Why is it wrong to use more than one RE agent?
Investor · Cypress, TX · Member since 2013 · 403 posts · 59 votes
Why is it wrong to use more than one RE agent?
Most Popular Reply
Investor · Omaha, NE · Member since 2011 · 475 posts · 211 votes
13yI is absolutely OK. I work with 3-4 agents in my home market and 2 in another in which I buy. Don't let an agent intimidate you into working with just them, you are free to work with whomever you choose.
29 Replies
- Investor · Omaha, NE · Member since 2011 · 475 posts · 211 votes13y
I is absolutely OK. I work with 3-4 agents in my home market and 2 in another in which I buy. Don't let an agent intimidate you into working with just them, you are free to work with whomever you choose.
- Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes13y
I would say do not lock yourself in with any agent exclusively, ever, but you also don't have to let them all know you may work with someone else. Even though I eventually used the same agent, it was due to him actually being professional, providing me with homes meeting my criteria, never pushing exclusivity, and the only time we ever signed anything was when writing the contracts (and they stated just the home we were bidding on). But this was after dealing with several inept agents who just send you every home in the MLS, not caring about what we were actually looking for, or ones that spent more time trying to lock me into an exclusive agreement than show me homes. So if you're feeling pressured from an agent to sign any exclusive agreements, it's probably a good sign it's not the agent you want to work with, anyway.
- New York City, NY · Member since 2012 · 60 posts · 14 votes13y
It is very appropriate to work with many agents.
- Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes13y
The above comments are very true, you can certainly have a few agents keep thier eye out for what you want, perfectly acceptable.
But, what investors don't see is if an agent is working to beat the bushes for you, they preview a property (which they should not be doing without an agreement as they put themselves at risk of losing time and money) or some newbie agent spends three days trying to help you out.
If all you're doing is using people and sneaking around talking to 3 agents, you'll get a bad name and most won't work with you, unless you are under contract.
Realtors owe a duty and loyalty to thier clients or customers, it's only ethical conduct for those being assisted to show thier respect. No one likes a user!
The best way to approach this is by informing the Realtor that you will buy from them if they bring a deal, but that you have made the same arrangement with a couple other agents as well.
Now, usually, you won't hear of a broker suing a client for commission on some residential deal, it's just bad public relations. But, if you sign a buyer's agreement with more than one agent, the chance of trouble just went up for you as some brokers will nail you for the commission, depending on how the contract is written. First, you decieved the agent, secondly you are in breach of contract and they will not be working with you ever again, so nailing you for cheating them is much different than suing over other listing issues.
An agent that thinks you are not being honest with them and trying to use them won't just drop you, they will tell other agents as well.
BTW, my parents were both Realtors, LOL, you can imagine how I had to work that out with other agents! Other agents would say....oh, you're mom and dad are Realtors, you'll be buying from them! I usually said yes, but not always, it was a touchy situation. :)
- Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes13y
Ben,
It's not "wrong". However, if you are soliciting multiple agents in the same market, they may not feel a burning desire to work hard for you and/or bring you their best deals because they know that you are not loyal to them and may end up just buying from someone else.
But there's nothing wrong with it if that's what you want to do. When I first started, I shopped around for an agent to work with who understood my investing strategy and who I actually liked to work with. During that time, I worked with several agents.
However, once I found a good agent to work with, I pretty much just stuck with them. Now, I tend to only work with one agent in each city (market). I do work with agents in different cities (markets) though, because I feel it's important to work with someone who has local knowledge and connections.
- Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes13y
Last couple replies are right on. If agents know you are working with other agents they aren't going to work hard to find you deals. Agents are also programmed that buyers should work with one agent, it goes against hat we have been taught onhave buyers work with miltiple agents.
- Investor · Las Vegas, NV · Member since 2011 · 188 posts · 116 votes13y
One of my partners is an agent. We still utilize other agents and let them keep the commission if they find something or have the ability to lock up homes for me. 10 sets of eyes get more done than just one. Most agents and understanding.
