Why does it seem so hard for a realtor to submit low ball offers?
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Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
10yBecause they realize you are basically a waste of time, and when and if you do actually get one after so many offers/showings, they'll be making about $2.00/hr. And with the attitude "you should do what I want, and not talk back to me"......I wouldn't talk back to you much, just enough to say "see ya', have a nice life".
73 Replies
- Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes10y
Because they realize you are basically a waste of time, and when and if you do actually get one after so many offers/showings, they'll be making about $2.00/hr. And with the attitude "you should do what I want, and not talk back to me"......I wouldn't talk back to you much, just enough to say "see ya', have a nice life".
- Contractor · Charlotte, NC · Member since 2016 · 138 posts · 63 votes10y
If you insist on making offers on the MLS, I would say go to a local REIA and meet with investor-friendly realtors. I have two I've discussed this very thing with and they don't mind making low ball offers on my behalf.
Alternatively, once you get the list, you could always just write the home owners a letter and say you're a cash buyer interested in the property. Work directly with you and don't pay realtor commissions. If you got a deal this way, I'd still send a kickback to whoever produced the list for you since you're going around them.
My suggestion would be to not look on the MLS for distressed properties. If someone is listing their home with a realtor, they most likely aren't *that* motivated to take a deeply discounted offer. If you do use the MLS, get a listing of aged properties that have >250 DOM. You might find some motivated sellers there.
Best of luck.
- Boynton Beach, FL · Member since 2016 · 125 posts · 29 votes10y
@Cam Jimmy -- learn how to write your own offers and/or get your real estate license.
- Investor · La Grande, OR · Member since 2014 · 194 posts · 176 votes10y
I agree with @Account Closed. Remember that agents only get paid when they actually sell something. As a Principal Broker I have people call me every day to look at cheap properties which they never write an offer on, or write a ridiculously low offer on that I know will not get accepted. How do I know they won't get accepted? Easy. Because the bank that has the foreclosure listing has the home on a price drop schedule, meaning that every so often, the price of the home will automatically drop until an offer comes in at the new acceptable price. This is the banks way of not having to negotiate on hundreds if not thousands of offers that come in daily. Either it meets, or is very close to the listed price, or they wait until they get one that is.
Also remember that if it is listed on the MLS, even if it is distressed you won't be buying it for 80% of value. You will be buying it at value, because the current market said the home should sell for what you bought it for, aka, value. On occasion you can get a great deal through the MLS, but that will typically be with a home that is listed at below current market rates, and will be bought immediately.
The most important thing to remember is that banks don't think emotionally. They have systematized the foreclosure selling process due to the large inventory they have to manage. Either your offer meets their acceptable criteria, or it does not, and your local Realtor will know what banks in the area will and won't accept. They are professionals in their field; don't get me wrong, I work with a lot of dummies, but if they won't an offer, that means they know they won't get paid, which should be a good sign to you that your offer will most likely not get accepted.
Get your license so you can represent yourself and also collect a chunk of the commission when you buy.
- Investor · Anchorage, AK · Member since 2016 · 222 posts · 294 votes10y
@Wayne Brooks how do YOU go about trying to get good deals on properties (%70-%90% off)? I was just trying to get advice, and I seem to have offended you. That was not my intention.
@Account Closed Thanks for your input!
- Investor · Anchorage, AK · Member since 2016 · 222 posts · 294 votes10y
@Mike Sattem Thanks for the response! I have a quick question for you. IF I was to get my own license, does a broker have to "carry" my license in order for me to buy and sell my own properties? I'm pretty sure that a broker must "carry" my license if I wanted to buy and sell properties for other people though. Please correct me if I am wrong. Thank you!
- Investor · La Grande, OR · Member since 2014 · 194 posts · 176 votes10y
In Oregon we have brokers (called agents in some states), which is the initial level of licensing. You will need a head Principal Broker (just called a broker in states which use the term agents) to assign your license to. I got into investing, and almost immediately thereafter got my brokers license, and then after 3 years my principal brokers license so I could open my own brokerage if I wanted. My original Principle Broker knew that I was an investor and worked out a friendly commission split for me, even allowing me to purchase one property per year and have no split whatsoever so that I would apply this commission towards the purchase.
I buy about half of my deals through the MLS, but they are almost exclusively done the day the deal comes available, because the initial listing price of the home was below market for different reasons. Once a home sits on the MLS the possibility of getting a great deal diminishes pretty quickly. I am a much bigger fan of direct mailings that have by far netted me better deals, because I can work directly with the seller on establishing value, instead of letting the market decide.
- 10yAlexander FelicePro MemberGuy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
if you're making unreasonable offers, no one will mess with you.
if you're making reasonable offers, find a better realtor.
