buying without agent/broker?

Orlando, FL · Member since 2016 · 8 posts · 4 votes

Hi all, anyone here buy/sell their own properties with (or without) a license? We are looking to buy 2-3mn in properties over next few months...and recover the 3% buyer commission paid by sellers. Our options seem to be 1) become licensed or 2) use rebate-type firm (ie Redfin) to recover some of the commission. On option (1), do we need to have a "sponsoring broker" to become "licensed" as an agent? Time is of the essence, so looking for fastest way to begin earning that 3%. Please don't construe this post as meaning buyer agents add no value. We have a CPA, RE attorney and colleagues to assist if needed. Not really DIY. Thanks!

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Jonathan GreeneBusiness Member

Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes

You can't get back the buyer's agent cost by not using an agent if you are buying off the MLS. The seller has already signed an agreement to pay both sides with their broker. You will pay the same amount except not be properly represented. You have to hang your license, if you get it, with a brokerage and that brokerage will take a substantial part of your commission as a new agent. Most brokerages have limited options for personal deals where you don't pay them the commission, but some have more than others. The real question is, what do you think you are saving on the buyer's side when you don't pay a buyer's commission when you buy?

Listing your own properties when you are not an experienced listing agent is a disaster. Usually the property is priced too high and you don't have the market and negotiation expertise to deal with the intake on properties now which require strict systems. You wouldn't even know how to upload it into the MLS.

Just find the best agents to do what you want. When you work with the best agents, the top 1%, you will never be losing money, you will be gaining expertise.

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Dustin Allen
Real Estate Agent · South Lake Tahoe, CA · Member since 2016 · 681 posts · 644 votes
5y
@Zuki Pingui
Good luck!
0 Reply
Jonathan GreeneBusiness Member
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
5y
You can't get back the buyer's agent cost by not using an agent if you are buying off the MLS. The seller has already signed an agreement to pay both sides with their broker. You will pay the same amount except not be properly represented. You have to hang your license, if you get it, with a brokerage and that brokerage will take a substantial part of your commission as a new agent. Most brokerages have limited options for personal deals where you don't pay them the commission, but some have more than others. The real question is, what do you think you are saving on the buyer's side when you don't pay a buyer's commission when you buy?
Listing your own properties when you are not an experienced listing agent is a disaster. Usually the property is priced too high and you don't have the market and negotiation expertise to deal with the intake on properties now which require strict systems. You wouldn't even know how to upload it into the MLS.
Just find the best agents to do what you want. When you work with the best agents, the top 1%, you will never be losing money, you will be gaining expertise.
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Caleb Brown
Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
5y
@Jonathan Greene True^^
1 Reply
Gene HackerPro Member
Flipper/Rehabber · Lake Isabella, CA · Member since 2011 · 974 posts · 488 votes
5y
It could be possible to get a license and work under a "flat fee" or "low fee" broker and get commissions paid back as part of the deal. Each state has different rules so the strategy may be different depending on where you plan on buying.
0 Reply
Jeffrey Donis
Investor · Durham, NC · Member since 2020 · 1k+ posts · 691 votes
5y
@Zuki PinguiYou could get your own license. Honestly, this might be more hassle than simply paying an agent.

If you want to get your license though, it could be a win win!

Good luck. Hope it all works out.
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Zuki Pingui
OP
Orlando, FL · Member since 2016 · 8 posts · 4 votes
5y

@Jonathan Greene Feels like a bit of mansplaining from you. "We wouldn't even know how to upload to MLS?" Are you joking? My BA is in computer science and logistics. Fairly sure we could figure out the massively-complex MLS system. Most of what is said below flies in face of everything we know: the agreement you mention IS negotiable, per discussions w/ our attorney a post-signing negotiation is not contractual interference, and lastly, brokerages don't take "substantial" commissions (unless you're a muppet who chooses to work for those firms!). Our broker gets 90:10 split at his boutique firm.

Originally posted by @Jonathan Greene:
You can't get back the buyer's agent cost by not using an agent if you are buying off the MLS. The seller has already signed an agreement to pay both sides with their broker. You will pay the same amount except not be properly represented. You have to hang your license, if you get it, with a brokerage and that brokerage will take a substantial part of your commission as a new agent. Most brokerages have limited options for personal deals where you don't pay them the commission, but some have more than others. The real question is, what do you think you are saving on the buyer's side when you don't pay a buyer's commission when you buy?
Listing your own properties when you are not an experienced listing agent is a disaster. Usually the property is priced too high and you don't have the market and negotiation expertise to deal with the intake on properties now which require strict systems. You wouldn't even know how to upload it into the MLS.
Just find the best agents to do what you want. When you work with the best agents, the top 1%, you will never be losing money, you will be gaining expertise.

