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..
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.
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.
I have had ZERO luck with listing agents on distressed properties. I agree with you. It makes ALL the sense in the world for the agent to "double dip" the commission on a low priced property. I literally can't get any listing agent to call me back. My last deal, I had to do some super sleuthing since two weeks of emailing and calling the listing agent and the principal broker netted nada. I cold called a bunch of phone numbers off a Google search. The actual owner called me back and asked why I was calling him directly. After a brief phone call, I had an agent from the listing brokerage calling me within minutes.
I closed the cash deal a few weeks later.
My new strategy is to always have a buyers agent as most real estate agents are lazy as hell. The barriers to entry are near zero and it shows. At least with a buyers agent, I can get an offer presented. Since the commission on a $30k deal is peanuts, I get the new girl/guy but I don't care. I've already run my numbers.
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?"
NO FREAKING WAY! I sold RE for 5 years. Find another agent. Run your numbers before looking at any property. Drive by before seeing with agent as you may find out you don't like the neighborhood and you won't waste his/her time with those. If the agent knows you are doing this before going to look, s/he will respect that.
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.
I have had ZERO luck with listing agents on distressed properties. I agree with you. It makes ALL the sense in the world for the agent to "double dip" the commission on a low priced property. I literally can't get any listing agent to call me back. My last deal, I had to do some super sleuthing since two weeks of emailing and calling the listing agent and the principal broker netted nada. I cold called a bunch of phone numbers off a Google search. The actual owner called me back and asked why I was calling him directly. After a brief phone call, I had an agent from the listing brokerage calling me within minutes.
I closed the cash deal a few weeks later.
My new strategy is to always have a buyers agent as most real estate agents are lazy as hell. The barriers to entry are near zero and it shows. At least with a buyers agent, I can get an offer presented. Since the commission on a $30k deal is peanuts, I get the new girl/guy but I don't care. I've already run my numbers.
Hmm ... I would suspect a few things going on in your case ... first, as you've mentioned, commissions on a $30k deal is peanuts, so why would any agent, be it the listing agent or buyer's agent be interested in doing much of anything for you. In that price range, I would try to go off market to find the owners directly ... but honestly, the better advice may be don't play in that space unless you already have vast experience in it or that is all you can afford ... I think the risks across the board and the caliber of professionals you are likely to encounter would go up a good deal if you look at $100k+ properties ... that is not to say there are NO good professional agents etc. working in $30k properties, just that the incentives are not there and I'd bet the good ones are working more exclusively with huge investors in high volume.
It doesn't make sense that the buyer's agent would help you much, though, because the buyer's agent would have to deal with all the same lazy listing agents anyhow, just as you would going directly to them ... but hey, if it works, go for it.
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.
The problem with agents showing properties and never making a sale with that buyer is that they never properly qualified the buyer, or the agent never showed the buyer the value of working exclusively with that agent. Using a GOOD buyer's agent can have huge advantages. I used to contract my buyers to me. Never had 1 who didn't buy through me. Never HAD to let a buyer out of contract or pay me extra commission. I was in RE as an agent/broker when my area agents were listing houses for 4%-5% (I was listing them at 6-8%) so they were offering out only 2-2.5%. My buyers all agreed in the contract I would get 3%. I always got it from the seller or their agent. Except 1 time. I don't remember if I screwed up and overlooked what was being offered out and didn't write it into the offer but my buyer was "on the hook" for 0.5% on an $80K first purchase and her financing was so tight I "waived" the 0.5%.
A bit unusual for someone pre-approved and an active buyer. If you're ever looking in Panama City Beach, FL we would be happy to help.