How Do Investor Friendly Agents Function??

20 Replies

As investors we're taught that it's common for us to put in many offers to land one contract at a price that works for an investment deal.  Well, a realtor that I've worked with and have purchased with tells me that it takes like 2 hours for her to put a contract together.     So, unless (I guess) she feels confident about the offer, she'd rather not spend the time putting it together.

Is there like a short cut offer procedure that "investor friendly" realtors use to make this process faster or something?  I would think that maybe for investor clients that they would have a template saved for each investor with just a few fields to update for each offer.  How does that work?  I like this realtor and I would like to continue to work with her but I don't want her peaved at me every time I want to put in an offer.  Or, feel like I need to offer more than I want to so she'll do the offer.  Is there a procedure that I can pull her coat tail too?

As a Realtor who purchases homes for our company, I have contracts already set up with all the standard info so all I have to input is the address, offer price and thats it.  I already have a copy of the earnest money and proof of funds.  Thats all you need to submit the initial offer.  

What does take a little more time is all the other disclosures and docs for the contract but that comes once the offer has been accepted. 

Sounds like your Realtor is a little on the lazy side.

Thank you @Curt Davis  .  That's what I figured.  She's got two young kids and I think her lack of time is more for that reason.  Either way, as a buyer, I need to get offers in when they need to get in.  So, I guess I'll try to talk to her about setting up a template or some quick system for me or I'll have to try another realtor.

2 hours seems like a long time. Even when buying a HomePath or VA home it doesn't take that long.

Hi @Andraise Scott  

I am an investor and a Realtor so I can speak from both perspective. 

Investor POV: Let's put multiple offers out there and let's see what sticks. How difficult is it to put an offer on multiple properties. I have a Realtor and let's have him/her put offers on different properties. I just want to get properties under contract so I can vet them through during the due diligence phase.

Realtor POV: I am working for free. I will only get paid when you (Investor) actually close on the property. My time is money. Now when Mr./Ms. Investor you ask me to put an offer on the property I don't know if I will be paid. I will have to log in to MLS navigate to the form get the relevant details on the property i.e. legal description which I have to look up in county clerk records and search for all the relevant information make sure I check and cross check that all information is accurate. Get the documents ready send it to you to sign..if I messed something I will have to update and re-send Mr./Ms.Investor the documents and then communicate the offer to the sellers agent and follow up etc. Obviously there is a template. However, things like legal description etc have to be searched special stipulations have to be entered price needs to be checked and a lot of follow up needs to happen in the background.

Investor POV: Property gets under contract..all is good. I realize that this is not a deal cuz as an investor I am wanting to pick a property for 15-20% below market value. So Investor does not go with the said deal.

Realtor POV: All this work for what! This Investor is wasting my time. He/She is not serious. I am gonna look for a Seller cuz I know that I will get paid in that deal.

Is there a procedure?

Well you have to create a team. The team includes real estate agents who are specialist in your farming area. You need to specify your exact criteria and give some serious thought to what you want and show that you have necessary pre-approvals and funds to close and are confident that if a deal comes by you will close on it. You could work with different real estate agents in different farming areas. You should also educate yourself in analyzing properties. The more properties you analyze the better you will get at picking good from bad. You then ask your real estate team to put offers on properties that you are confident will make you money/your criteria..don't simply place offers for placing offers. If you can't find anyone then get your own license and write contracts as you want. **There are disclosures that you would need to make if you go down the path of getting your own license. 

At the end of the day as an investor look for win win situation. Provide incentives to the realtor as referrals or repeat business and educate yourself as an investor so you are only putting offers on properties that meet your criteria and be respectful of the agent times. You will have a higher chance succeeding. 

Hope that answers your questions.

It should not take her 2 hrs to fill out a contract. Personally I don't like the idea of putting in 20 low ball offers with the intention of only purchasing one. I understand this is a strategy & it works in some cases but eventually you'll develop a bad reputation with listing agents. 

Obviously I don't know what kind of working relationship you have with this agent but maybe she's looking at it the same way I am. 

I consider myself a very investor friendly realtor, but if an investor came to me and told me to write up 20 different lowball offers with the intention of only purchasing one, I would politely decline. 

I only work with investors but only the investors who are making strong and logical offers with a high likelihood of being accepted. I don't shotgun offers all around town. Ineffective use of my time & I will not jeopardize my reputation with the other listing agents.

I have clients that we occasionally toss out some pretty low offers on houses that we do not feel are the greatest deals. A see if it sticks type thing but these are serious repeat buyers of mine who know that they must be aggressive when I present a good deal to them.

Investors forget that an agent needs to keep up their reputation around town. You want to be known as the guy who's got the buyers, not the guy who's tossing around lame duck offers.

All that said 2 hours seems long. You can also do verbal offers.

@Azeez K.  Very good and helpful info.  And, @Stanley Okazaki  I totally understand your point and would probably feel the same if I were a realtor.  Going forward, this is all very helpful.  Just for clarity on this case.  This is only the second property that she's put in a contract for me on.  The first was for a primary home that I did purchase.  The second is a potential rehab offer which she and my contractor both love and think it's a great deal.  The initial offer was written up and submitted so we're in the middle of that one.   Meanwhile, I ran another property by her that popped up for discussion which we did.  After which I think I said we could just put in a low ball offer and see if they accept or counter.  That's kinda when I got the 2 hour lecture.

I get not burning somebody out with a bunch of "see what sticks" offers.  I wouldn't want to be on the other end of that either.  I've just read it a number of times in my RE learning that I'm trying to figure out how others are doing that and not ticking off their realtors.  The investors using those tactics are probably realtors themselves.  Right?

