Are Real Estate Agents Clueless on how to work with Investors?
Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 409 votes
Are Real Estate Agents Clueless on how to work with Investors?
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
2yAre you offering them upfront fees?
I'm guessing not. So if you aren't willing to pay them upfront, and you arnt willing to enter a buyer/broker agreement to make sure they get paid when they close.....then why would they want to work with you?
It's a business. They got to get paid. If you arnt paying, then they arnt working for you.
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- Rental Property Investor · Raleigh, NC · Member since 2016 · 396 posts · 995 votes2y
Quote from @James McGovern:
Always willling to pay for value created. Sadly, many want the agreement in place BEFORE they have shown a property or did anythingIf you're willing to pay, then why are you so unwilling to sign a document that says that you are willing to pay? Tailoring the document to include compensation only for homes that the agent assists you with should only take 30 seconds to type up, and many probably already have a standardized template document that covers that exact situation.
Quote: that was a court settlement, not a law
It's a pretty straight forward scenario, so I'm not sure why you keep arguing with people who are responding to your post. It really doesn't matter if you agree with the law or not, no realtor is going to touch you without signing something first. The chances of someone being an agent but not a Realtor, not having MLS access, and yet somehow still have a vibrant off-market deal list, with no buyers system already lined up, is virtually zero.A decision by a court is law. There are several different types of law, including case law, statutory law, constitutional law, regulatory law etc.
- 2yPeter TverdovBusiness MemberDeveloper · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes
This mindset continues to blow my mind from people. I had someone the other day who brags to me that he only goes to the listing agent...crying to me why I didn't let him know about an off-market deal that closed where I found it for my buyer.
Why on earth would I try to help you when you clearly see little value in me and think we're all the same? I have 200 clients I work with and many who have done deals with me already. I am going to cut all of them in line to give you a potential opportunity? How does that make any sense?
I get an inquiry every other week from someone like OP who just wants off-market stuff, doesn't want any help listing or on the MLS or when they sell their Home Depot grade flip they want 1% listing fee. Then you guys call the realtors dumb lol...maybe you are the dumb one?
- 2yAlecia LovelessPro MemberMember since 2019 · 3k+ posts · 2k+ votes
@James McGovern I tend to get many pocket listings shown to me, and often I’m the first one to get a chance at those properties.
If they make sense I buy them if not I pass and the agent moves on to another buyer.
My agent is happy to show me anything I’m interested in.
Truthfully though it's rare that he sends me listings that are just off the MLS. I have several MLS searches set up that do that for me.
- Member since 2021 · 107 posts · 82 votes2y
My standing deal with my agent is that I will pay her a minimum of 2500 for any home she shows me that we end up closing on - that applies to on market or off market (most homes I buy are 75k-200K hence the low amount). It's written in the contract that way and we add homes that she shows me to the contract list. If the seller is paying a larger commission then she gets that but if it's no commission from the seller or less than 2500, then I pay it or make up the difference.
- 2yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
Everyone does things differently. I've bought almost all of my places on MLS, but working with an agent, I was able to get in first to see some of the new listings. Find an agent who you work well with and stick with them. I have an agent in each of the two areas I have rentals in (they are no where near each other) and if I need to buy or sell, I will use them. If a good deal comes up that they hear about, they contact me and ask if I'm interested.
Before I got my license I would find off market deals for myself by driving for dollars, buying lists and cold calling, sending mailers, networking, skip tracing, going to meetups/ local REIA meetings, building relationships with agents, etc. I've done some of that for a few special buyer clients since getting my license but only if they had cash ready and were looking for properties in the $2M+ price point (100% of the time with an exclusive agency agreement in place, I've never ever worked without one and never ever will whether it's a law or not) because it's a lot of work. I don't do that much of this type of thing anymore because I'm busy enough working on easier deals now. I'll still send off market properties that come across my desk to the buyers I know who have cash ready and will close fast without being a jerk. It sounds like you just don't have that type of relationship with any agents in your area yet, or you're shopping for properties that aren't worth the effort for an agent to beat the bushes to find for you, or you're not the kind of buyer who agents will send their off market deals to. That doesn't mean agents are clueless on how to work with investors as you say. It's also possible that spending time with you pays them less than spending time with someone else. If I were you I'd just start looking for off market deals myself.
