Specialist · Pelham, NH · Member since 2013 · 547 posts · 269 votes
I'm looking at a bank owned property and was curious if it would be better to use the listing agent as my buyer's agent, since I don't already have one.
I don't know if they would try to sell my offer to the bank a little harder then others because they're getting both ends of the commission.
Anyone have any personal experience on this?
Oh yeah, the property is in NH and I'll probably be using hard money to get it.
I bought a bunch of REOs that were low-priced cash deals. I did not get offers accepted when going through different buyers agents. But then I switched to going through listing agents directly and everything changed. I pretty much got every deal I offered on.
It's not so much that the listing agent isn't handling things ethically, but they might give you an idea if there are other offers. Or they might tell you that with $ 500 more you might get it etc.
Most of them , the negotiations were by phone/email and no paperwork was prepared until we had agreed on things. Was sooo much easier than making the offers through a buyer's agent.
I did use my own contracts, filled everything in, and faxed it through with a copy of my earnest money check (which was full asking price). It was difficult for the listing agent to ignore me then ;-)
My experience is generally banks won't take offers unless the property is listed and they'll list it as it goes through their internal process. Many times the banks don't even own the property some trust on wall street does...
I agree. You can potentially get access to information you otherwise would not have. Just keep in mind though that the agent is working for the seller first and be careful about sharing too much information yourself.
This will likely be argued just as they similar thread was concerning using only a listing agent, could have sworn you participated in that thread Derreck, maybe not.
IMO, as I stated a few days ago, it's not a good idea for a "newbie" who is rather unaware of what that Realtor's role is to deal with a good agent without representation.
My father is a licensee, yes he's still at it, I help now and then, so I have done REOs both ways, with and without representation and I have seen no real difference in my market. While any listing agent hope to get both sides, they will play by the rules of the Board of Realtors with respect to co-brokerage arrangements. They will submit the offer and the offer, if it's reasonable in that market, will be looked at. I might add too that I think most investors put too much stock in the influence a listing agent has on any asset manager. I'd think they are polite, nod and say yes, smile on the phone but really, that asset manager may have been through a thousand deals and that listing agent just hit sale number 227 in that area. Saying, somewhere up the food chain where approval may be made at any bank or portfolio firm, they know what the need and what a deal looks like that will close.
You'll also find that brokers who assign agents to REOs or a bank selecting an agent won't be selecting an agent with a 14 transaction record, they will be seasoned agents, 227 for example is enough to have been around the block. So, in a sense, compared to a rather new investor, the investor will be at a disadvantage in many aspects I'd say. Being represented won't cost you any more in the deal so there you are, might be much better off being represented IMO. :)
I bought a bunch of REOs that were low-priced cash deals. I did not get offers accepted when going through different buyers agents. But then I switched to going through listing agents directly and everything changed. I pretty much got every deal I offered on.
It's not so much that the listing agent isn't handling things ethically, but they might give you an idea if there are other offers. Or they might tell you that with $ 500 more you might get it etc.
Most of them , the negotiations were by phone/email and no paperwork was prepared until we had agreed on things. Was sooo much easier than making the offers through a buyer's agent.
I did use my own contracts, filled everything in, and faxed it through with a copy of my earnest money check (which was full asking price). It was difficult for the listing agent to ignore me then ;-)
@Bill Gulley - I don't think I was part of that one, but I do think I read some of it. I understand the concept of using an agent and the benefits of that. I'd never try to do a deal without one! I dated an agent for several years, so I have a little more knowledge then the average newbe, but I'm FAR from a pro!
This is why I was thinking that I should use the listing agent, they have the experience. I could just pick an agent off a website because she's pretty, but that doesn't mean that she's any good!
@Michaela Graham and @Account Closed - That's exactly what I suspected. I would never ask an agent to do anything illegal or unethical, but I figured a little tip here and there could make or break a deal. If someone already offered $120k, for instance, and got turned down, they could tell me that and I could then offer $125k.
Might have missed my point, the listing agent will have experience and they are not working at all for you, their goal is still the highest price and quickest done deal.
I agree, get an agent on your side that has experience in REOs, one with thick skin who chews on raw meat!
BTW, anyone who may think that listing agent is telling you about other offers as a favor.....wow, hook line and sinker. :)
I have purchased 2 properties using the listing agent with the REO's. I think that it worked out better for me and I don't think I could have gotten a better deal.
@Derreck Wells - There are a lot of agents who are selected because they are pretty. The old chicks, fat chicks, and ugly chicks will say that it ain't so, but they are wrong. And if you will notice, the old chicks who are super-star agents were also the pretty ones 30 years ago. Anyway, for your question - it all depends on your experience and knowledge level. It's hard to prove, but I suspect that offers made directly with the REO listing agents often get preferential treatment. Don't know that for certain, but I have my reasons to suspect that it's so. On the other hand, I am also a Realtor and I write my own offers (and therefore earn half of the commission on deals that I buy), and I've been able to buy all that I need. There are probably some listing agents who would actually rather give up half the commission in order to be selling to a buyer who has a good, knowledgeable Realtor assisting them. Sorry, I don't think I really answered your question.
