Customary for agent to Charge to look at a property??

Investor · Santa Cruz, CA · Member since 2017 · 61 posts · 50 votes

Ok, so I'm no REI guru (yet), I have purchased two primary residences, and have two other rentals, but I have never heard of an agent charging to look at a property that I'm going to use them to purchase. Am I old (don't answer that!), out of touch or just inexperienced? Or is the agent playing me?

As always, thank you BPers for your wisdom..

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David Faulkner

Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes

Originally posted by @Robert DeForge:

I'm already pre-approved with the 2nd broker he recommended (first was a flake), he has looked at 1 property that he recommended for me so far. That property needed waaay too much work and was outside the price range of what I was looking for. I'm ready for the right properties. I'm not interested in the ones he's sending me that net $100 a month.

If you already know exactly what you are looking for, then a buyer's agent won't do you a ton of good anyhow IMO ... go find the properties that you want to buy ... if they are listed, then call the listing agent and have them show you the property, and let them know that if you offer then you will put the offer in through them and let them double end the deal. You will find no better spokesman with a direct line to the seller (except for maybe you talking directly with the owner on an unlisted property) than an agent who stands to double end it if they close with you. Plus, it is much easier to put in 100 offers in through 100 different listing agents than to expect one buyer's agent to put in 100 offers for you.

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Jordan MoorheadBusiness Member
Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
9y
Robert DeForge what is the charge?
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Robert DeForge
OP
Investor · Santa Cruz, CA · Member since 2017 · 61 posts · 50 votes
9y
@Jordan Moorhead
$50-$100 each.
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Chris MasonPro Member
Moderator
Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
9y
Originally posted by @Robert DeForge:

@Jordan Moorhead
$50-$100 each.
What's the context?
For example if someone says "I am NOT a cash buyer, I am NOT preapproved, and I intend to write 100 lowball offers with no proof of funds or preapproval!" then IMO it's perfectly reasonable for an agent to charge a per-showing fee.
By contrast if you're actually all lined up and ready to rock, then this would be unusual.
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John Bryson
Investor · Seattle/Tacoma WA · Member since 2016 · 55 posts · 33 votes
9y
It's a little strange I'll say. They may be doing that because they're not sure about you....But if you can show them that you're a serious buyer and will close on the right property, there's no way that they should be charging you to go look at a home. Find another agent who is hungry, but at the same time, make sure you can deliver and that you're not sending agents out on a wild goose chase.
Hope this helps!
Experience: I'm an agent.
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Account Closed
Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes
9y
@Robert DeForge I am with @Chris Mason. What is the context? If you want them to show you 500 houses to buy one then they might charge you. If you are a good investor and looking at 5 houses a month and buying one of them they should be buying you lunch.
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Robert DeForge
OP
Investor · Santa Cruz, CA · Member since 2017 · 61 posts · 50 votes
9y
I'm already pre-approved with the 2nd broker he recommended (first was a flake), he has looked at 1 property that he recommended for me so far. That property needed waaay too much work and was outside the price range of what I was looking for. I'm ready for the right properties. I'm not interested in the ones he's sending me that net $100 a month.
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Chris MasonPro Member
Moderator
Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
9y
Originally posted by @Robert DeForge:

I'm already pre-approved with the 2nd broker he recommended (first was a flake), he has looked at 1 property that he recommended for me so far. That property needed waaay too much work and was outside the price range of what I was looking for. I'm ready for the right properties. I'm not interested in the ones he's sending me that net $100 a month.
I'd say it might be time to move on to an agent that's a better fit.
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Robert DeForge
OP
Investor · Santa Cruz, CA · Member since 2017 · 61 posts · 50 votes
9y
His words for clarity.
"... I'd need to charge $50-100 each time depending on location and can put that into a buyer's agreement as an additional charge to you at a future closing. That way there's no out-of-pocket for you. Would you be OK with that arrangement?"
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David Faulkner
Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes
9y
Originally posted by @Robert DeForge:

