Why Do I Need A Real Estate Agent?
Rental Property Investor · Rockville, MD · Member since 2018 · 23 posts · 17 votes
Why Do I Need A Real Estate Agent?
Most Popular Reply
Investor · Saint Louis, MO · Member since 2016 · 970 posts · 1k+ votes
7ySo I'm going to go against the grain here. I used to use agents, but now I don't. I'll work with a selling agent if there is one but taking one middleman out always helps in terms of communication. I think agents are good if 1. you are a noob homebuyer/investor who doesn't have time or doesn't know anything about the buying process. 2. you are a seller who doesn't have time or know the process. 3. trying to invest out of state/or your area of expertise.
Once you familiarize yourself with the process, you can do what an agent does and sometimes better. No more scheduling through them, cutting out costs, miscommunications, etc.
personally, my last 6 deals have been without buying agents. I'll take my 2 page office depot sales contract to the seller, have them sign it, and let the title company do most of my legal legwork. I have my appraiser/inspectors/contractors run through the place and give their reports to my bank and bam. 2 week close.
87 Replies
- Investor / Broker · Brooklyn, NY · Member since 2016 · 665 posts · 1k+ votes7y
Interesting Thread, I have to say!
I have been an Investor for 21 years and own $20 Million plus of Real Estate.
I became a RE Broker a year ago.
I will say that if I, as an Investor, were introduced to ME as a RE Broker.... I would be buying from ME!
Or is this getting really confusing?! haha!
Not only am I a skilled, proven Investor, but I can fund your multi-million dollar deal or at least point out a few lenders who can!
I will also tell you if you are buying in my market, and I really like your deal, I'll ask if you want to Partner for the deal.
What this does is two things. 1) If I am willing to Partner with you for this deal, IT'S a GOOD DEAL and 2) I'll also Manage our Investment cheaply. Additionally, you can learn as much as you can from me.
SO....... if you refuse to at least look into the right Broker..... you will miss someone like me! :)
Haha... anyway.. I'm touting my own horn a bit here, but I often wonder why I have friends and family who are not successful wind up with either no Broker or a Different Broker?! Makes no sense to me!
- Real Estate Broker · Cleveland, OH · Member since 2017 · 719 posts · 658 votes7y
Originally posted by @Doug Orchard:
@Lien Vuong agents are very recalcitrant if you don't have "pre approved " or you don't have POF or you have the temerity to make an offer that's considered lowball. If you contact an agent through Zillow you get to talk to their "liaison " who's job it is to tell you that it can't be done unless you have the above prerequisite. I'm sick of talking to realtors!
Why would any listing agent even to present an offer without POF or pre approval?!?
If you offerto buy a property, you must proof you have the ability
As for the selling agent (the buyer agent), they have right to not working with you unless they are sure you have the ability to make an offer. Making an offer is not just random low balling without any money in hope to get 100% financing maybe...eventually.
If you were a seller, would you consider to take your property off the market just to satisfy some wanna-be-buyer without any proof he's able to buy your house?
- Investor · Pacific City, OR · Member since 2016 · 175 posts · 123 votes7y
Like mentioned above, a realtor should have a great network and your back (another team member on your side).
Even seasoned investors use them, because of the realtor's local network.
In this game, a network is one of the most important things.
- Investor · San Jose, CA · Member since 2015 · 89 posts · 46 votes7y
@Stephen Witkowski
Going without an agent puts you in front of the line, you can ask the selling agent to represent you as well. Most information you need can be googled. Besides, the selling agent is morally obligated to have your best interest in mind. Then you can negotiate to lower their commisions and receive kickbacks. I have only used an agent once, on my first house. It's a huge advantage winning bids by going without an agent. Are agents helpful? Only experienced ones maybe. I have bought many properties without, and most times my offer was accepted was because I went without a buyer agent. I see more value going without.
- Las Vegas, NV · Member since 2018 · 405 posts · 474 votes7y
The listing agent represents the seller and has more of a relationship with them. Of course they’ll take your offer to the front of the line when you’re unrepresented. That also means they’re going to get a better commission, and their seller is likely to get a better deal, and you’re likely to pay more in the end, and waive most the contingencies that would help protect you from a bad deal. That commission kickback might make up for it, or it might not. Unrepresented buyer often means “easy target”. The best part of that is the unrepresented buyer doesn’t even realize it because they’re too excited about that little commission kickback at closing.