- Developer · Member since 2023 · 73 posts · 43 votes2y
Real estate agents with experience are the professionals, and from an agent's perspective it's often the investors who aren't. It sounds like you don't know how to work with agents, how to filter for an agent that is right for you, or how you need to work with them as a partner, so that you aren't just focused on yourself. If you come across as selfish and ignore those on your team, you shouldn't expect to make any progress in this industry.
An agent isn't going to send you amazing 'deals' just because you ask them to. If they're any good, they will take down any deal they find themselves or send it to a preferred list of people they have already been working with, who they trust to respond quickly, close reliably, solve problems effectively, and be pleasant to work with.You come across as rather arrogant in your posts. Might want to tone it down if you genuinely want to learn from others, unless you just think you know everything, in which case you shouldn't be posting questions or voicing frustration, as you'd have solved everything and have a well-oiled operation in place....
- Real Estate Broker · Omaha NE · Member since 2019 · 30 posts · 31 votes2y
Quote from @Peter Tverdov:
This mindset continues to blow my mind from people. I had someone the other day who brags to me that he only goes to the listing agent...crying to me why I didn't let him know about an off-market deal that closed where I found it for my buyer.
Why on earth would I try to help you when you clearly see little value in me and think we're all the same? I have 200 clients I work with and many who have done deals with me already. I am going to cut all of them in line to give you a potential opportunity? How does that make any sense?
I get an inquiry every other week from someone like OP who just wants off-market stuff, doesn't want any help listing or on the MLS or when they sell their Home Depot grade flip they want 1% listing fee. Then you guys call the realtors dumb lol...maybe you are the dumb one?
Preach it brother! When I find an off market deal I have along list of investors I will notify that that have used me in the past and value our relationship. I have made numerous clients extremely wealthy. They are smart enough to realize that the fees they pay me will make them much more in the long run. Some of the transactions are very easy and some are not. They are smart enough to know they will make a great amount of money in the long run.
Investors like the OP seem to think they are doing us a favor. - 2yJoshua JanusBusiness MemberRealtor · Cleveland, OH · Member since 2021 · 1k+ posts · 1k+ votes
Quote from @Jeff Allen:
Quote from @Peter Tverdov:
This mindset continues to blow my mind from people. I had someone the other day who brags to me that he only goes to the listing agent...crying to me why I didn't let him know about an off-market deal that closed where I found it for my buyer.
Why on earth would I try to help you when you clearly see little value in me and think we're all the same? I have 200 clients I work with and many who have done deals with me already. I am going to cut all of them in line to give you a potential opportunity? How does that make any sense?
I get an inquiry every other week from someone like OP who just wants off-market stuff, doesn't want any help listing or on the MLS or when they sell their Home Depot grade flip they want 1% listing fee. Then you guys call the realtors dumb lol...maybe you are the dumb one?
Preach it brother! When I find an off market deal I have along list of investors I will notify that that have used me in the past and value our relationship. I have made numerous clients extremely wealthy. They are smart enough to realize that the fees they pay me will make them much more in the long run. Some of the transactions are very easy and some are not. They are smart enough to know they will make a great amount of money in the long run.
Investors like the OP seem to think they are doing us a favor.That's what I'm talking about Jeff! I do the same in the Cleveland, OH market. If a new investors constantly pesters about fees, an off market agreement (not exclusive) or something then they probably aren't that serious. You can help make investors millions over the years by bringing them off market deals.
- 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Joshua Janus:
Quote from @Jeff Allen:
Quote from @Peter Tverdov:
This mindset continues to blow my mind from people. I had someone the other day who brags to me that he only goes to the listing agent...crying to me why I didn't let him know about an off-market deal that closed where I found it for my buyer.