0 Reply
Zuki Pingui
OP
Orlando, FL · Member since 2016 · 8 posts · 4 votes
5y
This is the answer. We arrived at something similar...thanks Gene. Great. So modus operandi would be: 1) earn inactive license 2) solicit for flat fee broker sponsorship around 90/10 to get license activated and 3) bring our deals (us) to table for buying/selling. This works AND starts the clock that some states need to see 2 yrs of broker work to award full "individual proprietor license."

Originally posted by @Gene Hacker:
It could be possible to get a license and work under a "flat fee" or "low fee" broker and get commissions paid back as part of the deal. Each state has different rules so the strategy may be different depending on where you plan on buying.

1 Reply
Zuki Pingui
OP
Orlando, FL · Member since 2016 · 8 posts · 4 votes
5y
For 2-3mn/year in new acquisitions, the break-even point is extremely low. Thanks!

Originally posted by @Jeffrey Donis:
@Zuki PinguiYou could get your own license. Honestly, this might be more hassle than simply paying an agent.

If you want to get your license though, it could be a win win!

Good luck. Hope it all works out.

0 Reply
Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
5y
Originally posted by @Zuki Pingui:
This is the answer. We arrived at something similar...thanks Gene. Great. So modus operandi would be: 1) earn inactive license 2) solicit for flat fee broker sponsorship around 90/10 to get license activated and 3) bring our deals (us) to table for buying/selling. This works AND starts the clock that some states need to see 2 yrs of broker work to award full "individual proprietor license."

Originally posted by @Gene Hacker:
It could be possible to get a license and work under a "flat fee" or "low fee" broker and get commissions paid back as part of the deal. Each state has different rules so the strategy may be different depending on where you plan on buying.

Buying solo I get discounts and rebates, but not 'commission'. I'm allergic to earned income anyway😎

An example on one I'm buying tomorrow is seller pays remaining property taxes for the year, recording costs ($400- our state is insane), my title and escrow costs and a landscape allowance of $2800. You can get pretty creative when a mortgage isn't involved.

Plus, the LA is happy. He is now a new bird dog and will let me know if something else comes up. For double endnging the LA usually eats some of these costs, but it's their idea my way. Start trying to meddle with commissions outright and they will be the opposite.

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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
5y
Originally posted by @Zuki Pingui:

@Jonathan Greene Feels like a bit of mansplaining from you. "We wouldn't even know how to upload to MLS?" Are you joking? My BA is in computer science and logistics. Fairly sure we could figure out the massively-complex MLS system. Most of what is said below flies in face of everything we know: the agreement you mention IS negotiable, per discussions w/ our attorney a post-signing negotiation is not contractual interference, and lastly, brokerages don't take "substantial" commissions (unless you're a muppet who chooses to work for those firms!). Our broker gets 90:10 split at his boutique firm.

Originally posted by @Jonathan Greene:
You can't get back the buyer's agent cost by not using an agent if you are buying off the MLS. The seller has already signed an agreement to pay both sides with their broker. You will pay the same amount except not be properly represented. You have to hang your license, if you get it, with a brokerage and that brokerage will take a substantial part of your commission as a new agent. Most brokerages have limited options for personal deals where you don't pay them the commission, but some have more than others. The real question is, what do you think you are saving on the buyer's side when you don't pay a buyer's commission when you buy?
Listing your own properties when you are not an experienced listing agent is a disaster. Usually the property is priced too high and you don't have the market and negotiation expertise to deal with the intake on properties now which require strict systems. You wouldn't even know how to upload it into the MLS.
Just find the best agents to do what you want. When you work with the best agents, the top 1%, you will never be losing money, you will be gaining expertise.

0 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
5y
Originally posted by @Zuki Pingui:

@Jonathan Greene Feels like a bit of mansplaining from you.

Why is it 'mansplaining'...?! He did not say that you couldn't do it because you're a women. If you're this sensitive and PC you will have a rough time in the RE world, young lady......
See.....that ^ might be mansplaining....

