criteria.  If they say not in the area you are currently looking at with retail buyers take the advise and search for either off market properties or find a new area.

    Just my two cents.

    @Joel Owens


    "There is buying a deal and then there is out of touch with reality and market conditions. I have to run an effective business and I can't do that chasing Leprechauns looking for the one in 10,000 four leaf clover."

    Hear, hear!


    Thanks everyone you've all been extremely helpful. I think that it's a sellers market for a reason (i.e., others have noticed, like myself, that the properties are valued low in comparison to rents), and therefore, I think I'll try to be as realistic as possible while still being frugal.

    I'll post the projected numbers for any property I'm considering purchasing in the near future.



    Tell your agent to send you a full list of closed properties that fit your profile. You look at the long ugly list and figure out 3-5 that sold for "cheap" and figure out their projected returns. Then look your agent in the eye and ask them if they can find you one that can match up to the small group you found. Odds are, even finding something of that caliber will be tricky at best for someone with limited experience.

    Along the way ask yourself if that return is "enough" too. It's possible you find yourself with unrealistic expectations.


    Now....ask another agent for the same list. If they don't match up, fire the one holding back info.

    Why your agent hasn't done this for you already is rather frustrating. I believe it's the data you need to make a informed decision and stop driving the poor realtor crazy.

    @Joshua Fletcherr   

    If you know for sure is a seller market , Why do you want to low ball the seller.

    Think it this way: The seller wants the Price they are asking. You want the terms.

    like home warranty,  appliances, closing cost, seller financing....etc.

    negotiating is a skill that everybody has to WIN in the game. 

    Winner #1, seller.

    Winner #2 You, the buyer. You get the terms.

    Winner #3, the agent, they made their commissioner. 

    WIN WIN WIN situation.

    @Joshua Fletcherr  Getting another Agent to put in multiple low ball offers on 60-90k houses is gonna be a tough find. It's an ineffective use of their time. 

    Im not saying it's a bad strategy on your part but for the agent it's high time commitment with a low reward 

    Why not get a license yourself? Then you can write offers all over town until you secure that deal your looking for? 

    James Wise, Real Estate Agent in OH (#2015001161)

    The correct answer is, "In my experience, area properties that fit your criteria may be difficult to find. But let me work on it & see what I can come up with. Please give me a few more specifics as to what sort of deal you're interested in & I'll get back with you as soon as possible." If they say anything other than that (or something similar), there are a bazillion other agents out there that would be happy to work with you. Life's too short!

    You have to know what you want to buy BEFORE you go and try to buy it.

    A broker/agents job is to help a client " if they choose to take them on" figure out what they want and why.

    I think brokers/agents shouldn't blow smoke and tell people vague responses that is what they want to hear. I think this topic starter poster should do their own research to see if the data shown them is correct.

    It sounds like that ( I have no clue ) market is a buy and hold market for rentals which is why flips are not working their that much. The question becomes can you find OVER and OVER again flips or long term rentals in your area on a consistent basis to build a business??

    I have heard investors say they found one and then 8 months later are still looking for another. It's very hard to sustain that over and again in a heated market.

    If brokers/agents do not want to work for peanuts then increase your skill and knowledge level to stand out from the herd and work on larger deals.

    I have never understood WHY investors buying junker houses expect brokers/agents to get all excited about submitting 50 low ball offers and becoming the laughing stock of your profession to make one sale of 1,500 commission. The investor gets excited at possibly getting 20k or 30k off a flip which I understand would motivate them.

    If a broker/agent does such a thing they do it out of necessity because I think if they possessed other skills they wouldn't run themselves ragged doing that.

    3 commercial deals at 100k commission apiece in a year or 200 residential transactions at 1,500 commission for 300k commission. The 300k commission wouldn't even be realized on the residential deals because the structure you would need to close out the 200 deals, find them, show them would eat up most of that money.

    Look at it from the agent's perspective: Do I want to continue to write multiple low ball offers that have no chance in resulting in a commission?

    Also, I would look at your criteria and see if you're low balling is within reason. Are you trying to turn a reasonable 10 cap into 20 cap? Or are you buying in an emotional market where low balling by 10k is the only way you will cash flow?

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