Why on earth would I try to help you when you clearly see little value in me and think we're all the same? I have 200 clients I work with and many who have done deals with me already. I am going to cut all of them in line to give you a potential opportunity? How does that make any sense?
I get an inquiry every other week from someone like OP who just wants off-market stuff, doesn't want any help listing or on the MLS or when they sell their Home Depot grade flip they want 1% listing fee. Then you guys call the realtors dumb lol...maybe you are the dumb one?
Preach it brother! When I find an off market deal I have along list of investors I will notify that that have used me in the past and value our relationship. I have made numerous clients extremely wealthy. They are smart enough to realize that the fees they pay me will make them much more in the long run. Some of the transactions are very easy and some are not. They are smart enough to know they will make a great amount of money in the long run.
Investors like the OP seem to think they are doing us a favor.That's what I'm talking about Jeff! I do the same in the Cleveland, OH market. If a new investors constantly pesters about fees, an off market agreement (not exclusive) or something then they probably aren't that serious. You can help make investors millions over the years by bringing them off market deals.
always wondered who was pod cast numero uno - Real Estate Broker · Cleveland, OH · Member since 2023 · 243 posts · 85 votes2y
"🚨 Real estate rescue alert! Jimmy's been treed! Let's give him a hand. 🌳✋
As my barber once told me, good haircuts aren’t cheap and cheap haircuts aren’t good.
A good investor-agent comes at a premium as they should. Less than 10% of agents are investors, so if you find a good one, hold on to them.
The notion that investor-agents are taking up all the good deals is ludicrous.
The economic model of an agent is to sell units not owned them unlike the economic model of an investor is to own and sometimes wholesale. The overlap is statistically insignificant.
I hear so-called investors crying there are no deals on the MLS. Then I log-on to the MLS and I find more deals than I can buy. The real issue is that many investors don't know what a deal looks like. Ask an investor to tell you their buy & hold or flip economic model and they start stuttering.
For that reason, I require every investor I work with to complete an investment economic model/proforma. On Buy & Hold: They must have at least six months’ worth of operating expenses in addition to downpayment if financing, closing costs and improvement funds if they are upgrading the property. For Flips: at least 50% of liquid cash for unexpected expenses or cost overruns of the property’s rehab budget additional to downpayment financing, closing costs and improvement funds.
Too often you hear investors blaming the realtor for their poor decisions. These investors often are inexperienced, underfunded, and unrealistic in their expectations. They hire the so-called investor-friendly realtor and they start bad mouthing all realtors.
They are using arbitrary numbers when evaluating deals (vacancy 10%, maintenance 10%). Grasshopper, the arbitrary numbers are for illustrative purposes ONLY! You must use numbers that are representative of the property’s condition if you are not going to renovate it before putting it in service.
They expect the property manager to work magic wthe their scrapy selected properties. They wonder why the property doesn’t rent quickly and can’t command top market rent when the kitchen and baths are dated, and the property overall vibe/aesthetic is lacking luster.
Information is readily available, and I understand it can be difficult at times to discern the trash, the selling from the substance. Therefore, it is critical to align yourself with someone (investor or investor-agent) that is successfully doing what you want to do.
Lastly, the proper way to leverage an investor-agent/professional investor is to make them your acquisition and sales specialist. Send them every deal to evaluate. It does not matter where the deal comes from, off-market or wholesalers. And to the nay sayers, “hold my beer.” An investor-agent evaluates deals for a living. Yes, it is their full-time job. I see investors’ ignorance, egos, and many times lack of local knowledge get the best of them. Get a proper compensation agreement with your investor-agent, and you’ll have no problem finding deals!
Stop the blaming game and the scarcity mindset, there are plenty of deals to go around.
- 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Gladimir Lobo:
"🚨 Real estate rescue alert! Jimmy's been treed! Let's give him a hand. 🌳✋
As my barber once told me, good haircuts aren’t cheap and cheap haircuts aren’t good.