- Boynton Beach, FL · Member since 2016 · 125 posts · 29 votes10y
@Cam Jimmy -- yes, you typically have to hang an associate's license with a broker. But there are a number of "discount brokers" out there, if you will, that charge a minimal monthly fee and/or low transaction fee. You would also have to pay for your own MLS access through a local board. So I guess this strategy depends on how many deals you're looking to do and if it will pay off in the long run.
- Investor · Vancouver, WA · Member since 2014 · 359 posts · 143 votes10y
An agent doesn't get paid unless you buy something so if you put in 50 offers and only get 1 then they don't get paid much for how much time they put in.
There are ways to make it better for them such as making offers site unseen (call the listing agent and ask how much rehab there is) and always keep the same terms. This way the agent does not have to waste time showing you a place where an offer wont work and can use the same paperwork and just change a few lines for each offer.
Go to some RE meetings and fine some wholesalers or market for properties yourself.
- Investor · Cincinnati, OH · Member since 2012 · 506 posts · 331 votes10y
Agents (smart ones, anyway) are small business owners and have a limited number of hours in a day to generate revenue. You're asking the agent to do work with a low probability of paying off instead of doing other work (even if it's just prospecting). It's not that lowball offers never get accepted. It's that they get accepted very rarely and only pay off for you, not the agent.
If your agent is like most, it probably takes 5-10 minutes to generate the offer package to submit. Doesn't sound like much time (and it isn't), but with low odds of acceptance, they'll have hours and hours into this project to pay off. I developed my own system that lets me generate a full offer package in under 10 seconds and I'm a full time wholesaler, so I have different pain points than a traditional agent, but this is very likely what the 3 agents are thinking. Heck, I don't think you would be interested in doing a bunch of work if you thought you weren't going to get paid for it. - Real Estate Broker · Raleigh, NC · Member since 2014 · 2k+ posts · 1k+ votes10y
@Cam Jimmy I don't know your market, so maybe what you want to do is reasonable where you are, but my market is very much a seller's market, so low offers just simply don't get accepted. There may be an off chance that a low ball offer here or there works out, but no single agent has the time to show 20 properties at 20 different times, write up 20 offers, just to get a single 50k home under contract (if you are lucky).
It makes much better business sense to work with either retail buyers or investors who are willing to pay what the market demands. If you want a great deal, you should do some direct marketing yourself. Anything in MLS goes for market because everyone has seen the property. However, if you are talking directly to a seller, and you're practically the only one, you have a much better chance of getting a home at below market rates.
- Redding, CA · Member since 2016 · 224 posts · 143 votes10y
Cam
I am not an agent or broker
Agents can help you, but the vision must be yours. I like to think of real estate sales people as a large task force capable of accomplishing anything. But it’s up to me to tell them exactly what tasks need to be done in order for me to accomplish my financial goals I also tell them I can buy a property quickly, almost overnight! To an agent, that means fast paydays. They all like that! Still, I let them know a property must fit my financial guidelines.
Obviously ‘run of the mill properties, won’t do! Proper qualifications are needed to determine if it’s a candidate. My first agent, Merv, brought me my Hillcrest property which turned out to be a gold mine. It took me nearly four years to train Fred (my second agent) how to gather the kind of information I need for my line of work. My line of work, of course, is real estate investing for profit. That’s a lot different than merely investing in real estate. That’s what many naive investors do, and unfortunately they acquire properties all right, but what they’re missing is profits. Let me say this before I move on. Fred is an excellent real estate agent. He has many outstanding achievements to his credit. But the simple truth is, I need Fred to be snoopy and a house detective much like me.
Agents in my town know I’m a fix-up specialist, most have all seen my properties. I get many telephone calls from agents trying to sell me their own personnel listings. These agents would rather sell directly to me, hoping to avoid commission splits with another real estate office. Its my policy to always refer these callers to Fred. He will represent me and therefore be entitled to 50 percent of all commissions, normally three or four percent of the selling price. I call this running my agent through the multiple! By putting Fred in the deal I’ve effectively set him up to get a bonus payday that otherwise would not have happened. This is what I mean by taking care of your agents.
Good luck.
Fixer Jay DeCima
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes10y
Are you willing to pay your agent out of pocket? Because you are in essence asking someone to work for free if you are not willing to pay them. I only write realistic offers on properties. Sometimes a realistic offer might be 50% of list price...sometimes that might be 200% of list price. If a client wanted me to write 30 unrealistic offers, I would do it unless they paid me.
District Invest Group545 Reviews - Wilmington, DE · Member since 2016 · 116 posts · 59 votes10y
@Cam Jimmy ... Like I've mentioned in most of the posts I throw up here on the forums, I am new. So my view point is quite different from a lot of other people on here. But, we are all big boys, all adults, so it's a good place to speak your mind.