Might have missed my point, the listing agent will have experience and they are not working at all for you, their goal is still the highest price and quickest done deal.
I agree, get an agent on your side that has experience in REOs, one with thick skin who chews on raw meat!
BTW, anyone who may think that listing agent is telling you about other offers as a favor.....wow, hook line and sinker. :)
@Bill Gulley - That kinda is the point, I think. Their goal is the highest price and the quickest done deal. Therefore, they can tell you "You need to come up to $150,000 on this, the bank already turned down $145." because they don't want to waste the time of submitting an offer that they know will fail. If the highest price is still $100,000 below ARV, then what's the problem? Might you have saved $2000 if you put in offers at $145, then $146, then $147, and finally accepted at $148?... Maybe. But you could also be stepping over dollars to pick up that shiny dime. While you're wasting time on multiple offers, the listing agent has told others to put in offers at $150, and someone might and you lost the whole deal. Seems to me that the quickest, highest offer is the way to go sometimes.
However, I don't think I'd use the listing agent on a private sale. A private party selling a house will move on their price depending on what's happening in their lives. Even if an agent tells them, you should hold out for $XXX, people can get sick of the property and the process and just take an offer because it's in front of them and seems like the best way out. I'd want a pro on my side of that negotiation. I have to think that the banks look at property a bit differently. The asset manager you're dealing with doesn't own the house and get's paid his salary whether the house sells or not. Maybe there are bonuses for selling, I don't know, but the point is that they are not emotionally attached to the house. To them, they're going to take no less then a set # for a given house. Period. Doesn't really affect them if the house sells or not. It's just a numbers game.
Kind of like when we're looking to buy an investment property. I know for myself, I don't look at houses and think "I'd like to live there. There's a garage for my motorcycle and one for the truck..." No. That would be an emotional response. I'm looking at the property thinking "That roof is going to be $7000, those windows will be $3000, that siding repair on the garage is $1000." etc. It's a numbers game. If the numbers don't work, I move on. I'd think it's the same with a bank. They're thinking "We're losing $1200 per month in holding costs, we own this house for $145,000 we need to get $146,200 if it sells this month, $147,400 if it sells next month", etc. Anything over that number would work too, so they start the listing at $160,000 so there's room to come down if it doesn't sell quick.
Of course, I'm just a handyman, not a banker. I could be way off on this. That's just the way I'd look at it if I were a banker. :)
I'm a broker and when I buy a bank owned house, I usually go through the listing agent and let him have his commission AND mine. You have a WAY better chance of getting the property if the listing agent is getting all of the commission.
They might also tell you what price you need to come in at, even though they are not supposed to. Sometimes, the only way to win is to cheat.
I'm a broker and when I buy a bank owned house, I usually go through the listing agent and let him have his commission AND mine. You have a WAY better chance of getting the property if the listing agent is getting all of the commission.
They might also tell you what price you need to come in at, even though they are not supposed to. Sometimes, the only way to win is to cheat.
@Rob K. - I'm also a Realtor and I've thought about doing the same thing (letting the listing agent get both sides). I've thought about calling them up and saying, "I'm busy right now, but would you write up this offer and you can catch both sides". Which is often very true.
@Rob K. - I'm also a Realtor and I've thought about doing the same thing (letting the listing agent get both sides). I've thought about calling them up and saying, "I'm busy right now, but would you write up this offer and you can catch both sides". Which is often very true.
I usually call the listing agent and tell them a price that is lower than what I had planned to offer and say, "If I run this through you and you get ALL of the commission, can you get the bank to accept X?" They might then say that the price is too low, but X might wrap it up. Some of them will say that they have another offer and you need to be at X price to get it.
I also realize that it is unethical and possibly illegal for the other agent to do, but I don't care. I'm working for me and the listing agent needs to do what's best for his client (or for himself).
Use a listing agent will get you a better deal as long as you make a fair offer not some low-ball offer. It is a shame most investors want a good deal but more concerns about a listing agent getting both sides of the commission.
Dual agency- having both the buyer and seller represented by the same agent- I have often heard compared to going to court and having the same attorney represent both the plaintiff and the defendant.
If you are comfortable with that, or if that's what it takes to acquire an REO in your market, and you are okay with it, then by all means.
As an REO listing broker myself, I assign any interested buyers to a team of brokers that work with me, representing buyers only, on any REO I have listed.
In the Chicago area I know this is not an uncommon practice.
The key factor I see is there is a difference between a broker that sells regular, retail, or has a part time knowledge of distressed properties. Use a broker experienced with these types of assets.
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@Account Closed I was thinking the same thing. Was planning on a full price offer. Anything less on this one wouldn't have made it. Turns out it was under agreement in less then 3 days, which was 2 days before I tried.