Real Estate Agents Friend/Foe

Ontario · Member since 2008 · 30 posts · 0 votes

This is a question that I have been wondering for quite some time. I am starting out in real estate investing and assembling my team. My question relates to real estate brokers.

I understand that brokers are a great source of deals. But in reality, brokers are people too, and a good deal is a good deal. That being said, if a property is "such a good deal", then why doesn't the broker take that for himself? Why doesn't he/she scrape up the money to control the property, or get an investor to back him up? Wouldn't they make more money off of it that way, as opposed to a commission fee? So, are the deals that would be presented to me, are they high quality deals, or simply the deals that the broker simply couldn't do himself?

Take care,

THE HUN.

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Real Estate Investor · Chicago, IL · Member since 2008 · 1k+ posts · 218 votes
18y
Well, let me ask you this, you are a person too, right? So, why has stopped you from doing this sooner? Why haven't you put together the money, resources, etc to go get involved?

The same questions can be asked by the Realtor. As you said, they are people. People all have their different, wants, desires and risk levels.

Some Realtors really just love being a realtor, others might be investors, but even as an investor we are always looking for new paths and resources. You might be bringing those to the table for the Realtor as well.

A realtor is only a "FOE" if treated as a foe or allowed to act like a FOE. There will always be people wanting to copy you, thinking than can do it better, trying to imitate what you have done successfully. Having been in business for many years, not just REI, it isn't just "REALTORS". In all walks of life there are people that will be "sneaky" try to do better, then when they fail, of course they will blame you.

SO what do you do? You keep trusting people, you keep doing the things you need to do to be reach the goals you have set for yourself. You can not let these people keep you from your dreams and aspirations.
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Jason Hanson
Real Estate Coach · Oakton, VA · Member since 2008 · 695 posts · 43 votes
18y
99% of Realtors will be of no help to you.

1% will be investor friendly and you will use for comps.

Having a good Realtor is not crucial to your business.
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Tom C
Real Estate Investor · OH · Member since 2008 · 1k+ posts · 86 votes
18y
I have said before, my agent is excellent and does everything I ask her to do. Now with that said, she looks at a horrible roof and says, "Hey, the roof is in good shape". Mean while all of the shingles are buckled. She does not have the ability to look at a home and determine whether it's a good buy or what to offer. I find the houses I want to see and she opens the door and then submits the offer. I think she is learning more as we buy more houses, but she is a long way away from being able to get into this business.
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Brian W.
Real Estate Investor · OK · Member since 2008 · 81 posts · 2 votes
18y
Most Realtors really enjoy real estate. However most of them haven't thought of the possibility of investing in it. Usually this is because they either don't have the gumption. or money (or the thought that they have to have tons of it to invest).

Most Realtors will work with you on finding deals because they are looking for commissions and if they help you find a good property (though I have never gotten a GREAT property from a Realtor) there is a good chance that you will sell it with them - sometime. And a small commission several times starts to add up.

I would get buddy buddy with a young hard working energetic Realtor who will help you out with MLS comps.

With that said make sure you compensate your Realtor for their time - either by selling a property with them at some point in time or buy them lunch every once in a while or...something, - you don't want them to feel used, or they won't continue to help you.
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Rich Urban
Real Estate Coach · Jensen Beach, FL · Member since 2008 · 45 posts · 5 votes
18y
Well, I believe that most Realtors have an absolutely different mentality from real estate investors...yes, there are the "2 percenter" exceptions...but for the most part, they gravitate towards that commission.

I've tried reprogramming many of them. I've been successful on quite a few..others..not so much..:)

Hey...if they want to play bird dog and bring you whopper deals, that's cool. It's similar to an Employee / Boss Relationship. There are many jobs where an individual works for a company for years to take a pay check but could make much more money if they want out on their own..but they don't. Why? Stupidity? No...I think they're just programmed to be "worker bees". Real Estate investors are hard core entrepeneurs.