Depending on how "unrealistic" or "low-ball" your offers are, I don't think/agree that you should be running in to so many problems. I've worked with 3 realtors over the past 2 years, ranging from mid/late 20s up to 50s in age. There is a HUGE difference in personalities. The most recent realtor I have been working with is an ab.so.lute. boss. He is incredibly aggressive, hungry, and wants to get paid. His view is even if he gets me a property on a low ball offer, he is going to make money. He knows me now, and knows I am going to buy a place, eventually once I find the right place.
Now low-ball/unrealistic might be a subjective term... but he has encouraged me and pushed me to submit low offers to see how the sellers react and want to play ball. IE: the first property we bought with him was listed for 65k.. He tells me "lets low ball em, see whats up." So i responded with, like what? 50k? "Oh no... like $30k, hows that sound?" I was shocked... low and behold, purchased for $45k in 20 hours.
Idk... just an example from my experience as a newbie
- Real Estate Agent · Gilbert, AZ · Member since 2016 · 220 posts · 122 votes10y
I often will send an email offer like this:
"Would your seller consider:
$90,000 Purchase Price
$5,000 Earnest Deposit
$20,000 Down payment
$65,000 new conventional loan
COE 7/29/2016"
Takes less time and when they say yes I write up a full offer.
- 10yChristina CareyPro MemberReal Estate Broker · Dayton, OH · Member since 2010 · 245 posts · 186 votes
Many good points above already - especially @Russell Brazil re: low offers vs. realistic offers. If you're making an offer significantly below asking price on a property that just hit the market - especially an REO - that's not realistic, and you really are wasting your time, for reasons already covered by @Mike Sattem. Some banks are more religious about their price drop schedules than others, but I can assure you none of them are taking offers at 80% of whatever they believe is market value at that point in time.
Assuming you are in a seller's market, your chances of having a below market offer accepted on a listed property might be somewhere between 1 in 50 and 1 in 100. Yes all-cash and no contingencies does have its appeal, but that will only get you so far. (You are making offers below market without contingencies, yes?) Think about it this way: if you put a house up for sale, presumably at market price, and someone offered you 80% in the first week, would you take it?
Yes, people (and banks) put properties up for sale at too-high prices all the time, and many agents are just dumb, and they aren't doing anyone any favors, including themselves, by taking an overpriced listing ... but that's a topic for another day.
As @Brian Compton said, look for the ones that have been on the market awhile - say 6 months or longer, where the seller may be getting a bit more motivated (or realistic about what their house is actually worth). As others have already said, you can get your license and then systematize making offers in volume like @Sean Cole has done. Even a broken clock is right twice a day ... eventually you will get an offer accepted if you submit enough of them (listed or otherwise), as I'm sure that Sean can tell you is the case. Aside from that, you'll have much greater odds marketing directly to sellers who are more likely to be distressed than one who is using an agent to sell.
Attempting to go around an agent on a listed property is not something I would recommend, and depending on the type of listing agreement, the seller may be contractually obligated to pay the commission anyway. That's not much different than a buyer trying to go around a wholesaler in an effort to get a better price from the seller directly. The agent (or wholesaler) has done the work to bring the property (or contract) to the market. Without them, it is extremely unlikely that you would have known the deal was available otherwise. They bring you the deal, they deserve to get paid. Please just don't be that guy. Real estate investing as a whole is a very small world and you'll be surprised how quickly you can make a name for yourself.
As for the comment of "They should be working for me and should represent me no matter what, without saying anything back to me." ... 1. If 3 separate agents are telling you the same thing, you should probably consider what they're telling you. When you use an agent, you are in theory, hiring a professional, not grunt labor who's just there to take orders. 2. Though most agents don't act like it, they are all small business owners, not employees, and have the right to work with whomever they choose. It's not Burger King - you don't get to have it your way just because you say so.
Let's assume for the purpose of discussion that you're dealing with experienced agents: if they have a choice between someone making 20 offers a day with a very low likelihood of success, or making 2 or 3 offers a week (and probably not all for for the same buyer) with a very high likelihood of success ... there are only so many hours in a day. If you can find a new, hungry agent who doesn't have much in the way of business, you might get them to do what you want for a little while, but you'll burn them out very quickly. And, if you're using an agent who's just getting their feet wet, you better know what the hell you're doing and know your market, because it's unlikely that they will.
- Investor · Dallas TX, United States · Member since 2014 · 1k+ posts · 1k+ votes10y
Most agents are lazy and they see your offer as more work with little hope of a payday. Find an agent who invests and make them this deal. I will buy with you exclusively but I need you to make my low ball offers. I will work with you to target properties that nobody but an investor would buy, and together we will make money at this.
the best place to look for this magical agent is at your local REIA meeting.
