I'm in the Maryland area having trouble finding a buyer's agent. Everything goes smoothly right up until exactly the point when I inform them that I'm interested in under $30k properties, then I can't get a call or email answered or returned. I understand the commission numbers, but if I'm trying to develop a long term professional relationship, why is it challenge to find a good agent that I will possibly be doing 5 - 10 deals a year for me?
Which area of Maryland are you looking in ?
5-10 deals a year? So, you're looking to find an agent to help you with investment properties? Tell them up front you're looking to invest, but they're lower priced homes. Though, not surprising they won't call you back when you mention the price. Usually they're losing money at that low of a price point.
And, if you can't get them to call you back then find a brand-spankin' new agent. They'll work any price range!
One way is to find an agent who already sales homes in that price range. The art is how to talk to them so it seems like your not a new investor who doesn't know what they are doing, nor will waste their time (the most important step). I have a few videos on this subject that has more step by step info that's a bit too much to type here. Thanks, and try to join the mastermind group when you can. Good luck!
I can assist with properties in anne arundel county. I live in Odenton and I invest all over the Baltimore metro area. I have represented buyers in investment Property transactions.
I think it would be easier for you to get your own real estate license. If others don't want to work with you, it would be easier to be an agent yourself.
some people don't want the hassle for a 1000 dollar commission that will then be chopped up again with their broker....some do.
if youre doing 5-10, spend a few hundred and become an agent yourself. link up with a high commission split broker that will leave you alone (investor friendly) . now you have direct access to listings, scheduling showings, and making/responding to offers.
As a Broker and investor for many years I understand your problem. Agents (not all of them) are more interested in the potential commission they can make rather than building a relationship with an you as an investor!
You are better off dealing and negotiating with new agents (they have not been indoctrinated by office politics or false assumptions by the office veterans also known as office BIG SHOTS big hat and no cattle).
NOTE: When i got my real estate license, it was not that I wanted to show houses to potential buyers, it was because I wanted to learn how to invest. (that training was not available to me, probably because the agency didn't have a clue to how to invest, how to make money or creative financing terms)
An idea that may have merit.......
- Interview agents. preferable a new agents.
- Let the agent know what your objective are (to buy, to control, to flip to build your portfolio)
- Be honest, let the agent know you are serious and that you have the cash or technique to control real estate
- Sign a buyer broker agreement with the agency
- It is important to let them know that you will pay them a fee on unlisted properties that you buy.
- You need to lay out a plan that will help you and them to put together profitable transactions
- Offer to not only pay a commission but you will list with them when you are ready to sell and (this is important) that you will give them a percent of your net profits
- Be generous with your agent, offer a gas credit card, cash for giving you expired listing, buy lunch and give them cash from time to time. DON'T BE CHEAP! Do these things and the newly licensed agent will be loyal to you and you will make a ton of money.
totally agree with Charles. Normally seasoned agents will shy away knowing that you are looking in that price range. Younger/newer agents looking to get deals under their belt will be your bread and butter here.
@Frank Closer New agent here that also invests in that price range. PM me if you would like to link up.
You can find an agent, but you are going to have to come out of pocket to pay them. 10 deals a year at that price would pay me less than half what I make on a typical deal. Why would an agent want to put in the work to do 10 deals to make 5 or 6k when one deal is going to pay them $10k. If you really want to do 10 deals at that price range, you either need to pay an agent a flat fee per deal out of pocket or just get your agents license.
Originally posted by @Frank Closer :
@Chris Seveney Severn/Odenton MD
@David Hunter how is 3% of $30,000, losing them money. Do you mean losing money indirectly by taking time away from them doing larger deals? Im just trying to understand the agents psychology
I would be losing money at this price point. 3% is the high end of the commission scale. Many properties are at 2.5%. That is then split with the brokerage. Then business overhead comes out of that before salary. I wouldn't make enough per deal at this price to even cover my time in showing the property, writing offer and following the property to closing....I would be losing money at this price point....and to do 10 of them....I might as well just write someone a check for $20k instead of doing those 10 deals.
a question I have is why would you need a buyers agent for sub 30k properties. You know they are not in A (or B or most likely C) neighborhoods and agents cannot discriminate / comment on the area. What purpose will they serve you ? You can have the listing agent show you and write up the offer/ while they are not representing you what will you I agree with @Russell Brazil - an agent will lose money on those types of deals.
For all disclosure I halve bought a sub30k property and used "buyers agent" but it was local agent who showed me that 1 property and wrote up the offer, I was not using her exclusively as a buyers agent but who responded to my Zillow request and I flat out asked if she was ok showing it because I knew her commission would almost be zero.
You are trying to develop a relationship. They are trying to make money.
Russell is right. It is not enough profit for them to want a relationship with you.
From my experience it takes just as much time and effort to put together a $30k deal as a $300k deal. If you were an agent, which would you rather deal with?
Also, while having goals is awesome and I take you at your word that you will buy 5 properties in a year, do you know how many people contact agents telling them that?
Frank, it's both.
3% of $30,000 is $900. Say the agent has to split it 50% with the broker. Now the agent is only getting $450. Now, depending on the brokerage, the agent may have to pay EO insurance, tech fees, etc. They pretty much walk away with a couple hundred dollars if they're lucky.
Now, the agent is using up valuable time they could be spending on getting a $300,000 purchase, preferably a listing (because you said 5-10 deals a year). A $300,000 purchase is just as much work as a $30,000 purchase. So, if an agent wants to work with you, they'll have to work 10 times harder to get the same amount of money (and, yes, you could say the higher the price the lower the commission structure, but at this price point it wouldn't matter as much).
So, it doesn't make any financial sense for someone to work on a $30,000 deal.
Your best bet is to find someone new who is learning the business, because new agents will take what they can get, or get your own real estate license and then you'll never have to worry about it again.
Taking the RE licensing class is cheap (few hundred) however actually having an active license allowing you to do business in the MD/DC/VA area is NOT cheap. You have to be affiliated with at least 1 board of realtors $700/yr, have a sentricard and pay dues in order to access electronic lock-boxes $215/yr, MLS access $660/yr, if you go with a 100% commission brokerage expect to pay approx $3600/yr, continuing education courses/licensing and renewal fees approx $150/yr, showing service membership $1,000/yr, add in the cost of E & O insurance and a few more memberships, broker dues and other misc. things and you're well over $7,000 per year. These are just the realistic bare minimum annual expenses you can expect to incur. No website, advertising, etc. If you're more interested in being an investor and your own deals and not really interested in being an agent servicing clients in my opinion get with an experienced agent that understands what you want and can help you grow your business. Consider also that when you're a RE license holder it can sometimes work against you as an investor because you will have to disclose you are a license holder, or that you have an ownership interest in the LLC or entity involved in the transaction. Sometimes this can make people feel you have the upper hand and are somehow taking advantage of them, especially if you're negotiating directly with the buyer or seller.