I'm already pre-approved with the 2nd broker he recommended (first was a flake), he has looked at 1 property that he recommended for me so far. That property needed waaay too much work and was outside the price range of what I was looking for. I'm ready for the right properties. I'm not interested in the ones he's sending me that net $100 a month.
If you already know exactly what you are looking for, then a buyer's agent won't do you a ton of good anyhow IMO ... go find the properties that you want to buy ... if they are listed, then call the listing agent and have them show you the property, and let them know that if you offer then you will put the offer in through them and let them double end the deal. You will find no better spokesman with a direct line to the seller (except for maybe you talking directly with the owner on an unlisted property) than an agent who stands to double end it if they close with you. Plus, it is much easier to put in 100 offers in through 100 different listing agents than to expect one buyer's agent to put in 100 offers for you.
5 Reply
Eddie Egelston
Residential Real Estate Broker · Crystal Lake, IL · Member since 2012 · 124 posts · 94 votes
9y
Originally posted by @Robert DeForge:

His words for clarity.
"... I'd need to charge $50-100 each time depending on location and can put that into a buyer's agreement as an additional charge to you at a future closing. That way there's no out-of-pocket for you. Would you be OK with that arrangement?"
Ahhhhhh that's interesting then. So if you don't close, you pay nothing it sounds like.
I personally think that's incorrect. You closing should be the reward for the agent. The flat fee should be his insurance against you "wasting" his time, and if anything it should be refunded at closing, not charged. That's my 2 cents.
I think we still need more context. What's the purchase price range?
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Robert DeForge
OP
Investor · Santa Cruz, CA · Member since 2017 · 61 posts · 50 votes
9y
@David Faulkner
I like your thinking!
@Eddie Egelston
$65k-$150k.
As a side note. The agent appears to be well versed in REI and I've even read his limited number of posts here on BP. I just wondered if I was getting played. I was hoping to find an agent with local knowledge that could steer me in the direction of better, upcoming neighborhoods, good deals or off market properties.
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Irina Belkofer
Real Estate Broker · Cleveland, OH · Member since 2017 · 719 posts · 658 votes
9y
Working with investors is a huge waste of time: first 20-30 houses might be easy just educational about area or even about condition of the property.
If the agent was sure that you're serious and not using him as a free ride, he wouldn't do it.
I'd go with listing agents to see all the houses on MLS you want to see and make up your mind if the house you want even exist.
Investment properties are usually sold by Fannie, Freddie, HUD - its 3% commission on a low price like $6-10K sometimes. It's $180-300 which agents share with their broker. It doesn't even worth the gas they waste on these showings leave alone their time.
Your price range is around $100K so there will be better commission, however, if the agent already making more money on his own properties, he doesn't want to do $5/hour job.
It's better to find a new agent who is interested in ANY client or go with the listing agents.
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Robert DeForge
OP
Investor · Santa Cruz, CA · Member since 2017 · 61 posts · 50 votes
9y
Originally posted by @Irina Belkofer:

