Flipper · Mobile, AL · Member since 2016 · 45 posts · 9 votes
Hello everyone!
Does anyone share the PDF reports from the rental property calculator with their realtor? Can the analysis report be used as a tool to assist with making offers on properties? Can this be a visual aid in communicating to your realtor what you are willing to pay for a property or is it not a good idea to tell your realtor what your max budget or bottom line offer is prior to submitting the initial offer to the seller?
Ash Lynn I'd share anything with my realtor (read: buyer's agent). You should want their opinion on your offer price. You should want them to know where your "easy yes", "let me think about it", and "heck no!" thresholds stand. Others might disagree but if I get a counter at my "easy yes" number I want her to say "DONE!", I want those Docusign emails in my inbox inside of an hour, and I want her scheduling the inspection inside of a week. For me, empowering my agent has been useful. Your mileage may vary.
Wow great perspective and I do appreciate your insight. I am working to find my first deal and feel like I'm over thinking some things and under thinking other things. I do think that I want my realtor to know how much I'm willing to pay for a property and why as negotiating a deal would be more efficient and she would be a second eye to assess my numbers (being that she does work with investors). Thanks a bunch
@Chris Mason I haven't worked with her long but she was a referral from a trusted source and she seems to be very good agent so far. I just didn't know if there was a down side to disclosing that info inform or not. I've heard other investors mention that they don't disclose their bottom line upfront because the realtor may try to talk them into placing the higher offer. Thank u!!
@Chris Mason I haven't worked with her long but she was a referral from a trusted source and she seems to be very good agent so far. I just didn't know if there was a down side to disclosing that info inform or not. I've heard other investors mention that they don't disclose their bottom line upfront because the realtor may try to talk them into placing the higher offer. Thank u!!
A good agent will balance "we risk losing the house if we offer too low" against "we don't want to leave money on the table."
People are often concerned that the agent is trying to bump the price $10k for a larger commission check, but let's do some math.
Standard buyer's agent commission, 3%.
Broker's cut, 25%.
Taxes, 40%.
$10k * 3% * 75% * 60% = $135.
By contrast, taking care of your client and getting a friend/family/etc referral might get you a $500k deal.
$500k * 3% * 75% * 60% = $6750.
If you were selling real estate, would you chase the $135, or the $6750? I'm not an agent, but I know what kind of agent I would be if I were! :)
You'd have to drop the 3% above, and use 2.5% if in some of the higher cost of living areas like the Bay Area btw. Market conditions in Mobile Alabama are completely unknown to me, maybe it's 3.5% for all I know.
Well the mathematical breakdown was really helpful! In Mobile to my understanding agents make about 6% commission. I'm sure that's not all agents. I am glad that I posed this question. I am going to use the reports as a tool when working with my agent. Love this stuff!! @Chris Mason
Ash Lynn I am an agent and admittedly skeptical of most people. I would be concerned if the agent was the person you called from the sign in the yard therefore the sellers agent but if the agent is someone you have personally been working with then I probably wouldn't sweat it too much and just share the information. It may cause me to pause if the agent who has the property listed works under same broker/for same Realty Company as my agent. However, a good ethical agent is not going to risk losing your business and your possible referral for a few bucks. Good luck and Happy Investing!
I've found it helpful to share evaluations with my realtor. I still consider myself fairly new at this so it's been good to get a professional's opinion on some of my assumptions. BiggerPockets gave me a great starting point for the values but local costs can vary quite a bit off of what people are seeing nationally.
@Ash Lynn I would not share my bottom line numbers with my agent. In order to "sell" your offer, they need to believe it is your bottom line. If they know you can go lower, they could accidentally indicate this to the sellers agent. I would down play anything good about the property and up play any negatives. As far as sharing reports or numbers, only do that if they support your cause of a lower price. You could calculate two versions of the numbers, one very conservative to share with your agent and one optimistic for your own eyes. The point is to make sure your agent is convinced your offer is fair, that way they can do a better job selling it.
@Joe Splitrock that is a good strategy and your rationale makes sense as well. My second thought and reason for posing this question was because I wasn't sure if it's a good strategy for the agent to know your bottom line. Taking from everyone's input, I can take away that it depends on your agent, how well the agent understand your goals, how trustworthy they are, and how well both people work together. Thank u from a newbie with plenty of questions!!
If you are working with somebody who is trustworthy and who is good at what they do, you should share everything.
Since the agent was a referral, it is okay to share.
They work for you and with you.
As a realtor, it does't change my perspective, you want to create a long term relationship, I don't want to lose somebody over couple hundred bucks, I don't know who would.
I want to know as much as I can about my customers goals. The most often touted is price.... price... price and while important it is far all the be all end all. Sometimes it is they want a zero turn mower thrown in, they want a credit on a roof replace, they want a certain cash flow, they want a certain school district or a certain distance to a bus line. Sometimes the seller wants it sold in a specific time frame to cover a large expense or before tax time, they want a buyer with no inspection, they want cash only. Knowing what motivates my client helps me to push things their way and go for their goals. It's also real good to know what does not matter (tactic: Start over something your client couldn't care less about just to give it up for something they do)
@Marvin S. I like the upfront model. I am actually having difficulty finding a realtor that is dependable/reliable. I do plan to discuss my goals, and be more upfront with the next realtor that I choose to work with. Thank you for advice!!!!
If you have to create multiple reports to "convince" your agent on your price, that means there is no trust. If I were to run numbers and show those exact numbers, it shouldn't matter whether my agent agrees or not. They are not the ones buying the property. I am. Their job is to take my justifications to present to the seller why I am willing to offer a certain amount.
I just recently started working with my agent but I trust her and she hasn't done anything to lose that trust. I had concerns on certain things on a recent offer/property and when I brought them up, she had already seen that it would be a red flag for me and took care of it already. That's because she understands my goals and intent and is able act accordingly in my best interest.
The second you have to start hiding things and deceiving your OWN agent, is probably time you should start looking for another agent you can trust or evaluate if you are being paranoid.