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes13y
I can see for residential as many agents are a dime a dozen.
Ben any residential broker/agent in my view should be turning around the questions and asking you some things.
What are you trying to do??
Flips?? Assigning?? Wholesaling?? Buy and hold?? etc.
Different niches will require getting a property at different price points. This let's the broker/agent know the probability of finding a property and getting paid.
WHO is funding your purchases?? Do you have proof of funds with liquid cash of your own in the bank ready to perform?? OR Are you using a partner, hard money, private money, etc. to close a purchase??
How many properties do you see yourself purchasing in this area this year??
Any broker/ agent in the business for any amount of time should be asking a buyer these types of questions. If a buyer takes offense a broker/agent needs to move on.
My clients on the commercial side are loyal to me and keep coming back. I make myself valuable by not being just an average broker/agent. I spend a bunch of time on networks and connections and learning everyday. The people being mediocre can't expect to rise to the top.
Sadly I see many agents not even know what niche might be good for them or ask themselves how they see a profitable business for themselves and what that would look like. They are like a deer in headlights. New investors getting started usually learn with new agents and both have inexperience. This for investors with no experience and no capital doing long shot type real estate deals trying to make something happen.
If you are an investor with some cash just getting into real estate then a broker/agent needs to have a talk about rates and returns and see if that buyer is realistic.
For instance if someone new comes to me and says I just cashed out my stocks and have 600,000 cash to invest and I want to buy a multifamily building. I then ask what kind of returns they are wanting?? If it's a 12 cap in a good area then I have to bring them down some on their expectations because that is not what the market is transacting at. They might get a 9 to 10 in my area which is still good. If they go to a war zone they can get a 12 but I don't think they will want that headache. So I can help buyers get great deals but someone wanting an INSANE deal where one or two properties all year long come up and there are 40 offers on the property is a waste of time.
As a broker/agent if you stand for nothing you will fall for anything. Many guru's teach for investors to try and find new agents and run them into the ground to find an unbelievable deal etc.
On the commercial side I bring deals to my clients because I understand them and what their goals are. I have seen their proof of funds and we have a history together. Investors that call everyone under the sun go to the bottom of my list and I have properties sold way, way before I get to those people.
- Investor · Cypress, TX · Member since 2013 · 403 posts · 59 votes13y
The Houston market is way too big to work with one agent. I am a relatively new investor with only one rental property. I have cash and am working with a HML. I wouldn't work with the different agents in the same area. I would rather work with somone who knows that exact area. Like someone for the NW side and someone for the SE side. Is that ok?
- Specialist · Orange County, CA · Member since 2008 · 2k+ posts · 623 votes13y
Hi Ben Hughes. There's nothing wrong in working with multiple buyers agents, just keep in mind that they are commissioned and if they know you're working with other agents they could decide to stop working with you, or lose motivation because of the added competition.
- Commercial Real Estate Lender / Syndicator · Dallas, TX · Member since 2011 · 888 posts · 309 votes13y
If an agent has two or more buyers looking in the same subdivision, does that agent only tell one buyer about the house? Nope! Chances are that agent will try to instill a sense of urgency in the buyer.
- Involved In Real Estate · Pickerington, OH · Member since 2013 · 45 posts · 3 votes13y
Hi Ben Hughes. Realtors work hard and only get paid if a deal goes through, so it is only fair that you are honest with realtors. If you want to find a few good realtors to partner with on looking for investment properties, that's a good thing. However, just using people to run around in case one of them happens to bring you a great deal is pretty harsh. I want to partner with clients the way Joel Owens described above. I believe you'll get better results in the long run with that approach.
- Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes13y
I have feed alot of agents, if they spend some time pulling comps or looks like they are trying to get something rolling, at least feed them, most have lunch, pick up what they did for you while you pick up the tab! :)
- Wholesaler · Brooklandville, MD · Member since 2013 · 149 posts · 29 votes13yThat is what I have done with an agent I am working with now where we meet up every month discussing what I am doing and I pay for her lunch every time. Especially when you have a property under contract with a pending assignment agreement 9/10 that agent will take notice anyway.