- Realtor · Las Vegas, NV · Member since 2018 · 218 posts · 147 votes7y
The selling agent is morally obligated to have your best interest in mind?? HAHA, now thats funny.. In many states, the listing agent wont even have a fiduciary duty to you, which means you've likely gotten fleeced in the past and didn't even know it..
Its all good, until its not good, and when it hits the fan you're screwed.. You gonna be your own lawyer too? Geez...
- Real Estate Agent · Houston, TX · Member since 2018 · 31 posts · 33 votes7y
@Stephen Witkowski
Do you need one?
Depends on your end goal.
Why should I find a real estate agent when looking to buy an investment property?
-You don’t have to. You could do the process alone if you already have all the systems in place to do it.
When should I involve an agent?
-This is so open ended....Have them pulls comps. As an agent I can pull and see what a home was exactly sold for and was it cash, fha, conventional etc. Maybe you come across a good property but hmmmm you don’t know any investors interested in that area that you could pass to them (an agent can see what investors have bought and sold in that area recently). Also maybe the sellers agent is not responding. Maybe you need help with negotiations. The list goes on....
Do you generally have one agent you work with, or does each property have its own agent?
-Most people will say they have one, I say delegate, divide and conquer. If your starting to shift from SFH to multi-family or commercial buildings wouldn't you want to lean on someone thats more experienced in that?
If your going into a new market connect with an investor friendly Realtor there that can provide you with knowledge on the market and connect you with other investors and wholesalers.
Use an agent as leverage. Have them set you up to receive auto emails from MLS, with the criteria you desire. You can do that separately on each site like Zillow, Realtor etc but all those sites feed from MLS. Do not fear us... we are not all terrible, some of us are striving to be investors ourselves.
- Investor · San Jose, CA · Member since 2015 · 89 posts · 46 votes7y
@Brandon Carriere
If you read carefully you would see that the selling agent becomes my agent as buyer, double agent. It’s very common in my area and I never got fleeced. lol
They must balance needs of both clients, received big discounts on commissions and nice kickbacks. Purchased over a dozen this way and counting....
Sorry, but agents are dinosaurs in my opinion. It’s not rocket science.
- Contractor · Jacksonville, FL · Member since 2017 · 1k+ posts · 2k+ votes7y@David Zheng You are spot on, couldnt agree more...
- 7yIan WalshBusiness MemberLender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
For MLS properties you will be working with a Realtor. You don't 'need' a Realtor, but the MLS is a fantastic lead source. It's one of many and knowing high quality Realtors can certainly plug you into deals you would not have had with out knowing them.
- Contractor · Jacksonville, FL · Member since 2017 · 1k+ posts · 2k+ votes7y@Stephen Witkowski Why do you need one? Actually you dont.. You may want to use one on your 1st deal maybe your 2nd deal at best and as you learn more you will realize it's something you can phase out and is not required to find good deals or be successful. Real estate agents are great people and they are very nice so nothing against them but it is not a requirement to use them to be successful in this business. With some self education and some diligence on your part you can perform the exact same duties that they do and utilize the same exact paperwork that they do. Sure...you dont get MLS access like they do and you cannot use your phone to open the fancy electronic lockboxes..but who cares...
- Rental Property Investor · Flint, MI · Member since 2017 · 17 posts · 19 votes7y
I'm going to be quick and to the point:
1) Real Estate agents know the business. They understand who pays for what, and how to get you a better contract. Each paragraph can screw you and/or cost you thousands of dollars. If I help a buyer (my client) purchase a "FSBO", or For Sale By Owner, I write their contract to 100% favour the buyer (And if people think that's shady, I must remind them it is my legal obligation).
2) They have a network. For instance, I work with a lot of investors but I'm also active with my church and other social organizations. Therefore, I seem to always know a potential buyer/seller.
There's nothing wrong with skipping an agent IF you know the business. But the rule of thumb is, it takes 10,000 hours to perfect a skill/trade. So until you've got the equivalent of five full time years in the business, I'd take all the help you can get! Then, consider getting your license to save costs. List your own properties and collect commissions on your purchases.
- Rental Property Investor · Austin, TX · Member since 2016 · 294 posts · 104 votes7y@Margie Pierce dual agent has an advantage if and only if the buyer knows what they are doing. I was licensed but let one of the agents to have a double dip. Not all but many agents will push the seller from the bridge to get extra comission. If one looks for their first time purchase, chances are that it will not work. You do need to know the contract. Well, not only the contract as it is written, but what is the commong thing to put into it. For example, the tax proration. You can put 100% or 110% of the previous year. This kind of things can add up and eventually the money will be lost. I would certainly recommend to get a license and do the first couple transactions with expierensed agents.
