Is it REALLY possible to find a good deal using an agent?

34 Replies

As a first step I decided to contact a local agent. I basically told her what i was looking for and asked if she'd send me houses in my price-range.

I guess it can't hurt. I'm just always a little skeptical when handed something without me having to work for it. I just assumed good deals our found through hard work looking for them. Using an agent just seems too easy and straight-forward. What does anyone think about this? What sort of success, or non-success, has anybody had using agents?

Thanks, Bill

If your greatest skill is finding deals, a realtor probably won't help much. I run my business by doing what I do best, and leveraging the skills of others to complement my skills to build a successful team. My realtor has access to things that I don't, so I use his resources to help me build my business.

Use the agent to show you properties and use your negotiating skills to turn them into deals

Originally posted by @John Thedford :

Use the agent to show you properties and use your negotiating skills to turn them into deals

Yeah. For me I think negotiation will be relatively easy because i have a number in mind in terms of cash-flow and return. And if they won't negotiate to where I can achieve those numbers, it's probably not the property for me.

I'm not looking to knock it out of the park on my first deal. And, in fact, might take 10 or 20 deals to get to where I want to be. Thanks

There is no such thing as a good deal. People convince them selves they got a good deal, but they are just lying to themselves. A property is worth what someone is willing to pay and someone else is willing to sell it for.

Originally posted by @Russell Brazil :

There is no such thing as a good deal. People convince them selves they got a good deal, but they are just lying to themselves. A property is worth what someone is willing to pay and someone else is willing to sell it for.

I follow part of this but if someone buys at a good discount under FMV I would consider that a "good deal". How far under we can all disagree on:)

@Russell Brazil how are you investing in real estate if there are no good deals? A deal is good based on your goals. If I can buy a property, invest money in a rehab, and make a good return, that's a good deal for my investment goals. Plenty of good deals for me, and others, out there.

William, I would not look at it as being handed to you without working to find it. I've learned in business to not make anything harder than it actually is. Having agents send you deals is a great way to leverage your own system.

However, I would not trust anyone's judgement. Whenever they send the deal just analyze it for yourself and make a decision. As an investor, you always want to have good deal flow because only a small % of what you come across will be worth it. That is why partnering with local agents/brokers can be a great way of getting that flow going, not to mention you may find partnership opportunities.

Also, agents like myself, farm their local market vigorously (or at least they should). I currently have a list of 53 sellers that would be interested in selling but just don't want to list yet. I would advise farming yourself and then have your agents farm as well. Make sure to communicate with them regularly so they know you're still on board and you aren't wasting their time.

Hope this helps!

You will have to work for it.  The chances of selecting one agent and having a successful investment deal pipeline are slim to none.  The best investor agents have established clients and working your way into that pecking order can be tough.  Working with an agent who is not familiar with rentals can take time as well...not all agents will be able or willing to do it.  Finding financial investments is far different than finding a good school district or an open floor plan.  You have taken a great first step...there are many steps that will follow.

Originally posted by @Ryan Beasley :

William, I would not look at it as being handed to you without working to find it. I've learned in business to not make anything harder than it actually is. Having agents send you deals is a great way to leverage your own system.

However, I would not trust anyone's judgement. Whenever they send the deal just analyze it for yourself and make a decision. As an investor, you always want to have good deal flow because only a small % of what you come across will be worth it. That is why partnering with local agents/brokers can be a great way of getting that flow going, not to mention you may find partnership opportunities.

Also, agents like myself, farm their local market vigorously (or at least they should). I currently have a list of 53 sellers that would be interested in selling but just don't want to list yet. I would advise farming yourself and then have your agents farm as well. Make sure to communicate with them regularly so they know you're still on board and you aren't wasting their time.

Hope this helps!

 Yes, that helps. Contacting the agent was the first step in growing my network. And I'll make sure I keep in contact with them. Thanks

Maybe in a buyer's market

Yes .  There are a ton of very good investor friendly agents.

Of course you can. Keep in mind that not all RA are REI friendly. Find the RA that will work with you and understand the difference between what a homeowner wants and a REI wants.

Your first clue is if the RA wants you, as a REI, to sign an exclusive agreement with them. If they want that, you don't want them...walk away.

Originally posted by @Joe Villeneuve :

Of course you can. Keep in mind that not all RA are REI friendly. Find the RA that will work with you and understand the difference between what a homeowner wants and a REI wants.

Your first clue is if the RA wants you, as a REI, to sign an exclusive agreement with them. If they want that, you don't want them...walk away.

 I've made it clear that i'm looking for an investment, not a home for myself. Im going to stay in touch with her to let her know im serious. If after that she thows terms of exclusivity at me, ill walk. Thanks for the advice.

She mentioned, based on my budget, i might want to think about buying a condo or townhome. I basically said, if the money is right, ill consider anything. What do you think about renting out a condo or townhouse?

@William Pope

"What do you think about renting out a condo or townhouse?"

