Sellers Agent Not Relaying Information - Reach out Directly?

Question

Hi All,

I have recently put in a couple offers on a 5 unit multi-family in my local market (Metro Detroit) and I believe the agent is not discussing my offers with the seller.

Long story short - to get to the number the seller is asking I would need to work out a form of seller financing until I can get in there and complete the value add plays that need to be done to get the numbers I need on the refinance. The seller is an older gentlemen whom from what I've been told doesn't need the cash, but is just sick of dealing with the property and looking to move to Florida. To get a better idea of the seller profile, he tracks the financials with pen and paper only... old school as it gets. ha

I think if the seller was able to actually here my pitch, I would be able to make the sale. My fear is that he isn't hearing anything (or a very selective information) from the agent who is acting like a brick wall in the deal.

My question to you all - His address is listed on the public record.. would it be frowned upon to knock on his door and try to make a connection / sales pitch? any advice would be appreciated.

Thanks,

Brandon

Frank Wong · Answer

Brandon,

No offense but your offer sucks for the seller. He told you he doesn't want to do seller financing. He doesn't care what your proforma says. He wants his money and that's it. He's moving to Florida as you said. Do you think he still wants some risk back home as a mortgage note? Your 80% of list bank finance deal sucks too.

If the seller doesn't need to sell like you said he is having his agent who he hired to represent him and get what he is looking for.

Look it doesn't matter what you think the listing agent is doing or not. If your offer was good enough for the seller you would be in the contract. It's not so the listing agent is trying to find a better offer, if he finds the buyer who cares. He is doing his job by getting the best offer for his client the seller.

Russell Brazil · Answer

Two words to consider when trying to bypass someone a seller has hired to represent them, whether an agent, a lawyer whoever....

tortious interference.

Brandon Stone · Answer

@Russell Brazil lesson learned - thanks for pointing that out.

@Frank Wong @Michael Tripp This is the point of this forum after all right?... to learn, help each other out, and vet dumb ideas before learning them the hard way. Dumb idea averted.

Brandon Stone · Answer

@Frank Wong thanks for the hard truth - probably what I needed to hear. When I listen to the BP podcast I have heard time and time again from other successful real estate investors to not let rejection get in the way followed examples of how people have gone above and beyond to achieve what they are looking for. Apparently this is not one of those situations. Itching to get a mutli family deal done and being relatively new to the market space - tunnel vision is hard to avoid.

@Michael T. thanks for the advice. I'll take a breather and with any luck an opportunity will present itself again. ha

@Michael Tripp thanks for the advice. I'll take a breather and with any luck an opportunity will present itself again. ha

Michael T. · Answer

@Brandon Stone listen to @Frank Wong his answer is very accurate.

Typically a seller and the listing agent will discuss what he/she will and won't consider at the start of the listing. If the listing agent is replying back with these responses then he's doing it on behalf of his client.

Give it time and if the property has been on the market for a few months then go back and have a phone conversation with the listing agent and see if he'll present your offer again.

If you continue to submit offers the way you are currently doing it, the listing agent will communicate this to the seller and ultimately the seller will let the listing agent know to not even present any future offers from the buyer Brandon Stone.

Michael Noto · Answer

@Brandon Stone If the seller wants to cash out the seller financing option goes out the window. I know that sounds basic, but it kind of is what it is. The seller likely told the agent in advance he does not want to consider any owner financed offers which is why they responded so quickly.

Frank Wong · Answer

@Brandon Stone

Yes Exactly! I am happy you got what we were trying to tell you. Live and learn. Just wait and see at this time. He is an older gentleman and sometimes they take longer. If they have no success in getting a higher offer, your offer will look better. Sometimes you just have to wait. I have closed many deals for clients in the same manner.

Seller didn't want to budge then 3 weeks later we make a deal.

Brandon Stone · Answer

Only a day. ha

I sent three offers over:

a) full listing price (well now $10k above listing price, he just dropped the price on MLS) with seller financing terms of 10% down, principal only, monthly payments a little less than what I think he is cash flowing on it now (he owns the building free and clear), and a 3 year balloon

b) 90% of listing price on seller financing terms of 10% down, 6% interest, same monthly payment, 5 year balloon.

c) bank financing - 80% list price

What bugs me is that the response was immediate and short saying "no seller financing, and a countered with 2% reduction in price. I then went a step further to send him the pro forma I put together that clearly states some of observations I've made that I don't think he is considering and included a personal message inside the pro forma, asking that he could pass it on for the seller to see... within a few minutes he responded with a short "No - Our Counter Stands."

This makes me think hes acting as the "brick wall" between the seller and I and not being transparent, there is no way he could have relayed the information that quickly.

Its been on the market for months and all they have received is low ball offers because all the investors are figuring out that the NOI number that he puts in the listing is way overstated. I offer a price over listing and a bank financing price that is most likely better than any other offer he receives and he doesn't even entertain the idea?

Maybe I'm biased but it feels like he is protecting his own interest by trying to find the buyer himself so he can double dip on the commissions (acting against the code of ethics right?) .. but again, I'm in the deal so it's hard to think objectively.

Kelly N. · Answer

How long have you been kept waiting, and what was your offer like?

Sellers Agent Not Relaying Information - Reach out Directly?

Sellers Agent Not Relaying Information - Reach out Directly?

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