As far as my feelings on working with Realtors..Don’t Let Them Waste Your Time!! When you're dealing with a Realtor, 9 times out of 10 they're going to show you nice houses, owned by people that are in no urgent rush to sell. I hardly ever deal with Realtors. I'm not saying to completely alienate yourself from them. That would be foolish. Simply network with them, and let them know that if a killer deal comes along, you can close with cash quickly.

Explain what you're looking for and that's when they will call you. I wouldn't go around looking at houses with them. Most Realtors are not trained to look for the types of deals that we're looking for. Actually, they'll probably tell you that it's NOT POSSIBLE to find the kinds of deals that we do.

Rich
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Tom McGiveron
Residential Real Estate Agent · Moriches, NY · Member since 2008 · 635 posts · 9 votes
18y
i find these posts pretty funny actually. before getting my license - i talked alot about realtors or "brokers" myself and said how they lacked knowledge or "gumption" or whatever.

okay - the "broker" or owner - uuummm usually is an investor and a big one at that. they make ALOT of money - and own commercial real estate and some either own or have owned residential.

they find deals and they buy them. period.

in my experience - it's most "investors" who are......a complete waste of time dealing with. it's funny actually.

i don't run around and "bird dog" for anyone. i talk to some that i meet and they talk ALOT but then when i send them EXACTLY what they're looking for - they don't follow through. i can look at a foreclosure or preforeclosure and know what the deal is - what the number is - and maybe, just maybe - i don't want to spend my time and money on fixing it up or whatever. i'd rather just help an investor to what he/she wants, get paid and move on to the next one. period. if i can close 10 deals a month (with investors) - for me in commissions, that's $30,000 there abouts - and i didn't have to buy anything, put anything on the line - i just do the deal and bam, i'm on to the next one.

the reason they don't "keep all the 'good ones' for themselves is simple - it's not part of their business plan OR - like was mentioned - they don't have the money or the creative mind (or want) to do so - period.

but those are AGENTS i'm talking about - the "brokers" know what they're doing (most anyway) and i assure you they own real estate and a lot of it.

i definitely agree that most AGENTS don't have a clue - for real.

but there are plenty of brokers and agents that buy real estate and know what to look for. they don't run around chasing newb's or wannabe's either. that's a HUGE waste of time.
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Anna NA
Real Estate Investor · The Northeast, NH · Member since 2008 · 46 posts · 0 votes
18y
I've wondered the same type of thing myself for a long time about different things not just real estate, and found that you could get 100 people and 100 different answers from each, mainly because it's a philosophical question. Everyone has different reasons for doing or not doing something and in my opinion that applies to all industries and all job functions.

It's always a matter of timing in finding a "deal" that's right for you, and this all corrolates directly to luck. I don't mean this from a supersticious standpoint - it's just a matter of putting yourself in situations that will allow you to catch "luck" more often than other people, by researching things on a daily basis and working to be the one to see them first and prepared when one comes along. This way a lot of times before anyone realizes whatever you're working on is a great deal, you already acted on it. Perhaps your broker has a ton of sh!t on his desk and doesn't realize what he's got under his nose.

Whatever the case of why he's not taking it, I know that personally if I felt something was a good deal and had to ask why the broker is not taking it I'd be convinced that I should start acting and right then and there. Especially with real estate, it's not like you're bound to your first instinct, the process allows you to back out in a reasonable amount of time and in the meantime you can see if you're getting yourself into a mess or if you just made a deal that you'll be talking about for a long time.
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Rich Urban
Real Estate Coach · Jensen Beach, FL · Member since 2008 · 45 posts · 5 votes
18y
Anna makes a great point that I'm always trying to impress on our mentoring students. If the numbers work and you know that it's a good deal after analyzing it, you can always lock it up under contract with some contingencies, and a good amount of time to back out (I usually give myself 15 days). If you discover that it's not such a great deal..you just let them know how it doesn't fit into your buying criteria and move on to the next.

HOWEVER, if it is a good deal and you're sitting around wondering..someone will snatch it up and have control of the property.
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