Am I wasting my agent's time?

OP

Investor · Dover, DE · Member since 2016 · 35 posts · 23 votes

10y

Originally posted by @Michael Noto:

Yes you are wasting the agents time. The fact that you are on a public forum asking that means you probably know you are as well.

The guy is going around for free with you and putting in low ball offers on your behalf and you are questioning whether he has your best interests in mind? What more does he have to do to show you he is on your side?

Do the realtor a favor and dump him. Sorry for being brutally honest but you think a listing agent is going to look out for your best interest? Laughable.

I appreciate the comments Michael.

The reason I'm on here asking is because I truly don't know. I have absolutely no experience in sales and don't really know what comes with the territory. I would have a difficult time putting in work hours based on a "hope it turns out". I started feeling as though I'm wasting his time, but wanted to get others' views on it. What I'm finding is this is just part of the game and if he thinks there is no potential value in it then he can ask me to go find someone else. I think you may have misunderstood comments about going to a listing agent. I don't really care about them having my interests in mind (of course they don't) because I know he/she has to submit whatever offer I put forth. The agent then doesn't have to split a commission and I won't be dragging around my agent and wasting his time.

I just figured having my best interests in mind isn't suggesting that I pay the same price for an old run down house as a completely remodeled and beautiful home down the street. I just thought comps worked differently, not based solely on square footage. I also didn't know you can comp a house based on the asking price of other homes for sale in the area. I've found that each agent I work with tries to get me to pay as much as possible for a home. For good reason I suppose. It makes it for a much better offer to get accepted as well as a higher commission rate. I've even been told by one agent that banks don't move on price anymore so I should just offer full price if I want the house. I figured a buyers agreement would fix all of this.

From everything I've gathered here, I'm just going to keep with my numbers and continue doing what I'm doing. I'll either get something accepted or he'll eventually ask me to find someone else.

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Account Closed

Real Estate Agent · Richardson, TX · Member since 2014 · 511 posts · 161 votes

10y

@Blaine Brown I've put a lot of offers through my agent last year. Here are a couple of suggestions that I think might be able to help you.

1. Make offers without seeing the property. Yeah, sounds scary but truth is, there are a lot of overpriced REO's out there. When you take into account all your time (and your agent's time) you're devoting to your search and then you find out the bank won't accept your offer, it is a bit discouraging and VERY time consuming. You will also have a lot more offers rejected than accepted.

2. Start offering lower than your MAX offer. This gives you more room for negotiation. If you start at your highest, it will be harder to close the deal.

3. Look for REO's that have been sitting on the market for 60-90+ days. If you're making lowball offers on properties that just hit the market, it is very unlikely your offer will be accepted.

4. Have the contracts ready. I normally have the whole purchase agreement ready and just send it to my agent. This way I don't take much of his time.

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Account Closed

Real Estate Agent · Richardson, TX · Member since 2014 · 511 posts · 161 votes

10y

@Blaine Brown You might be better off submitting offers directly to the listing agent and just explain your agent you feel you're wasting his time. The listing agent has the responsibility of showing all the offers to the seller regardless of the size of your offer.

You can also look at REO comps, although obviously it will be hard to come up with a value, it will give you some ball park number on how much investors pay for these properties.

I highly recommend you get your license. I recently got mine because I want to be able to see any property I want whenever I want without depending on the agent. Having a license will also help you cut on commissions which truly adds up and can make the difference between losing or making money on your first deal.

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Blaine Brown

OP

Investor · Dover, DE · Member since 2016 · 35 posts · 23 votes

10y

I like it Dan, thanks. I'll look into getting my license. I guess that's what an inspection contingency is for when you put an offer on a home you've never seen.

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Joe SplitrockPro Member

Moderator

Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes

10y

Originally posted by @Blaine Brown:

This is a three part question....Am I wasting my agent's time? Should I ask to enter a buyers agreement? Should I just approach the listing agent on my own? I have zero investing experience.

Background...After speaking with a loan officer she suggested an agent that has worked with investors. We went to look at a house I wanted to put an offer on. I put in an offer and the bank accepted someone else's offer three days later. Since then I've found other foreclosures and my agent has taken me to see them. I put in other offers and the bank comes back with counter offers that I'm not even close to willing to pay. I guess I don't feel like I'm lowballing since I'm offering the highest price where my numbers are working out.

If I keep this up (since I have no intentions of stopping), will my agent eventually just get tired of me wasting his time? He runs comps and tells me a price the house is probably worth, which in my opinion aren't fair comps because the houses I am looking at are in bad shape and cash only. Comparing that to a nicely put together home doesn't seem right. This is why I ask if I should enter a buyers agreement so I'm 100% sure he's looking out for my interests. I feeling like approaching the listing agent on my own would be more beneficial only because he/she will get the full commission.

Thanks for the thoughts,

Blaine

I am sure your agent will tell you if they feel you are wasting their time. In my experience there is lots of competition on foreclosures right now and finding deals on the MLS may take time. It does sound to me like you are lowballing, because your offers are not getting accepted. It appears other people are able to bid more and make the numbers work. That could be for several reasons. It could be you are expecting to make too much money after rehab and others are willing to take lower margin. It could be you are overestimating rehab costs or others can do it more efficiently. It could be that other people are overpaying. I think that is happening more today because there are less foreclosures and more people chasing them (supply and demand). All you can offer is the number that works for you.

Your agent is giving you comps showing you what the property would be worth if it was in prime condition. The cost to get it to prime condition is debatable. It seems you have a different opinion of rehab costs. I am not saying you are right or wrong and nobody can without looking at the properties.

I am not sure why you conclude he is not looking out for you? Sharing his opinion that comps show your offers are too low doesn't seem unreasonable. The fact that your offers are not getting accepted seems to support his statement. He cannot make the seller accept an offer that is lower than they deem market value. No realtor has the power to make a bad deal look good.

You may find if you wait and resubmit offers on properties that have not sold, they may accept it the second time around.

It may help to work with the selling agent on foreclosures because they may try to sell the bank on your offer. If you are choosing to do that, have the courtesy to part ways with your realtor and stop wasting his time.

Just something to consider. You say you have zero investing experience. I would recommend you have a buyers agent on your first few deals. The selling agent is far less likely to look out for your interests than the agent you currently have.

Overall I think you just need to be patient. This is not a buyers market so you will need to work harder or smarter to find a good deal.

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Adam SchneiderPro Member

Lender · Raleigh, NC · Member since 2012 · 955 posts · 639 votes

10y

Hi Blaine,

1. Have an upfront conversation with your broker about whether you two should be working together, how things should work, what each person's expectations are, and how the compensation will work. Give the broker an opportunity to fire you as a client if it doesn't make sense for the broker.

2. Determine whether you want to find the listings and then have the broker vet the deal, or you want the broker to find the listings and you vet the deal.

3. If you are missing out on offers, you either are not offering enough money, or your offer is poorly constructed. As an example, if you want too long of a due diligence period, aren't willing to provide much non-refundable money, don't have proof of funds, and are not closing quickly, you are not competitive. Usually, investors are going to be priced fairly close together because the information is all public....that's why I emphasize considering how you structure your offer.

4. Consider paying a local wholesaler an upfront fee to have first right of refusal on properties he/she is finding.

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Adam SchneiderPro Member

Lender · Raleigh, NC · Member since 2012 · 955 posts · 639 votes

10y

Blaine,

Re the loans, you should research what type of reno loan you qualify for before you keep placing offers. *** You may want to JV with someone who has money on your first deal so you can strike quickly.

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