Should I use my real estate agent?

Question

My real estate agent has been sending me listings for my first investment property. I haven't been interested in anything she has sent me, but I found an offer on Craigslist outside of town. It's for sale by owner, so do I contact my agent about it? Does the seller still pay the agent, even if they are not using one on their side?

Kelly Jackson · Answer

Success as an investor could depend on building relationships.  Contacting your Realtor before contacting the FSBO can mean the agent contacting you when he/she has that pocket listing that turns out to be a cash cow.

Steve Vaughan · Answer

I would first contact the owner and see the property.  Get a gauge for how set they are for or against an agent.  Most FSBOs who are willing to work with a buyer's agent will say so in their ad.

A good agent (especially if you are new and inexperienced) can be well worth the 3%.  A so-so agent that only asks you what you think is worth nothing.  What do you think I should offer?  I don't know, what do you want to offer?  No. You need someone who will pull comps and give you a recommendation.  You will probably be paying them out of your own pocket outright or with less room for price negotiations so make sure they are worth it @Chelsey Hamill!

Connie Bhimireddy · Answer

I was shocked when I became an agent here in WV (coming from NC where they're commonplace, and found out that although they teach buyers agreements in "Real Estate School" here, they are RARELY used -- if ever. So it's very unlikely they were working within one.

But what a fascinating story -- thanks for sharing it...sorry you had to go thru it.

Connie Bhimireddy · Answer

Being an agent myself, and an investor in NC, there is such wisdom in Kelly's original statement and in the future I'd advise taking her advice. My experience as an investor made me feel compelled to add the bold part! :) Know this as well, having an agent negotiating for you and moving the deal along, and protecting your interests, is priceless. Don't underestimate that relationship and what a Realtor can get done for you that you can't on your own.

I'm so curious how it turned out,... cuz you may very well have chosen to burn this bridge with that agent, if it was your first deal AND it would net you a LOT to reinvest, AND/OR you really NEED that 1-4k your agent would have saved.

Brian W. · Answer

In Texas, it comes down to whether you signed a buyer representation agreement with the agent, which states if you find a home (even FSBO) you will be on the hook for the commission unless the agent can convince the FSBO seller to give them the commission. This unfortunately happened to me with a friend years ago. I took them house hunting for months and they spotted a FSBO. When they realized I wouldn't get paid they stopped returning my calls. What's sad is that because they were my friends I would have settled for losing the commission to save the friendship, but they automatically assumed I would ask them to pay the whole fee. The FSBO seller got nervous when he heard I was their agent and wouldn't sell them the house until they talked to me. We ended up in a parking lot where they wrote me a check for $1,000 to drop any pursuit for a higher commission - I think the home was $300K at the time. The seller called me to verify I was cool, with everything, and I told them I was never trying to hunt them down, I just wanted to talk. I learned a lot from that situation about people and communication.

Connie Bhimireddy · Answer

Hi, I'm new here, but curious what ever happened with this!?

Mark Holencik · Answer

I do not use my agent on for sale by owner.

Any listing by an agent, I let my agent handle it.

Sarah Ziehr · Answer

I would use your broker to assist you. She can write up the contract in a way that your offer price includes a commission to be paid.

Karen Margrave · Answer

@Chelsey Hamill The question is, do you know enough about the market, values, contracts, etc. to do the deal without a real estate agent? If not, the agent can be well worth the price. As to commissions, most sellers are going to tack it on to the sales price.

Should I use my real estate agent?

Most Popular Reply