- Real Estate Agent · Colorado Springs · Member since 2016 · 22 posts · 13 votes7y
I've thought the same at times and I have to remind people sometimes that as a buyer you don't pay anything. A busy agent who has their finger on the pulse of the market will be able to provide well educated negotiation skills for you. It's different on the seller side but as a buyer and investors at that it's worth finding a great agent preferably one who has investing experience.
- Investor · Fairfax, VA · Member since 2017 · 57 posts · 22 votes7y
Originally posted by @Llewelyn A.:
Interesting Thread, I have to say!
I have been an Investor for 21 years and own $20 Million plus of Real Estate.
I became a RE Broker a year ago.
I will say that if I, as an Investor, were introduced to ME as a RE Broker.... I would be buying from ME!
Or is this getting really confusing?! haha!
Not only am I a skilled, proven Investor, but I can fund your multi-million dollar deal or at least point out a few lenders who can!
I will also tell you if you are buying in my market, and I really like your deal, I'll ask if you want to Partner for the deal.
What this does is two things. 1) If I am willing to Partner with you for this deal, IT'S a GOOD DEAL and 2) I'll also Manage our Investment cheaply. Additionally, you can learn as much as you can from me.
SO....... if you refuse to at least look into the right Broker..... you will miss someone like me! :)
Haha... anyway.. I'm touting my own horn a bit here, but I often wonder why I have friends and family who are not successful wind up with either no Broker or a Different Broker?! Makes no sense to me!
I'm sure investors would love to work with a broker like you in their markets. The problem is, everyone can talk the good talk, how do you really know who is a good broker in your local market?
- 7yLuke CarlPro MemberRental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
@Stephen Witkowski If you haven’t found an agent that answers that question for you then you haven’t found the right agent. In the investment business you have to have something to ofter them (easy to work with/buy a lot of properties) to get a good one. Simply asking this question means you’re a terrible client. But you can get better at!
- Lake Elsinore, CA · Member since 2018 · 235 posts · 300 votes7y
Originally posted by @Matthew Olszak:
Originally posted by @Doug Orchard:
@Lien Vuong agents are very recalcitrant if you don't have "pre approved " or you don't have POF or you have the temerity to make an offer that's considered lowball. If you contact an agent through Zillow you get to talk to their "liaison " who's job it is to tell you that it can't be done unless you have the above prerequisite. I'm sick of talking to realtors!
If you can't provide proof of how you are going to pay for a property you are offering to purchase, why do you expect a professional to work with you, potentially for months on end? Those who are preapproved or have cash in the bank have no issue providing proof. Even when the amounts are in the 7 digits.
This is just common professional decency. It lets everyone know that their time isn't being wasted.
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes7y
They are buyers who do not want agents and they tend to have a superiority complex where they feel they can do it better, cheaper, faster.
To them I say have at it and let experience teach you with your time and your money. You win big or lose big you OWN IT 100%. I often find these types when they make a big mistake they then try to dump their mistakes and blame others or try to get someone to help them out of a huge problem for very little compensation. I do not give these leads the time of day. I pretty much know by their tone in an e-mail and keywords they say.
Had one guy e-mail me on here saying he wants to buy commercial and has (access to funds). I asked him to clarify that statement. Is it 1031 exchange, cd, checking, savings account, stocks? Does he have partners who have most of the money? etc. CRICKETS For every 10 inquiries 3 to 4 might be real buyer who are ready, willing, and able to buy.
Unlike some other broker/agents models I purposely set up my business to NOT have to do volume if I so choose. I can have 10 deals a year at 100k each in commissions for commercial real estate and do very well. Some other broker/agents who work on the smaller residential stuff such as 50k have to pump out tons of sales to get to any sizeable number in commissions.
Buyers unless they are really established in that specific asset class have not developed relationships over years or decades like the broker/agent has. Each time I present a buyer to a developer, off market seller, another brokerage that has the listing my reputation goes on the line. If the deal does not happen as promised or the buyer is a flake it can tarnish the relationship for awhile into the future or permanently. The buyers think of the ONE DEAL but the broker/agent thinks about the LONG TERM relationship value at stake with each transaction.
For buyers to work with me I require 100% commitment to the business relationship and that they follow the steps to the program. I already have the commercial attorneys, capital market mortgage brokers, network of property owners,1031 exchange companies, etc. It's fine if they have their own companies in some of these categories already but I vet them because some say they will do these magical things that never happen and then derail a deal in process because they overpromise and under deliver.
