Dealing with Acquisition companies

3 Replies

During my education and experience flipping homes Brandon has taught me that I must develop my funnel to acquire good deals on properties.  I have run into a company name New Western Acquisitions.  They want to sell me properties but they say they don't represent me?  I do not seem to understand how their business works? How they make money?  Also I have found that I seem to be competing with them and have been out bid by them a couple of times.  Can someone please tell me what I'm dealing with?

Disclosure:  I work with the mentioned company (New Western Acquisitions).

Hi there Elizabeth!  In response to your inquiry on why an acquisitions company has purchasers sign a non representation notice, it is simply to limit any potential obligation to the buyer.  The buyer has no duty to work only with that agent, and can purchase any property that is presented to them at any time.  

The benefit for the acquisitions company is to limit the liability when disposing of the asset.  Since the company has never occupied the property, they have little to no knowledge on the property condition aside from visual inspection, or a handed down SDN.  Becuase of that, the agents of these type of companies limit their responsibility to dealing honestly and fairly, disclosing all known facts (typically none), and accounting for funds.  

I hope this helps.

OK I understand that they do not represent me and can present many properties. But I need to know why I am paying them 400.00. Is it just for their service of finding the property? All the properties they show me are on the MLS? I can just bid on them myself... can you explain how it benefits me to work with them?

Below is a response to @Elizabeth Matos from a private message regarding this topic.  It goes further into detail about her question.  She was kind enough to allow me to post here to the public.  Thanks Elizabeth! 

"Thanks for the colleague request. In response to the service provided, essentially what an acquisitions team offers to its investors is countless man hours. Each acquisitions associate (6-8 in the LA office if I had to guess) puts in about 55 hours a week looking for deals. Each agent scans over approximately 100 addresses per day, of which 5 (on average) are actually worth walking through. Out of those, maybe one becomes something that is worth picking up to offer to investors. So, if you do the math, Each agent looks at about 600 addresses a week, or 18,000 a month, and cherry picks the best 5-6 deals... multiplied by the number of agents per office... The service provided by a team like New Western is quite extensive when you look at the amount of work that is put into providing "ready to go" deals that require a simple yes or no, rather than multiple offers or bidding blindly with a distant listing agent...."

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