New Real Estate Agent Question

5 Replies

I am a newly licensed agent whose focus is primarily investors. On one side I have a group of cash investors who want me to send them properties. On the other side I have a number of people (some agents but mostly not) sending me properties everyday. Some of these are great deals. My question is, how do I make my money? Do I make the investors sign buyer agency agreements? Many of the sellers dont want the extra fees I am not sure how to properly handle this.

@Karen Montague

Hi Karen, in my market California. The sellers pay the buyer's Agent commission. 

So, if you are in California, your services to the investors are free. 

Also, I highly recommend, getting the buyers agency agreement signed. Simply tell them, it's you Karen, committing to them, and vice-versa. A so called marriage.  

Hope this helps

-Rudy Vazquez

@Rudolph Vazquez. Thank you for your response. I think that’s the only way to do this. Sadly, many of the sellers don’t want to pay the commission and are doing thIs wIthout an agent I would have seek compensation from the buyer.

@Karen Montague , the answer to your question really depends where you're licensed and working. I'm a California real estate attorney and broker. If I represent the buyers in a residential transaction that is listed on the MLS, the seller typically pays my commission through the listing agent because we agree to that in the purchase agreement and in our agreement with the local Realtor association and MLS. Commercial and off market transactions operate differently and are generally subject to what is negotiated and agreed upon in a contract. You can also request that the buyers sign a buyer agency agreement specifying who pays the commission.

@Karen Montague

Hi Karen,  You got some great answers above and I agree with both of them. One other option, that I have used in a situation where there was no commission offered by the Seller,  was to ask the investor to list with me on the subsequent sale of the flip property, and I made my commission then. Now I know that not all investors are flipping, he or she might be buying and holding, so it wouldn't work in that case. in that cast, there is also such a thing as goodwill, meaning you provide the investor the deal without earning a commission on it, but you have most likely created a positive impression on that investor and when he or she does want to sell they would think of you first. Best of luck!

@Karen Montague you don't say what state you are in... which can make a difference in seller costs. However, when a seller sends you a property the question is "why"? Are you soliciting for properties? Do they think you will buy it yourself? Compensation of some sort should not be objectionable to them. Simply ask "This looks like a pretty good deal; I may have someone who would be interested in buying it from you, but how will I get paid for my services?" In Colorado I'm not allowed to do it for free - but I can negotiate my price. I did a deal last month for only $500 - but the property was a $50K condo and one unit owner was selling to another unit owner. All I had to do was write up the legal paperwork and walk them through (cash deal). Perhaps you should develop a menu of services and their price. Often sellers feel comfortable marketing their home and discussing its attributes - but get lost when it comes to the paperwork. So let them do what they can and charge them less for the part you help them with. Another strategy would be to actually get an offer written up and waive it under their nose - including a fee to be paid to you. If a ready buyer is produced and has signed on the dotted line a seller may be more receptive to actually paying. Your services and connections have a value. Don't work for free!