If a buyer is a flake, rouge, or not with the program then I do not work with them or get rid of them right away if they do not come into compliance.
If buyers want deals from long term successful brokers and agents in the business then they need to buy into how those brokers/agents like to do business. If a broker/agent had a transaction take up most of their time and give them a massive headache they will remember that and want to stay away from that client again. Sometimes the buyers are clueless as to what they are doing or the impact of others. As a buyer make yourself delightful to deal with. I get some buyers inquire with me and they want references. I let them speak to a few of my other clients. My other clients confirm what I was thinking and tell me unsolicited I would never work with this person and you should not either. My clients thank me for the business, send gifts, etc. They want to stay TOP OF MIND for deals and the relationship. Buyers who are overdemanding and just users go to the bottom of the pile. I have lot's of quality buyers so I never need to speak to them or e-mail them again.
Hope it helps some.
- Property Manager · Raleigh, NC · Member since 2014 · 729 posts · 596 votes7y@Stephen Witkowski in reality, you do not need an agent. I have bought several houses with an agent and without. I will say I do not think I saved money by not using an agent. I paid about the same with an agent as without. if you are unfamiliar with the process, it may be good to use someone who is. I would not have wanted to buy my first house without an agent, but by house number 7or 8, I feel comfortable to not use an agent. now when it comes time to sell, not using an agent can save you money. or I might get real estate license when liquidating properties. but that is down the road.
- Rental Property Investor · Bennington, VT · Member since 2017 · 79 posts · 60 votes7y
I went straight to the listing agent for my first deal more out of necessity than an "I don't need no stinkin' agent" attitude or thinking I was gonna get a great deal by letting them double end it. I live in a slow market and like many others starting out I was just having difficulty even getting a buyer's agent to return my calls as soon as I say "multi family" or "investor." So I said heck with it I'm looking at the listing agent's contact right here on the MLS, might as well stop chasing after buyer's agents with my business.
In my case it worked out fine only because of all the education I've gotten from this site, I was confident running numbers on my own. I understood exactly who the agent works for and that I was only using them as the channel for communicating my offer to the sellers. Not surprisingly I had to press them for some of the less favorable information, such as oil bill records on a house that was poorly insulated with an antiquated boiler. In the end my opening offer was 65% of asking and we closed at 75% so I was happy with the outcome. From working with the listing agent I also got some information about the sellers that helped me put together an offer tailored to their needs. I've heard that said before, find out what is important to the seller besides money, and it definitely worked for me.
Well that got pretty long but the punchline is that I would definitely not recommend going unrepresented on the first deal IF you have good buyers agents in your area, but it can work out if you're having trouble connecting with anyone. In general I agree with the "if you have to ask, you should probably have an agent" sentiment.
- 7yLien VuongBusiness MemberReal Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
@Doug Orchard Sorry for some of my colleagues who have not supported you adequately. In reality that is a small percentage of us that do not know how to foster a relationship with a client and begin guiding them in their home purchase. Sure, it would be nice if the client came with a pre-approval and have an attorney they've already been working with but that's not always in case.
That's the differentiator of a diligent agent vs. one that's looking for a one shot deal. I find it rewarding to help my clients along the process and make recommendations of what is appropriate for them in the investing or home purchase journey.
I think that the BP community would be able to recommend you some good investor friendly agents in the local area who can foster that relationship for you.
The Elle Group5153 Reviews - Member since 2018 · 4 posts · 7 votes7y
You don't "need" an agent in 2018. I know, I know, I already have my fire extinguisher ready for all the agents I just angered...
In the 80s when there was no Internet agents had enough control they could make themselves a necessity. But thankfully those days are gone. Now, with plenty of good sites and every person in the US having a camera in their pocket there is no reason deals can't be done without a traditional seller agent relationship. Why do I care? BECAUSE IT'S VERY VERY INEFFICIENT! It is absolutely madness to give someone a percentage of a selling price when often it's just timing and condition that decides if a house sells. The house next door to me sold a few weeks ago but was pending before it actually hit the mls because the buyer and seller knew each other... so why did they give up 8k in commissions?? And now take 8k and put it into a 15 or 30yr loan and watch it turn into 12-15k depending on interest. That's utter stupidity, great for an agent, but stupidity for the buyer who, considering his job, will likely give up an entire years worth of savings just to cover this. Talk about opportunity cost!