1 Reply
Steve K.
Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
5y
I got my license for this reason but ended up enjoying working as an agent. I wouldn't recommend bothering to get your license unless you want to actually work as an agent.
1 Reply
Basit SiddiqiBusiness Member
Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
5y
@Zuki Pingui

As a buyer, you normally do not have to pay any fee to the seller agent as the fees are all paid for by the seller.
With that said, I find it much better for me to work without a buyer agent and to have the seller agent work as a duel agent.

The two reasons are
1) I get to communicate directly with the seller agent cutting off one layer of interaction
2) I grow a better relationship with the seller agent who may bring me deals going forward.

Good luck
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Jonathan GreeneBusiness Member
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
5y
@Zuki Pingui I didn't even notice that you were a woman in the photo because I don't look at the photos so it's hard to believe you thought I was mansplaining to you when everything I said is correct. You seem like the type of person who asks a question in the forums, but already thinks they know all the answers and just wants people to agree with them. If you already know everything, just do it your way and see how it works out. The commission is absolutely not negotiable after signing. That does not mean that the brokerage can't agree to adjust, but most would not. You are getting horrendous advice and if every time someone gives you their opinion, you think it is mansplaining, I am not sure what to tell you. Based on your name and the tiny photo, I don't know how I would even know you were a female. Best of luck though.
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Zuki Pingui
OP
Orlando, FL · Member since 2016 · 8 posts · 4 votes
5y
You’re right that I’m getting horrendous advice…from you. Call and tell our attorney how you, a non-attorney with zero torts experience, are more well informed about real estate law!

Most of the forum is tired of your typical “brokers are awesome!” thinly-veiled (and boring) self-aggrandizing posts. I specifically said in the original post NOT to infer that brokers add no value…but expected responses like yours. “Use the top 1% of brokers”. Ugh. Like anyone knows that ex ante. “You can’t even upload to MLS.” Again, ughhh. I was writing nested for-loops in Matlab as a freshman when you were probably fumbling around on your iPhone. No offense friend-o.

Stop defending a dying field: brokerage. Redfin/Compass (I’m an early investor in both), are going to eat your lunch. You can’t stop the inevitable compression in commissions…look at b-a spreads in equity markets. Gone. Look at no-fee ETFs. Look at the world and completely stop assuming you know even a fraction of what I do.

Originally posted by @Jonathan Greene:
@Zuki Pingui I didn't even notice that you were a woman in the photo because I don't look at the photos so it's hard to believe you thought I was mansplaining to you when everything I said is correct. You seem like the type of person who asks a question in the forums, but already thinks they know all the answers and just wants people to agree with them. If you already know everything, just do it your way and see how it works out. The commission is absolutely not negotiable after signing. That does not mean that the brokerage can't agree to adjust, but most would not. You are getting horrendous advice and if every time someone gives you their opinion, you think it is mansplaining, I am not sure what to tell you. Based on your name and the tiny photo, I don't know how I would even know you were a female. Best of luck though.

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Will GastonPro Member
Rental Property Investor · Columbia, SC · Member since 2010 · 1k+ posts · 2k+ votes
5y
@Zuki Pingui another option: Find a great agent!
I used to think of commissions as an expense but have completely changed my mind on this. It's an investment. I happily pay realtor commissions now and never ask for a discount, rebate, etc.
A great agent will easily make up for it and then some.
1 Reply
Curtis Mears
Property Manager · Raleigh, NC · Member since 2014 · 729 posts · 596 votes
5y
@Zuki Pingui
I have bought properties with an agent, and without. I did not get licensed to buy a property, just made the offer and hired an attorneyto handle paperwork.
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Tushar P.
Member since 2019 · 332 posts · 171 votes
5y
@Zuki Pingui I did not use a buyer’s agent to buy my primary house. But that’s because I had free access to a lawyer with specialization in real estate (40+ year experience). The lawyer prepared the contract, advised on negotiating what to add/remove from the contract, even did title/survey check. The sale price couldn’t be lowered by 3% (builders don’t want to reduce the price of a new construction house), but credit equivalent to that was negotiated, e.g. builder paying portion of the closing cost.
I think most buyers use an agent because they are not savvy or don’t have a lawyer. Even if I didn’t have the lawyer for free, I think the lawyer cost would have been less than the 3% commission that the agent would have taken. Besides the fact that the lawyer had no conflict of interest, while the agent would be focusing on sale tactics.
I hope in future most of the construction will be via 3D printers and agent licenses will be displayed in museums. Hopefully the used car dealers will go extinct first, with others car manufacturers following the lead of Tesla.
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Michael Plante
Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes
5y
Originally posted by @Zuki Pingui:
Hi all, anyone here buy/sell their own properties with (or without) a license? We are looking to buy 2-3mn in properties over next few months...and recover the 3% buyer commission paid by sellers. Our options seem to be 1) become licensed or 2) use rebate-type firm (ie Redfin) to recover some of the commission. On option (1), do we need to have a "sponsoring broker" to become "licensed" as an agent? Time is of the essence, so looking for fastest way to begin earning that 3%. Please don't construe this post as meaning buyer agents add no value. We have a CPA, RE attorney and colleagues to assist if needed. Not really DIY. Thanks!