Originally posted by Bill Gulley:
I have feed alot of agents, if they spend some time pulling comps or looks like they are trying to get something rolling, at least feed them, most have lunch, pick up what they did for you while you pick up the tab! :)But at the begining, I was kinda nervous in asking for "comps" from agents. I just didnt want to come off harsh as point out earlier. But now since the agent im good friends with is willing to let me be her brokers assistant so I can have the access to the MLS would be great. Just hoping she passes :)
- Investor · Cypress, TX · Member since 2013 · 403 posts · 59 votes13y
Originally posted by Brenda Layman:
Hi Ben Hughes. Realtors work hard and only get paid if a deal goes through, so it is only fair that you are honest with realtors. If you want to find a few good realtors to partner with on looking for investment properties, that's a good thing. However, just using people to run around in case one of them happens to bring you a great deal is pretty harsh. I want to partner with clients the way Joel Owens described above. I believe you'll get better results in the long run with that approach.I'm not lying to anyone and I'm not making anyone run around town. I'm talking about partnering with 2-3 agents that know their specific area. I don't see what is wrong with that. They find a house with the criteria I'm looking for then they get their commission when I buy/sell the house.
- Involved In Real Estate · Kansas City, MO · Member since 2013 · 90 posts · 9 votes13y
Hey everyone,
Good question, it can be a bit of a tricky situation on both sides. The investor doesn't want to get locked in to an agreement with one agent who might not meet their needs, and the agent doesn't want to get lead around by someone who has no intention of buying through them.I work with a lot of investors who are weary of signing an exclusive agency agreement and getting legally bound to one agent. What if another agent brings them a deal, what if the agent was a fast talker not a hard worker?
The way I've found to make both sides feel comfortable is to have clients either sign agreements for specific properties with short terms. Or I have my clients sign non exclusive buyers agreements where they can use other agents but are bound to me on properties that I introduce them too.
Sure I've heard the horror stories of incompetent agents out there, but some of us really do work hard for our living and don't pay bills by working for free.
P.S. 600K buys a whole heck of a lot of multi family not in war zones here in KC. HAHAHA
- Real Estate Broker · Woodbridge, VA · Member since 2013 · 179 posts · 33 votes13y
I'm a Real Estate Agent & Investor. It goes both ways really.
I have an investor/client/partner and friend that was clear about using multiple agents for he does 2 markets. Honestly, it does somewhat go against my grain but at the same time I respect his upfrontness and have grown to accept it. However, that is the only exception. Other investors have approached me as a Realtor and I will kindly decline their offer should they use other agents. I am a relationship agent and get deep discounts from various HVAC, Roofers,Materials etc and have done so by being loyal over the years and sending them business. I won't pass that on to someone else unless they too are loyal to me.
It's hard to quantify the investment I have to save on labor, have a network of buyers and sway with lenders and attorneys to get things done.Again, it does both ways. If a Realtor is investment savvy and is aware of someone that's use more than one agent, you are probably going to get sloppy seconds because he/she will have snagged the good deals for his/her loyal clients.
- Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes13y
Xing Zhu I know that's a popular theory, but that means you're finding on realtor.com, zillow, etc. and that means you're probably 3-4 days late to the party.
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes13y
If any brokers or agents are reading this topic think of things this way.
If you control the inventory you control the sales. If you have the connections and network and access to what people want to buy you are in an advantageous position over many brokers and agents out there.
If a property has 10 offers on it as a buyers agent you have a 10% chance of winning and getting paid or going out and doing the whole process all over again. If you control the off market properties and then your listings and there are multiple offers you still get paid as the listing broker.
This is why for residential most agents start off as buyer agents working with first time home buyers. Later on when those buyers start to sell they build up listings if they can hang in the business long enough.