When I bought my house years ago I had an agent which did nothing but take a list of addresses and get lock box numbers so we could see inside. I found the properties, I did the research, I looked up the tax, I made the decision. He collected 7k for opening a door on a Saturday afternoon. And for all of you spitting angrily at your screen right now yelling, "but who closed the deal and did the contracts?!!", yes I know, he did have my sign a standard contract which he torn off of a pad of copies (also available from the internet), but who did all the real work? Title agency- title search, transfer, deed filing w county and final closing- I paid them, and it cost me 500.00. So in review, the poor lady that actually did all of the real work was happy to do so for 500.00, and the agent attended the closing after doing nothing for me but having the credentials to open a lock box for 7k. And dont even let me start on my parents doing the same finding their own houses and then getting the lockbox opening service and paying almost 30k for an agents 2 saturdays. Utter rip off, but nothing you can do at this point when someone is silly enough to sign an agent, you can't get out of it if you want that property and they know it. They get their percent if you contact the listing agent or bring your own, so of course you bring your own and the cycle continues, the seller sees the agency as a necessity and people believe it.
In summary, I have plenty of other negative experiences involving agents including the rentals I never bought because the agent was doing such a poor job I went and got another agent which he was informed of before hand, but then he tried to collect anyways with precuring costs, which in turn raised my price. Or, the local ripoff agent which places his signs awhile without using the mls so that he can get dual commission, yeah there are rules but it still works.
I cannot express enough the urgent need for agencies on commission to be replaced with fee only services by professionals that have incentive to care. These professionals like everyone else should have a reason to do a good job to be paid, not immediately have you by the wallet long term when you sign up with them. I feel this horrible situation is kept up by the false belief that agents are taking care of you, when in fact they likely only present you with properties that give them higher commission. Are you selling me the property I really want?? How about I pay you a flat fee regardless of what I buy, either by another agent or owner and then I'll know your not being influenced by your own interest. Even if they see your dream home fsbo, they won't show you because AGENTS WILL ONLY SHOW YOU PROPERTY BY OTHER AGENTS. It's a very poor system and the incentive is not there to do a good job. Ultimately you as a buyer or seller agree to the terms, the agent is just a consultant, and keep in mind again that the title agency does most of the work for a very fair price. I guess what makes me the most upset isn't that agents get used and paid so much, it's that they turn and use this money to keep themselves in power. I've had friends sell their houses on craigslist and Facebook in days without issue, but keep in mind that many fsbo listing's don't get sold because the owner is unrealistic, doesn't end up on the mls to get the exposure, or buyers are steered away by the "professional" they are trusting in who is looking out only for their next winning lotto ticket.
Their is an NCR museum close to home full of cash registers, and then I go to the grocery and see NCR on the self checkouts... good job guys way to keep up with the times! NCR could've spent all their resources convincing customers that cash registers were the only way, and they would still get the job done today- and the checkout clerks would still have their jobs too- but this is the 21st century and technology changed things. It's time for agencies to step up and offer fee only services a la carte like appraisals, photos, staging to sellers, and comps reviews, inspection's management to buyers - IF YOU SO CHOOSE, NOT REQUIRED!
Honestly I just wish zillow could become the biggest site snd have the power to steer the industry, right now there are so many sites people are scattered, and like I said before agents have you for months once you sign so they have no incentive to perform just list and forget it, it's like fishing, eventually you'll get a bite.
- Investor · Los Angeles, CA · Member since 2017 · 523 posts · 476 votes7y
Former agent (a number of years ago) and current investor here. A good buyer's agent is very helpful, especially for your first 3 or 4 deals. If you are going to do out of state, you definitely want a few good agents there. You aren't going to be on the ground the way they are, no matter how much research you do.
If investing locally, I think the first few deals with an agent makes sense. After that, it depends. I think having relationships with agents, and letting them bring you deals (even as a buyer's agent), is a great idea. But getting your own license and MLS access can't hurt either, and when you know what is a good deal, and every aspect of due diligence, you can jump in and handle things yourself. I am less than 5 deals in myself, so not yet there, but once I hit that mark, I plan on getting a license & using MLS on my own, and also working with buyer's agents where it makes sense!
- Specialist · Tacoma, WA · Member since 2016 · 73 posts · 30 votes7y
Thanks for the input I am considering getting my license.
- Specialist · Tacoma, WA · Member since 2016 · 73 posts · 30 votes7y
Lien Vuong thank you for your comments.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.