- 10yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
as others have said if you want to use the shotgun approach you need to get licensed and do it your self or better yet hire an assistant that does it for you.
the hot sheet in most MLS comes out about 3 am to 4 am.. you want to have someone up and looking at it so you can be the first offer in.. Strong EM gets the deals don't be a 100 dollar or 500 dollar EM buyer those get laughed at.. use 5 to 10k
you need the license any way if your desire is to buy and sell deals.. nothing like controlling your own destiny.
I have owned a few brokerages over the years and I can always tell when a guru has been through town my agents come running in.. Hey boss this buyer is a major player he wants me making 20 offers a day etc etc.. the rookies fall for this.. experienced agents tell them to take a hike.
I would then ask my agent to invite this so called big shot 20 offer dude in to the office I want to vetter them for you.. usually by the time I was done with them.. the pretenders just kind of slinked out .. the players I took to lunch and golf LOL...
- 10yChristina CareyPro MemberReal Estate Broker · Dayton, OH · Member since 2010 · 245 posts · 186 votes
@Josh Caldwell - yes, some agents are lazy, but most are just not willing to give up time they can be spending on more profitable efforts. If you have a choice between wholesaling a house with a low profit margin and few interested buyers, or a house with a higher profit margin and a dozen potential buyers, where are you going to focus more your efforts?
- 10yChristina CareyPro MemberReal Estate Broker · Dayton, OH · Member since 2010 · 245 posts · 186 votes
Originally posted by @Jay Hinrichs:
the pretenders just kind of slinked out .. the players I took to lunch and golf LOL...
Awesome. : )
We can tell when the latest guru has been through when we get 3 or 4 calls in a week from "investors" looking for buyers. We (my husband and I) will talk with them for a bit to gauge their level of seriousness and how realistic they are. We figure they at least picked up the phone and made calls, which is more than most of them will ever do. If it seems they want to put in the effort required to make it work, we invite them to our networking meetup, and maybe meet one on one for lunch or drinks if appropriate. If they act like they expect to become millionaires in the first 6 months while working 4 hours a week in their PJs, they get polite but realistic advice before wishing them well in their ventures.
- 10yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Christina Carey just for perspective.. I had a call from an agent that worked for me over the years.. And this anti agent sentiment were people think they need to be " big shot investors" or house flippers etc is so korny they really don't understand about a career .. 99 % of these folks on BP will either never do a deal or flame out within 24 moths.
So to my agent I was speaking about he has been in the PDX market for 12 years now.. He was part of the Jay Hinrichs team in the mid 2000 when we went to CA and did seminars for investors to buy OR and WA rentals one summer we wrote over 30 million.. I had 6 agents who were my team members .. so it catapulted them.
now he calls me today with a great deal in PDX that looks like 100k plus profit.. ( again being an agent we get the deals all those that don't want to be they just have to slink on the sidelines)
and he tells me he will close 35 plus transactions this year.. in our market were average transaction is 300k plus.. you can do the math.. and he does not advertise and its all referral.. now how good is that .. that is truly sitting in your PJs and your clients come to you.. NO risk you take listing that in this market are money in the bank.. sell a few homes .. raise his triplets ( yes trips) and life is good and it will be for the rest of his career because he laid a foundation..
the problem with all these folks who think they want to wholesale or think they don't want to have a license is they won't go through the apprenticeship to become a top agent
and the commercial brokers I know just flat kill it.. and I mean kill it.. 500 to way over a million a year in commission income NOT OWNING ONE DAMN thing... but no one on BP talks about this its all about wholesaling some crap box house in the mid west LOL..
- 10yChristina CareyPro MemberReal Estate Broker · Dayton, OH · Member since 2010 · 245 posts · 186 votes
@Jay Hinrichs Hey - we make money on those crap boxes here. : )
I don't do much at all with my license for others - I'm really not a people person, and I'm definitely not a salesperson. If we happen to click and you respect my time, then great - we can work together. Otherwise, there are plenty of agents I can refer someone to, depending on what it is they're looking for. I have a few agents under me, and I'll take on others as long as they have experience (and ethics), but they can't be needy - I don't have the time or the patience for it.
I know that someone who lays that foundation can do well in sales and make a killer income - more power to them. As you've noted, that success doesn't happen overnight. Whether it's investing or sales - or any other career or business for that matter - it all requires effort and good business sense to be successful for the long haul. It's just a fact of life that it's only a small percentage of people who fit the bill, with the vast majority of everyone else who simply like the idea of something, but never actually do anything about it ... or they try for a little while, hit a couple speed bumps, and then give up and move on to something else.
- 10yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Christina Carey I am pretty active out your way.. I fund fix and flippers and turn key guys.. so I understand this end of it.. but I don't consider it real estate per se its more like flooring cars..
price points are the same and the turn over is the same.. in your areas there are just more homes that peeps..
out our way we have a dire shortage of housing.. just no enough of it..
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