Buyers Agents Have Worked Well

12 Replies

Correction: Buyers Agents Have Not Worked Well

I'm an investor in Southern Minnesota. When I first started here, I wanted a buyers agent, and found one who was an investor and also a property manager. She helped me find a community banker whom I use today. But I found quickly she would never respond to emails and phone calls. Opportunities would slip by because she was so busy running her side business, she couldn't get me into properties.

I then continued without a buyers agent, and found a property my wife and I liked, and contacted the sellers agent, and voila, the service was great, and I knew full well the agent was all on the seller's side..but I got the property.

We liked the selling agent, so we retained him, and found opportunity after opportunity was followed slowly. He was good at showings, but slow at strategy. Other investors kept beating us to bids, and I was going days between asking for purchase orders and following up with phone calls. I finally got him to get a PA in today, but it is the last straw.

My experience leads me to think...much better off with out Purchasing agent. It adds an unneccesary level of hoops to jump thourgh. With a sellers agent, you have one communication, not an email, and then another email or voice mail in between. Your thoughts?

The brokers/ agents should be honest with you. Many take on clients and see what sticks to make money.

A broker/agent in demand only has so much time in a day.

For me on the commercial side I have to allocate time to only serious buyers and sellers.

I think the issue might be in the beginning outline in writing what you expect.

For instance I am a buyer looking for 3 bed 2 bath buy and holds with a 2 car garage for 900 in rent for 80,000 purchase price. I am looking to buy 1 a month and I am qualified with a loan person and here is my banks statement.

The broker/agent if they are any good on the residential side will see 12 deals a year at 80k is 960k at 3% commission equals a 28,800 book of business annually for that client. Next the broker/agent needs to define the time it will take to accomplish the goal to see ROI. Especially if an investor is buying a flip where they will make 30,000 they can't expect a broker/agent to have the same enthusiasm to make 2,000 to 3,000 commission for the same work and effort.

I will give you an example. Years and years ago I would work on the vacant apartment buildings. A 30 unit was a gut job and I spent 4 months negotiating that short sale, water lien, waiver of deficiency to make a paltry 6,000 because the sales price was 3k and change a door.

Every deal I work on now makes me 5 to 6 figures in commission. I don't waste time on low income and high work properties as it reduces my ROI.

Hope it helps.

His working is good and showing the good performance in the competition.

Originally posted by @Joel Owens :
The brokers/ agents should be honest with you. Many take on clients and see what sticks to make money.

A broker/agent in demand only has so much time in a day.

For me on the commercial side I have to allocate time to only serious buyers and sellers.

I think the issue might be in the beginning outline in writing what you expect.

For instance I am a buyer looking for 3 bed 2 bath buy and holds with a 2 car garage for 900 in rent for 80,000 purchase price. I am looking to buy 1 a month and I am qualified with a loan person and here is my banks statement.

The broker/agent if they are any good on the residential side will see 12 deals a year at 80k is 960k at 3% commission equals a 28,800 book of business annually for that client. Next the broker/agent needs to define the time it will take to accomplish the goal to see ROI. Especially if an investor is buying a flip where they will make 30,000 they can't expect a broker/agent to have the same enthusiasm to make 2,000 to 3,000 commission for the same work and effort.

I will give you an example. Years and years ago I would work on the vacant apartment buildings. A 30 unit was a gut job and I spent 4 months negotiating that short sale, water lien, waiver of deficiency to make a paltry 6,000 because the sales price was 3k and change a door.

Every deal I work on now makes me 5 to 6 figures in commission. I don't waste time on low income and high work properties as it reduces my ROI.

Hope it helps.

It helps a lot. Don't you think the listing agent has more to gain from me making offers direct through them? A 6% commission must sound better than a 3% commission. It seems that in my case, sellers agents work harder to get your deal in. Sure, you don't build up relationships as good, but if my negotiations are fair, my checks and closings go smooth, won't my LLC still get a good reputation with realtors? Your idea of writing out expectations are good. We expect to close on a property once every 3-4 months.

It depends on what it is. In commercial listing brokers like dealing with me because I qualify my buyers and everything goes smooth once under contract. It makes the listing brokers look good to their sellers. If you are random buyer calling up they have no clue who you are and your capability.

So making the 6% is nice but it depends on the conditions attached to it.

With 3 to 4 a year time is on your side. If you were having to do 1 to 2 a month you would be under more pressure.

@David Moore I was in similar boat before and then decided to get my own license. Totally worth it. You can see any house whenever you like yourself and save the commission. And it is very easy to pass the realtor exams.

Originally posted by @Wendy BK :
@David Moore I was in similar boat before and then decided to get my own license. Totally worth it. You can see any house whenever you like yourself and save the commission. And it is very easy to pass the realtor exams.

Thanks, Wendy. As a realtor, then, I can just buy for my LLC? Do they teach you that stuff in the classes?

You can buy for individual, LLC, etc, any entity that can be in a PA. Class is for passing exams, and real experiences gain from practice. But you probabally know a lot already from your past purchase. And you can always get more training if needed once you are under a broker. I would recommend online course, which is flexible and takes much less time.

90% of the time i call directly the SA. if not more. best way to get the house

the only time i dont is when it's a HUD home and can't get a hold of anyone at the SA office.

my realtor lists the rentals though. she knows about this strategy and she is fine with that.

David,

Your postings are very helpful, as I am considering purchasing a property here in MN.  I have an RE license in another state.   What purchase contract form do you use ; I.e., where can I download an official state-approved contract to buy and sell?   I want to avoid enlisting a buyer's agent.

Thanks!

Jeanne

I am an investor and an agent.  I'll tell you this, if you want to save yourself the money and the aggravation of dealing with someone else get your license.  However, an agent who knows the investor market in a specific area is invaluable.  Even though I have my license, I still use my agent in New Haven.  He was born and raised there has been helping first time buyers get homes by buying multi families and owns multiple rental properties himself.  More important than anything, he is young, hungry, and knowledgeable.  He is on the same wave length as me and has very similar goals.  So all that being said, when an amazing deal comes on the table, I'm his first call.  I'll send him places I think are good prices but usually he knows about it already and why it won't be worth the time. 

So if I was you, I'd still get my license but also continue to network with agents.  If you find that young guy or girl who is very motivated and looking long term then work with them.  You can always work out a deal with them for your purchases if you have a license. 

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