Make sure you find out if there is an HOA involved. Then make sure the rules would allow you to rent it out and figure in any fees into your calculations.

Originally posted by @William Pope :
Originally posted by @Joe Villeneuve:

Of course you can. Keep in mind that not all RA are REI friendly. Find the RA that will work with you and understand the difference between what a homeowner wants and a REI wants.

Your first clue is if the RA wants you, as a REI, to sign an exclusive agreement with them. If they want that, you don't want them...walk away.

 I've made it clear that i'm looking for an investment, not a home for myself. Im going to stay in touch with her to let her know im serious. If after that she thows terms of exclusivity at me, ill walk. Thanks for the advice.

She mentioned, based on my budget, i might want to think about buying a condo or townhome. I basically said, if the money is right, ill consider anything. What do you think about renting out a condo or townhouse?

 Not big on attached units.  How did she arrive at the conclusion your budget dictates a Condo or townhouse?

Originally posted by @Joe Villeneuve :
Originally posted by @William Pope:
Originally posted by @Joe Villeneuve:

Of course you can. Keep in mind that not all RA are REI friendly. Find the RA that will work with you and understand the difference between what a homeowner wants and a REI wants.

Your first clue is if the RA wants you, as a REI, to sign an exclusive agreement with them. If they want that, you don't want them...walk away.

 I've made it clear that i'm looking for an investment, not a home for myself. Im going to stay in touch with her to let her know im serious. If after that she thows terms of exclusivity at me, ill walk. Thanks for the advice.

She mentioned, based on my budget, i might want to think about buying a condo or townhome. I basically said, if the money is right, ill consider anything. What do you think about renting out a condo or townhouse?

 Not big on attached units.  How did she arrive at the conclusion your budget dictates a Condo or townhouse?

 I think she was trying to find something in my budget which would still attract commuters because of distance to pubtrans. Easier to rent, i suppose. 

I gave her a higher budget to work with. Lets see what she sends me. Thanks

I really like this thread, lots of good input here. I've been wondering the same thing myself, especially since I know a few of the local brokers. It almost feels like it would be worth it to have another set of eyes looking for possible deals.

Yes you can but the deals that come up will be few and far between. The only way you can guarantee deal flow is to have different lead generating sources you work on.

I was able to find a "good deal" on MLS using an agent...however..

It was not the agent who found the property.

It was not the agent who researched the area.

It was not the agent who went to the open house.

It was not the agent who saw the potential in a run-down 4-unit.

It was not the agent who decided to pull the trigger and make an offer.

As someone mentioned above using an agent for their resources is a major benefit to you. Don't rely on them to find a "good deal". You need to do 90% of the work and the other 10% comes from access to MLS and the ability to set up open houses and submit offers.

Best of luck!

Originally posted by @Steve DellaPelle :

I was able to find a "good deal" on MLS using an agent...however..

It was not the agent who found the property.

It was not the agent who researched the area.

It was not the agent who went to the open house.

It was not the agent who saw the potential in a run-down 4-unit.

It was not the agent who decided to pull the trigger and make an offer.

As someone mentioned above using an agent for their resources is a major benefit to you. Don't rely on them to find a "good deal". You need to do 90% of the work and the other 10% comes from access to MLS and the ability to set up open houses and submit offers.

Best of luck!

So the agent allowed you to log on to MLS using their account? I dont know how it works exactly. If this agent im working with would allow me access, id totally do the work. Thanks, Bill

@William Pope Yes! Once I hired him as an agent he gave me access to a website that was linked with MLS and I was able to search for properties on there. Better yet I could put in different criteria to have a report sent to me every morning with homes meeting certain requirements.

You should ask about this as it was very helpful!

"Use the agent to show you properties and use your negotiating skills to turn them into deals."

That's worked for me. My last deal (closed in October) was one I went to see with my agent (who is also an investor). The seller was asking $148,000. I put in an offer of $135,000 and they took it. The lady had actually gotten a better offer, but drug her feet accepting it, and the would-be buyer withdrew the offer, so when I came along, she was ready to simply have it over with. Then I negotiated another $2,900 in seller's concessions based on some issues found in the inspection (that were all moot when it came to renting the place). The house appraised for $147,000 as is - it actually held up closing because our mortgage lender had all sorts of questions for the appraiser as to why it appraised so high in comparison to the sales price. 

As with Steve's comment above though, I do the leg work. I'd never sit back and wait for my agent to "send me deals." She shows me the houses I identify as potential deals and submits the offers. 

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If you work with a realtor it does not mean you were handed the property easily. You will need to take your contractor to evaluate the property and give you a repair estimate. Then you will work with the realtor to evaluate comps, days on market and ARV. You basically work as a team. You do need a power team.

I work with flippers and I am there finding the properties, evaluating comps, walking thru with the client and contractor and then working with the investor to formulate the best possible deal for them and taking into account a cushion for the unexpected.

Look at it as you need a power team.

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