@James Wise  Have my realtor express a verbal offer?  Or, I can express a verbal offer to the seller/selling agent and if we're close then have my realtor write it up?

Originally posted by @Andraise Scott :

@James Wise Have my realtor express a verbal offer?  Or, I can express a verbal offer to the seller/selling agent and if we're close then have my realtor write it up?

 Have your Realtor express the verbal offer to the listing agent.

I work for a top-producing husband/wife team who are also (buy & hold) investors.  We pretty much don't get excited about or encourage working with investors.  Like others have probably mentioned, it just is not worth our time.  We do have two that we work with, and I think we picked those up during a very slow period.  Both of these investors are cash buyers who make quick decisions, have bought several properties through us, and don't waste our time or theirs.  And remember, it basically takes the same amount of hours to close a 30k deal as it does a 400k deal - so you can guess who Realtor will prioritize.

Yes I would bet that those making 40 offers before getting 1 house or either licensed or work with a realtor who specializes in investors.  Also, many bank-owned properties are open to all for bidding online.

As @James Wise mentioned, I would see if you realtor can get a verbal agreement and save time. The realtor I work with almost always will call or send a note stating that that "my client is interested at "X" amount and can close in "X" amount of time. If this is something the seller will be interested in I can write up the offer and send it over"

To me I like this approach just because we are able to fire off multiple offers in no time at all and at least see if it gauges any interest. I know seeing something on paper may be a bit more appealing but why waste the time with the same end result.

I like 

@Ryan Robbins  answer, it comes down to the relationship you have with the agent.

Originally posted by @Andraise Scott :

@James Wise  Have my realtor express a verbal offer?  Or, I can express a verbal offer to the seller/selling agent and if we're close then have my realtor write it up?

Depending on how active you will be, this might be one (of many) reason(s) to get your license. 

Originally posted by @Jennifer B. :

I work for a top-producing husband/wife team who are also (buy & hold) investors.  We pretty much don't get excited about or encourage working with investors.  Like others have probably mentioned, it just is not worth our time.  We do have two that we work with, and I think we picked those up during a very slow period.  Both of these investors are cash buyers who make quick decisions, have bought several properties through us, and don't waste our time or theirs.  And remember, it basically takes the same amount of hours to close a 30k deal as it does a 400k deal - so you can guess who Realtor will prioritize.

 Thank you Jennifer.  That is totally understandable.

@Morry Eghbal  , I would agree as well.  I like @Ryan Robbins  verbal offers idea a lot and will try this approach with my realtor and see how she feels about it.  @Jonathan Makovsky  , I have thought about getting my license.  I'm just not sure if that's the move for me at this point.  But, I'm still considering it.  It does bring a lot of benefits.  Thank you all for your input!

@Andraise Scott  well in your case the agent you're working with probably doesn't quite understand the investor side of things. The thing about working with investors is that, unless they have a reputation behind them there's no way to really know if they're serious buyers. 

And yeah, for the most part these investors that toss out multiple low ball offers are either agents themselves or have an agents in house.

@Andraise Scott @Curt Davis @Michael Noto

This is an older thread, but I wanted to chime in.  The Op is located in Maryland, and while many of you think it may be ridiculous for an offer to take a couple hours to put together, that is often the case in Maryland (as well as DC and Northern Virginia). The reason for that is your average contract in Maryland is somewhere around 50 pages, and depending on what addendum you add can easily push 100 pages.

The people who want to throw 20, 30, 50 offers out and see what sticks will typically in our area just become agents themselves due to the absurd lengths of our contract....and to top that off, that strategy is frowned upon in many areas in the DC metro area (Montgomery County, DC, PG, Fairfax County, Arlington County).  Also it is impossible actually see all those properties, and if you are someone making offers sight unseen, that is also a practice that is frowned upon in the DC area.  If you are an investor or an agent who is doing this, there is a good chance that your name will get around and people will not take your offers seriously and the listing agents will relay that information to the buyer. You will essentially end up getting yourself blackballed. If you are an agent making offers site unseen, there is a good chance you will have complaints filed against you with the real estate commission. Also key to this is people will say that they are doing nothing wrong....but that does not matter...if you have to spend time and money defending yourself to the real estate commission you have already 'lost'.

Much of operating in the real estate business is understanding what is usual and customary...and there are parts of Maryland (Baltimore City, Hagerstown) where those strategies are acceptable, but most of the DC metro area it is not.  

I am both and Investor and a Realtor. I prefer to work with Investors both experienced and newbies. I do work in Hagerstown and surrounding areas of MD (Cumberland and Frederick) and there are a large amount of cash deals that take place on the MLS, which suggests there are a lot of investor activity. In my experience the only properties that will sell at 70% of list price are properties that have been listed well beyond the average days on market and/or were not listed at the correct market price to start. The more successful REO listing agents know just where to list the property to elicit the highest and best offer.

In most cases verbal offers or letters of intent will get ignored. I tried this in the beginning and I would usually get a response that stated... " I will present all written offers to my client". Basically the listing agent is saying if you are really that serious with that offer then put your name on a full contract offer with EMD and proof of funds then I will reject it. I put myself in the shoes of the sellers and think how they would feel getting and offer at 70% of list price. The person making the offer would be hard pressed to get a counter and more likely a response several days later stating they rejected your offer.

Its important to help your clients understand the overall market and set expectations. You don't do anyone any service by throwing multiple lowball offers around all day long. If a property is listed, the Seller has representation with a agent who in most cases can inform the seller about the local market and set expectations of when and at what price a property will sell. Following a strategy of making multiple low offers will give you and your Realtor a bad name. 

Best strategy to follow in order to achieve the goal of finding below market proprieties would be a investor marketing campaign.

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.