A good investor-agent comes at a premium as they should. Less than 10% of agents are investors, so if you find a good one, hold on to them.
The notion that investor-agents are taking up all the good deals is ludicrous.
The economic model of an agent is to sell units not owned them unlike the economic model of an investor is to own and sometimes wholesale. The overlap is statistically insignificant.
I hear so-called investors crying there are no deals on the MLS. Then I log-on to the MLS and I find more deals than I can buy. The real issue is that many investors don't know what a deal looks like. Ask an investor to tell you their buy & hold or flip economic model and they start stuttering.
For that reason, I require every investor I work with to complete an investment economic model/proforma. On Buy & Hold: They must have at least six months’ worth of operating expenses in addition to downpayment if financing, closing costs and improvement funds if they are upgrading the property. For Flips: at least 50% of liquid cash for unexpected expenses or cost overruns of the property’s rehab budget additional to downpayment financing, closing costs and improvement funds.
Too often you hear investors blaming the realtor for their poor decisions. These investors often are inexperienced, underfunded, and unrealistic in their expectations. They hire the so-called investor-friendly realtor and they start bad mouthing all realtors.
They are using arbitrary numbers when evaluating deals (vacancy 10%, maintenance 10%). Grasshopper, the arbitrary numbers are for illustrative purposes ONLY! You must use numbers that are representative of the property’s condition if you are not going to renovate it before putting it in service.
They expect the property manager to work magic wthe their scrapy selected properties. They wonder why the property doesn’t rent quickly and can’t command top market rent when the kitchen and baths are dated, and the property overall vibe/aesthetic is lacking luster.
Information is readily available, and I understand it can be difficult at times to discern the trash, the selling from the substance. Therefore, it is critical to align yourself with someone (investor or investor-agent) that is successfully doing what you want to do.
Lastly, the proper way to leverage an investor-agent/professional investor is to make them your acquisition and sales specialist. Send them every deal to evaluate. It does not matter where the deal comes from, off-market or wholesalers. And to the nay sayers, “hold my beer.” An investor-agent evaluates deals for a living. Yes, it is their full-time job. I see investors’ ignorance, egos, and many times lack of local knowledge get the best of them. Get a proper compensation agreement with your investor-agent, and you’ll have no problem finding deals!
Stop the blaming game and the scarcity mindset, there are plenty of deals to go around.
good all around post.. only thing I slightly disagree with is having your agent look at every deal your looking at.. that would have the agent bogged down with busy work.. the investor should know what a deal is by just the big numbers.. they dont need to run calculators on simple rentals use 50% of gross income for expenses to start.. if you do better fine .. but if it does not cut it 50% or a little lower then its no go .. and on to the next.. napkin math. - 2yAdam BartomeoBusiness MemberReal Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes
There are 2 factors here, Retail Real Estate Sales and Wholesale Real Estate Sales. The real issue is that you don't understand the 2.
1. Retail - These agents don't normally have off market listings, most of them are boobs, and the industry just changed where it is going to be required to have a Buyer Broker agreement. You don't seem to understand this and may want to educate yourself on the ongoings in real estate.
2. Wholesale/Off market - These agents or wholesalers provide the best deals to proven investors first, the ones that they have built trust with have proven themselves. When you are building a relationship with them you have to build trust to get the scoop on the better deals.
Based on your short post it sounds like you are a little newer to RE and may want to seek out an experienced investor to work with for your first few deals. This will help you get educated and build relationships with the right people.
Bartomeo Property Management4.7156 Reviews - 2yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
Don’t know why the OP HATES real estate brokers so much, but ….so be it. I’m sure in the universe of real estate brokers there are good and bad. Most residential agents aren’t proficient in INVESTMENT property, and hence wouldn’t deliver satisfactory results when utilized by investors.