Working with investors is a huge waste of time: first 20-30 houses might be easy just educational about area or even about condition of the property.
If the agent was sure that you're serious and not using him as a free ride, he wouldn't do it.
I'd go with listing agents to see all the houses on MLS you want to see and make up your mind if the house you want even exist.
Investment properties are usually sold by Fannie, Freddie, HUD - its 3% commission on a low price like $6-10K sometimes. It's $180-300 which agents share with their broker. It doesn't even worth the gas they waste on these showings leave alone their time.
Your price range is around $100K so there will be better commission, however, if the agent already making more money on his own properties, he doesn't want to do $5/hour job.
It's better to find a new agent who is interested in ANY client or go with the listing agents.
Cmon, tell us how you really feel.. I hope you're not an agent that treats your clients like that.
3 Reply
Mark Sokolowski
Investor · Brooklyn, NY · Member since 2015 · 15 posts · 5 votes
9y
i am a real estate agent and ive NEVER heard of any agent charging just to show you the property. here in Brooklyn NY every time i want to see a property i am interested (or just want to know if i am interested) in investing in i have never even heard of someone asking me to pay them just to show me the property. maybe it is different where you live but here no way!!
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Kevin Phu
Rental Property Investor · San Diego, CA · Member since 2016 · 507 posts · 171 votes
9y
I personally would find another agent if they wanted me to pay them for a showing. If you don't feel like searching for one, just contact the listing agent. I'm sure they'd be more than happy to show you the property and possibly even be a dual agent.
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Mitchell Jaworski
Rental Property Investor · Boynton Beach, FL · Member since 2014 · 273 posts · 197 votes
9y
@Robert DeForge - not sure if anyone else already said it, but I'd find a different agent asap. Based on the two things you have shared he's not gonna be your best option.
Also, I work with two different agents. Neither of them ever charged for showings, I've never even heard of that. If it's clear you are not blowing smoke, are pre-approved and have the ability to buy then there should be no issue with showing properties.
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Jenifer Levini
Attorney · Santa Cruz, CA · Member since 2015 · 345 posts · 358 votes
9y
Is this in Santa Cruz, Ca? There are many great agents in this area. If one is questionable just go get a cuppa coffee and you'll meet 10 more. Although, the price range you listed seems far below market for this area. Maybe he/she is charging you an hourly price for his/her time to educate you about the real market prices. Come on over to our REI Meetup tomorrow at Discretion Brewery at 6:30. There will be a few realtors & many investors who can give you feedback.
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Irina Belkofer
Real Estate Broker · Cleveland, OH · Member since 2017 · 719 posts · 658 votes
9y
Originally posted by @Robert DeForge:

I can't imagine someone would charge hourly rate to show properties here ;) who would pay? We do have exclusive buyer's agency though - the buyer is committed to the agent and will pay the commission if he's going with another agent.
It's not common in Cleveland, at least, not everywhere, but very customary in other areas. Agents get paid only when you close the deal, all the time we show the properties - pretty much waste. Some clients know for sure what they want and make an offer on the very first property (which is not good also), but some keep looking and never close - they just don't know what they want and if they do want - not only investors.
Specifically, investors must see a lot of properties by themselves and then call agent when exterior and location is good. Prices for investments are really low here - you can buy as cheap as $500 per house, some agents just give the lock box code to their clients - so they wouldn't have to drive. I prefer to lose a client rather than my license.
We have plenty of "wannabe investor" people, who have no clue how all that works - neither about financing, nor about buildings - I'm not free educator. I've done my fair share of such education my first 3-4 years in business. Now I'm more comfortable to stay in my office and do marketing for my own properties.
1 Reply
Gary Lucido
Real Estate Agent · Chicago, IL · Member since 2017 · 53 posts · 48 votes
9y
We do offer our buyers, many of whom are investors, the option of paying us by the hour. Then we give them the commission. We have a lot of takers who know what they want and don't waste our time. They end up making money on the deal.
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Matthew Olszak
Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
9y
Originally posted by @Irina Belkofer:

