I'm new to investing, but not new to real estate; I'm well aware that the agent really is there for the seller, not the buyer - and as a newbie investor I seem to be having a difficult time finding a realtor who is investor "friendly" - who won't leak your info or strategy to the seller and therefore blow the deal (which just happened); or who won't try to stick you with commissions they did not earn. A realtor tried to get me to sign a commission agreement guaranteeing he would receive a minimum of $3000 per transaction, whether he sold the property, or I sold it; or whether it was sold by other means - i.e, even if the commission turned out to be less than $3000. He wanted me to make up the difference! Are there any investment friendly realtors in the Philadelphia, PA area? I started reading the Handbook for Realtors - I wonder what it would take to get them to read it? Hmmm... Any advice you can give would be greatly appreciated.
You see a lot of people want realtors to do all of this work and don't want to pay. We work for commissions, not to mention we have our own investments going on. And investors wants you to put these super low ball offers in, pull a million comps, and etc... and don't have anything to offer for your time. If you're specific about what you want, and are actually pulling the trigger on properties then you shouldn't be a problem finding a realtor willing to work with you.
Find a local real estate investors group in your area and get some personal referrals from active investors. Most "investors" are really wanna-be's and with cost of gas & time/energy that goes into them, a good chunk of agents avoid them or just put them on an email marketing campaign. How much are you looking to invest and how much do you have in cash? Be prepared to show that to an agent so they know you are serious and not a wanna-be. Once you have a track record, it's very easy to attract all kinds of agents. I use several for different purposes. Happy Investing.
@Gloria Dulan-Wilson It sounds like you're talking about two different scenarios on the buy and list side. Is that right?
On the buy side, are you just calling the listing agent on a property and doing this? If you haven't yet, you should find an agent to represent you as a buyer. Then you should sit down with them and talk about what you expect from each other-if there is a match move forward.
On the listing side, most agents use "exclusive listing agreements" but some will waive commission if you find a buyer. I wouldn't because I have marketing expense, time involved etc.
My opinion is find a good agent and let them earn their money. A good one will be worth whatever commission they charge. It really should be a partnership.
@Andy Luick: thanks you Andy for that insight - I'm definitely a wannabe, gonnabe investor -that said, my primary concern is the agent trying to lock me into a blanket commission before we even get started, and before he's shown me any inventory. $3000 per deal guaranteed - really.
@Jeff Valentino - I agree it should be a partnership between myself and the realtor - I've done it in the past - but I wasn't an investor then. The agent who was referred to me to represent me as a buyer is already asking for $3000 guarantee - in the first instance, by the way, I found the property myself, but brought the realtor into the picture to make sure I had all the paperwork correct - big mistake.
Thank you both for your response. I do understand realtors not wanting to be spinning their wheels. Perhaps when I'm fully up, running and successful like you guys, I can afford to promise that kind of commission - but definitely not today.
Hi @Gloria Dulan-Wilson , thanks for this post. I agree with Ralph. I am not sure all new investors fully understand that an agent is never compensated for the time unless a deal actually happens. Treat them with respect for their time, come pre-approved, and many will be happy to journey forward with you!
I understand both sides, but I think it boils down to being a real estate agent does not require many requirements so some will great sales people and others will be not so great.
Also in places like Philadelphia on the lower end sometimes the properties are selling for so cheap that many agents do not want to waste time with such small commissions.
As @Greg Wake said, I understand both sides. I agree with his and others' posts on this topic as well.
The one piece that I'll add for your consideration...If an agent doesn't have you sign a listing contract with them, there would be nothing to stop a buyer from finding your property through the agent's marketing and then going to directly to you as the owner.
For instance, being a Realtor, I could comb through properties listed on the MLS, check public records for the owner, contact the owner directly, represent myself sans commission/fee, and purchase a property directly from a seller, thereby saving the seller (you) the commission to the agent who ultimately found me (the buyer).
Also, as Greg pointed out, some properties are sold at a price point where a % based fee wouldn't net the agent enough money to spend their time on the property. Good agents can pick and choose the listings and the buyers they represent; many choose to ONLY represent buyers OR sellers.
Don't forget, "you get what you pay for".
Can you explain what you mean by "the agent really is there for the seller, not the buyer" and "leak your info or strategy to the seller and therefore blow the deal"?
It sounds like you may have been talking to the listing agent, who really IS there for the seller. In that case, the seller is his client, and you are just a customer.
You need buyer representation, and like someone above stated, I assume the $3k minimum was because the properties you guys are looking at are on the lower end and may not be worth it to the agent.
Join the Largest Real Estate Investing Community
Basic membership is free, forever.