Commercial is a different dynamic than residential. Access to inventory buyers want is still key. When I analyze properties I do a bunch of the sifting and sorting with the numbers to save clients time. High income earners with access to lots of cash do not have time to be super hands on with things. They need someone to weed through the crud and bring them viable deals and educate them on the process.
The difference in working with residential versus commercial investors is vast. If an investor wants a property to purchase for a little house that is 50,000 and that agent works for a brokerage they might be taking 1,000 after split gross on a deal. The sad part is wholesalers make more of a fee than that selling those small houses.
Ben you can use multiple agents just let them know you are after the deals and show proof of funds to them.
My commercial clients are loyal to me so I am loyal back to them. The rest that are just making calls and deal hopping I do not have time for. Years ago I would work on the vacant apartment buildings selling those. I stopped after awhile. Usually if I found a 30 unit in Atlanta it was stripped inside with copper and wiring. The investor buyers were buying at 3,000 a door because it needed 12,000 per unit in rehab. The properties would be short sales and have water liens which both would have to be negotiated and if there was a second even more work.
After working months with city attorneys and the banks and the watershed department to negotiate the water liens I ended with a 120,000 sales price and would make only about 6,000 for months and months of work and endless calls. I learned very quickly the time value of money. Today I sell fully performing apartment building or buildings that have 30 to 70% occupancy where the units are not trashed yet. I can have price ranges in the millions of dollars that way and my time is compensated with a very large commission check on each deal.
Just like an investor you have to define the business you do want with the business you do not want. How hard you have to work for your money and the end of the day and the time involved will affect your returns. Ben was asking about how broker or agents think and I was just giving my thoughts here. I am a commercial broker and investor myself so my situation is different than the typical newbie agent hustling to make a small coin to pay their bills. If you are a broker/agent make yourself valuable so that YOU can decide what business you want to transact and WHO you want to grow relationships with.
- Fukuoka, Fukuoka · Member since 2012 · 148 posts · 29 votes13y
Fascinating thread, thank you :) While I prefer to work with the one great agent (or buyers' agent), simply because a single point of contact per area is easier to manage - realistically in 9 areas out of 10 that ends up being impossible - the best deals are like well-hidden gems in the dirt, takes a lot of digging by a lot of people, in the cities at least.
Rural areas are an exception - there you'll often find the one dominant agent in perfect synch with their area, and you needn't go further.
- Landlord and Rehabber · Newton, MA · Member since 2010 · 2k+ posts · 877 votes13y
It somewhat depends on how much you are asking them to do.
If you are running them ragged looking at dozens of properties, running comps on all of them and even comps on off market deals you should be pretty loyal.If you have them just tell them your criteria and they bring you properties that meet them and only check out ones that pass your screening then you can work with many. I'd be okay signing an exclusive on each property with the agent.
I do the 2nd type.
I'm also licensed so run my own comps and can look at places without anyone else. So I just use agents to bring me leads I might miss.
There are actually a lot so I'm happy to give up the commission for that.
I also will list the resale with them if it is a flip so they get that potential commission as well. - Investor · Cypress, TX · Member since 2013 · 403 posts · 59 votes13y
[quote=Ben you can use multiple agents just let them know you are after the deals and show proof of funds to them.
quote]I couldn't agree more with that statement Joel.
- Investor · Cypress, TX · Member since 2013 · 403 posts · 59 votes13y
Originally posted by Shaun Reilly:
It somewhat depends on how much you are asking them to do.
If you are running them ragged looking at dozens of properties, running comps on all of them and even comps on off market deals you should be pretty loyal.If you have them just tell them your criteria and they bring you properties that meet them and only check out ones that pass your screening then you can work with many. I'd be okay signing an exclusive on each property with the agent.
I do the 2nd type.
I'm also licensed so run my own comps and can look at places without anyone else. So I just use agents to bring me leads I might miss.
There are actually a lot so I'm happy to give up the commission for that.
I also will list the resale with them if it is a flip so they get that potential commission as well.This is exactly what I'm trying to say, it's just hard for me to put it down in works sometimes.
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