Originally posted by @Robert DeForge:
I can't imagine someone would charge hourly rate to show properties here ;) who would pay? We do have exclusive buyer's agency though - the buyer is committed to the agent and will pay the commission if he's going with another agent.
It's not common in Cleveland, at least, not everywhere, but very customary in other areas. Agents get paid only when you close the deal, all the time we show the properties - pretty much waste. Some clients know for sure what they want and make an offer on the very first property (which is not good also), but some keep looking and never close - they just don't know what they want and if they do want - not only investors.
Specifically, investors must see a lot of properties by themselves and then call agent when exterior and location is good. Prices for investments are really low here - you can buy as cheap as $500 per house, some agents just give the lock box code to their clients - so they wouldn't have to drive. I prefer to lose a client rather than my license.
We have plenty of "wannabe investor" people, who have no clue how all that works - neither about financing, nor about buildings - I'm not free educator. I've done my fair share of such education my first 3-4 years in business. Now I'm more comfortable to stay in my office and do marketing for my own properties.
This is just terrible. First, yes, most buyers (not just investors) initially have no idea what they want - there are so many options out there! As part of my job as a broker, I take the time to consult with them and advise on the best path they can follow to narrow down their scope based on their situation. It takes getting to know a person and building a long-term relationship. Working with investors isn't like the one-off retail clients you are used to where you can dump any property on them and walk away knowing you won't get any more business from them for 6+ years on average.
FYI - "Investor" doesn't mean cheap-property-seeker. What do you call the folks who purchase a 2MM complex?
Again, yes, there are lots of time-wasters out there with no means to purchase, ever. But yet again, that's part of the job, qualifying your prospects. In a single meeting, I can set those folks on the right path to return to me in a year or 2 ready to buy.
You do you though. Apparently, we (investors) aren't worth the ever so valuable time you'd take to impart your vast knowledge upon us.
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Matthew Olszak
Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
9y
Originally posted by @Robert DeForge:
Ok, so I'm no REI guru (yet), I have purchased two primary residences, and have two other rentals, but I have never heard of an agent charging to look at a property that I'm going to use them to purchase. Am I old (don't answer that!), out of touch or just inexperienced? Or is the agent playing me?
As always, thank you BPers for your wisdom..
Context, as others have stated, is key. It sounds like you are a solid buyer, but of course the definition of "properties that make sense" is also key. If only 1 property out of 1000 will meet your requirements, I can somewhat understand this approach from the agent. But then again, it doesn't make sense that the agent would only make that money if you close. I'd move on to another. The agent's value shouldn't come from being the gatekeeper, it should be from the market knowledge/info they provide and also working as a filter so that you aren't looking at 50 different properties, and instead just the 2 or 3 that you'll actually offer on.
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Robert DeForge
OP
Investor · Santa Cruz, CA · Member since 2017 · 61 posts · 50 votes
9y
1 Reply
Irina Belkofer
Real Estate Broker · Cleveland, OH · Member since 2017 · 719 posts · 658 votes
9y
@Matthew Olszak how do you know what I'm used to?
And how I conduct my business? All my clients are investors and most of them are my friends already, but I do value loyalty more than anything.
So, yes, I do not work with people who use agents as a free transportation to see tons of houses. But it means more people for agents like you, doesn't it?
Every agent discuss what their client wants from the start, nobody rush to show houses without understanding - that's just stupid. But when I do 3-5 low ball offers - I don't understand if they really want to buy property or just to play the market.
My best clients always know the value of the houses even when I offer lower the offer. Because they are experienced investors.
Only newbies try to get lucky - and that's why I let them go with the listing agents - to practice.
Trust me - I've had my share of these, not interested. But again, there are plenty of new agents who would be glad to accompany them. Each their own.
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Irina Belkofer
Real Estate Broker · Cleveland, OH · Member since 2017 · 719 posts · 658 votes
9y
Originally posted by @Robert DeForge:

Wish it were the case )
People will find you anyway. I don't sell much on MLS though - it helps. But we have plenty of other way to buy investment real estate and I do help with that.
Mostly I o property management for my properties and my clients, so I don't have to drive around anymore....I've answered your question. Don't blame me if don't like the answer.
Asking client to pay fees per showing is a polite way to get rid of him. Why - you might know better. For one reason, your agent doesn't want to work with you - get another one. Buyer's agent is free for the buyer
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Matthew Olszak
Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
9y
@Irina Belkofer Just going off your own statements. You were the one who said "Working with investors is a huge waste of time". Backtrack and disparage me all you want, I was simply responding to your direct quotes. But you are obviously at a much higher professional level than I.
Good luck in your retail ventures.
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