Our hard money loans (commercial real estate) and the existing loans we purchase are usually brought to us by mortgage brokers. About 3 years ago we had an unbelievably juicy deal that a banking institution needed to get rid of brought to us by a broker who had spent a full year following up, selling, negotiating, contacting, etc until he had a deal. He intended to syndicate it himself, but couldn’t line up the investors, so contacted me. He wanted a $40k commission. When we bought this note at a $1 million + discount, I not only paid him the $40k he asked for - I added a $100,000.00 bonus! Guess who brings me EVERY good/great deal he comes across?Look, I’m going to be brutally honest here - based on the OPs ATTITUDE, any competent experienced broker will run the other way. The reason the OP finds all broker incompetent is because ONLY incompetent brokers will work with him!
Interestingly, I ALWAYS paid a broker who brought me a good deal his FULL commission rate. That’s why I get first choice on deals before the buyers who’ve negotiated a discount; the buyers who’ve run around” the broker’s back; and the buyers who refuse to sign a commission agreement.
- 2yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
@James McGovern why are you so upset with the agents YOU select?
We've posted numerous times that +95% of agents only know how to work with owner-occupied transactions which are mostly emotionally based transactions.
So, why are you even bothering contacting these agents?
Because they post, "I'm investor friendly"?They only know what they know and that is exactly what you are getting.
Why don't you try only working with agents that either own rentals themselves or can demonstrate they understand what an investor is looking for via actual closed sales?
BTW: an agent that actually knows how to work with investors can find "deals" on the MLS. It may take several weeks or months, but happens all the time.
Logical Property Management4.9462 Reviews - Real Estate Broker · Chicago, IL · Member since 2024 · 25 posts · 11 votes2y
Quote from @Adam Bartomeo:
There are 2 factors here, Retail Real Estate Sales and Wholesale Real Estate Sales. The real issue is that you don't understand the 2.
1. Retail - These agents don't normally have off market listings, most of them are boobs, and the industry just changed where it is going to be required to have a Buyer Broker agreement. You don't seem to understand this and may want to educate yourself on the ongoings in real estate.
2. Wholesale/Off market - These agents or wholesalers provide the best deals to proven investors first, the ones that they have built trust with have proven themselves. When you are building a relationship with them you have to build trust to get the scoop on the better deals.
Based on your short post it sounds like you are a little newer to RE and may want to seek out an experienced investor to work with for your first few deals. This will help you get educated and build relationships with the right people.
Love this prospective!
You are absolutely correct.
~ Signed a Licensed Broker aka Wholesaler
- Realtor · Dallas - Fort Worth Metroplex, TX · Member since 2016 · 1k+ posts · 925 votes2y
@James McGovern and now that the DOJ has gotten involved in our business that Rep agreement needs to be signed ( well it always should have, but now dates will be verified ) so yes if you want to work with a professional Realtor that little document is part of the process.
But listening to you , you are experienced - sounds like it would be best to stick with wholesalers and not worry about on market deals.
As always just my opinion and not written by Ai.
- Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 409 votes2yI have not found any good wholesalers and acquire properties via foreclosure auctions mostly.
But listening to you , you are experienced - sounds like it would be best to stick with wholesalers and not worry about on market deals.
As always just my opinion and not written by Ai.
- Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 409 votes2yIf you use me as your inspector, determine upfront whether you want me to be nitpicky and create the largest report of meaningless findings to aid in getting a price negotiated lower (often due for new bills), a minimum number of findings to make it easier to purchase (often the desire expressed from real estate agents who don't want to blow up the transaction) or somewhere in between these two extremes.
Quote from @Bruce Lynn:
@James McGovern I see you are a home inspector. If I contract a home and use you as my inspector, since I have never used you before and don't have a way to judge your work,
- Realtor · Dallas - Fort Worth Metroplex, TX · Member since 2016 · 1k+ posts · 925 votes2y
Quote from @James McGovern:
I have not found any good wholesalers and acquire properties via foreclosure auctions mostly.But listening to you , you are experienced - sounds like it would be best to stick with wholesalers and not worry about on market deals.
As always just my opinion and not written by Ai.
Understood on the wholesaler front, good ones are hard to come by. Glad you are acquiring via FCs.
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