I sell with $100 listing on MLS and pay selling agent 2.5%

3 houses sold total time on market 2 weeks combined for all 3 properties

Just google ‘list your house on MLS for $100'
just went under contract to buy a house today no agent
Heard from a neighbor another neighbor was going to put house up for sale. I called them
walked over this morning. Agreed on a price.
Called title company. We will be meeting in their office on Monday to complete the paperwork
They will do the title search. Closing set for July 27th

1 Reply
Jonathan GreeneBusiness Member
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
5y
@Zuki Pingui pro-tip, don't assume you know everything about everyone when you are pontificating wildly in the forums. I actually am an attorney, I just do not practice anymore. I've been a real estate investor for 30 years. To your mansplaining gripe, my project manager is also my best friend and also a woman and knows way more than me and she would tell you the same thing. When you pop in as a new member to BP and just want an echo chamber, you will find it somewhere, but it won't help you. Best of luck.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
5y
Originally posted by @Jonathan Greene:
@Zuki Pingui pro-tip, don't assume you know everything about everyone when you are pontificating wildly in the forums. I actually am an attorney, I just do not practice anymore. I've been a real estate investor for 30 years. To your mansplaining gripe, my project manager is also my best friend and also a woman and knows way more than me and she would tell you the same thing. When you pop in as a new member to BP and just want an echo chamber, you will find it somewhere, but it won't help you. Best of luck.
OOPS.

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
5y
Back on topic.

I am a broker / my wife is a broker we have been for 3 decades and 4 decades respectively. We also mainly sell our own product IE new construction that we own.

And on very rare occasions we will have someone like you that it appears to be quite brite and probably does not need any help an attorney is not really going to help you other than read a few very basic contracts for buying and selling real estate its not rocket science stuff..

So anyway I had one gentlemen come to us.. he owns a Pizza Franchise business ( pretty big to do) and was buying a home for his daughter to live in ( cash buyer the type we liked) and he being very savvy went right at the Hey we dont need representation and we want you to discount the price by 2% my back end fee we offer other agents.. ME sure NP.. I net the same

So when I buy and want to use my license or even if I am not licensed in that state I do the exact same thing I tell the listing agent I need NO representation and I want a discount this is where @Steve Vaughan was alluding to.. you dont want a commission per se its taxable as ordinary income you just want a credit.. your basis will be a little lower but it gets you to the same place.. I am selling one of my new constructions in Canby right now to another agent and he is using his fee as a credit to buy upgrades I net the same.
I am sure your bright enough to negotiate these things.. U may throw the listing agent a little bone so its worth working with you.
But out our way the ONLY time your engaging an attorney is if your in a lawsuit or your buying very expensive 8 figure complicated projects.. if its just rentals no need.. not that complicated .. I buy and sell in FLA all the time I have never engaged an attorney there you only need a nice and competent escrow officer. Just Sayin..
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Mindy JensenPro Member
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
5y
You didn't say which state you're buying in, so this is more general information.
Yes, any licensee who is not an attorney (I don't believe you said that you are an attorney, Zuki) must hang their license under a more experience agent for 2-3 years.
Every state has different requirements, Colorado is 168 hours of coursework, plus testing, background checks, etc. Some states have as little as 40 hours of coursework, but of course there is still the test to become licensed. It took a couple of weeks after passing the test to get my license sent to my broker.
Since time is of the essence, I think your best bet is to request a rebate from the agent who represents you, rather than getting licensed unless you are truly interested in working as a real estate agent, again I did not get the impression this is what you wanted to do.
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