Real-Estate agent compensation?

18 Replies

Hello again all! For those who do not know, I'm a newbie wholesaler here in SC. and I'm in the process of building my investment team. A local realtor here has informed me that she has some experience working with investors and as a result I will be meeting with her later this week. Herein leis my question; Other than the commonly small commission that she will receive from a few of my normally very low accepted offers, what other incentives do I have (as a wholesale investor) to offer an agent for the giving of their valuable time and expertise in helping me to comp anywhere from 5 to 20+ possible deals per month with most of them being FSBO's.

Thanks in advance for all of your valuable time and expertise.
Reg. Jr.

That is cool you wanna offer more up, but be cautious.They typically will not take any coin outside of closing that they do not split with their broker.

Just the fact that you are buying a lot of properties should be enough to keep em motivated!

Medium screen shot 2017 05 20 at 8.00.17 pmRob Gillespie, Rob The House Guy, LLC | [email protected] | 330‑635‑9717

Lunches, and referral business works great!

Hey thanks for the info and suggestions guys. And Danny the lunch and referrals tip is just awesome. It's simple and affordable! Oh and did I mention "affordable"? lol...

I have bought gifts for the agents I use from time to time. It all depends on how much help they give and how many commission they get.
I know if you pay them directly, they have to give it to the agency, and I don't even think they personally receive 30% of it.
But gifts are usually fine. You can have the agent find out what the policies at their company are. I would hate to get a good agent in trouble or at worst, fired.
Mainly if you begin turning some very profitable deals for yourself. I did something simple and cheap, my agent had always wanted one of those above ground pools for the summer, you know, 3' deep by 12'. So I just picked one up, dropped it off on her door step. I think it was only $100. It's amazing how hard some people will work with you when they know you care.

I try to take my agents out for lunch/diner as much as possible when they have been putting in extra work for me.

This is a question I get asked all the time.. if your an active investor and your buying from FSBO and the realtor is helping you out but not making much commission, then to keep them happy pay for the CMA. but only if asking for lots of CMA from them and they are not making money. on another note.. I want to applaud you for looking after your realtor.. you are amazing and an example to look up to.. with respect. T

Or if you are re-selling the property, I'd tell them that I will be listing with them. That will get them to help you out.

But if you are pretty active and are using the same agent/agents I'm pretty sure they won't even care to help you out.

My agents do some much for me to keep the relationship strong, and it's very much appreciated

I pay my realtor with loyalty, he gets all my listings once I put them on the market and also my personal moves as well as 3 others that I have referred to him including one from Will himself. Also at least here in MO realtors get a minimum so even when I buy houses for 20-30K I think the buyers agent gets $1500.

Just something to think about -- not all buyer's agents are good listing agents, and vice-versa. While you may be trying to do a good thing by offering to let your buyer's agent list your property, you may in-fact be doing yourself a disservice if that agent doesn't do a very good job of selling your property.

Give your agent the listing *IF* s/he is a good listing agent -- otherwise, give him a gift certificate to a nice restaurant and hire a good listing agent instead.

I would also add I don't like the "Do this for me and I will pay you later with the listing" strategy.

This is the same as do bpo's for FREE and the asset manager company will give you the promise of a listing after so many freebies.

I have also seen this on buyer rebates where if the seller gets a rebate on the listing and the seller is supposed to use them to purchase and then uses yet another agent for a rebate on the purchase end.

I think a better way is paying a broker/agent for their time NOW and then when it closes they rebate off the portion of what is already paid out or just reduce their commission to compensate on the back end.

When I did bpo's we did this with asset management companies.We told them pay us now and when you assign a listing and it closes we will credit the bpo money off of the commission.

This kept them honest. I know many of the investors on this board are honest but for every one of you I can show 5 dirty investors that will use a broker/agent and spit them out.

Their is a fine line for a little upfront work to develop a relationship and flat out doing a ton of front end work hoping to get paid on the back end.That isn't a business to me but gambling as a broker/agent.

I agree with J Scott that a great buyers agent doesn't always make a great listing agent.

Medium allworldrealtyJoel Owens, All World Realty | [email protected] | 678‑779‑2798 | | Podcast Guest on Show #47

Here is a typical fee schedule for BPOs from outsourced companies. $50 for Exterior BPO and $75-100 for interior.

Keep in mind a CMA takes 2-3 minutes while a BPO form takes about 30-40 minutes a piece.

If you want to compensate them, this is how they are compensated by banks/outsourcers.

Wow! Awesome responses from some really intelligent people. With all of the terrific responses that you guys has shared I have had a serous paradigm shift in the way I was thinking about me and my Realtor's working relationship. However now I have another issue! How do I compensate all of you guys? Thanks a million.
Reg. Jr.
PS. You guys are truly heaven sent.

I also 2nd that a good buyers agent isnt a good listing agent. Most of the good listing agents I know won't work with buyers. They just refer out the business to another buyers agent. @Reginald S. you'll learn that BiggerPockets is a great place for new investors as well as seasoned investors. No one here is or would ask you to pay for their advice. We all learn from one another and grow together. Pay it forward and help someone else out when you start closing deals.

How do I compensate all of you guys? Thanks a million.
Reg. Jr.
PS. You guys are truly heaven sent.
Actually, there is a way. Register for a BP Pro account or make a donation to Biggerpockets. These funds help Josh build in more benefits to the sight which in turn, help us all!

Medium be logoWill Barnard, Barnard Enterprises, Inc. | | Podcast Guest on Show #130

Thanks Danny for your post my friend however I was just kidding about compensating you guys. That's why I included the "Laugh Out Loud" symbol behind the comment. Nevertheless I am so looking forward to that day when I can pay it all forward by helping someone else out just as you guys (with your expert comments and advice) have generously helped me and so many others out.

@Reginald S. - I understand you were kidding, I was not. I believe it is ALL of our responsibilities to help improve the sight and that can only be done with cash. It takes cash fro Josh to buiold in new benefits for us and with more of us "giving back" through donations and Pro Account revenues, we all benefit. Pus you get a really cool badge on your profile! :)

Medium be logoWill Barnard, Barnard Enterprises, Inc. | | Podcast Guest on Show #130

"Nevertheless I am so looking forward to that day when I can pay it all forward by helping someone else out just as you guys (with your expert comments and advice) have generously helped me and so many others out." - Not Kidding here either guy...