Realtor Charging for Comps?
Most Popular Reply
Originally posted by Henry M.:
Two words: Dump her. She is not an expert in dealing with investors.
I completely disagree.
The fact that she refuses to pull comps for some random guy who has never bought a property through her and who is going to use those comps on wholesale deals where the agent has 0% chance of earning any commission, tells me that this agent has done this before and realizes that most investors are tire kickers and will do nothing more than waste her time.
Like I said above, once she makes some money off him (i.e., he proves he's not a tire kicker), then things change. U
Henry - Will you come wash my car for me for free if I promise to help you some money later? That's basically what Derek is asking...
83 Replies
- Lyndhurst, NJ · Member since 2012 · 1 post · 0 votes13y
No, agents work on commision. Unfortunately for her she is not involved in your wholesale deals so she's looking to charge you for the comp services.
- Cincinnati, OH · Member since 2012 · 25 posts · 9 votes13y
Find another agent. It doesn't take much time or effort to run good comps. You have a lot consider though. It might be worth it for the access to the mls. If you like the value the realtor is going to provide you, then go for it, BUT maybe negotiate with her. Realtors have a lot of fees(MLS, SUPRA KEY,dues, education, insurance, not to mention marketing, ETC.)so maybe offer to pay her mls fees in exchange for adding you as a personal assistant. Then run your own comps.It really just depends on your situation and what you're comfortable doing.
Once you have proven to the agent that you will be helping her generate a steady income stream by representing you on deals, I would think that she should be willing to "help you out" by running comps for you, giving you MLS access (if that's legal in your area), etc.
But, until you prove to her that she's going to make money off you, she doesn't know for certain whether you're a tire-kicker or a serious buyer, and it's not unreasonable that she'll want to ensure that she gets paid for any time that she spends helping you when there is no chance she'll get paid.
- 13ySteven Hamilton IIPro MemberAccountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
Derek Tyler,
J Scott said it perfectly. She doesn't know whether you are serious or not. I cannot blame her for charging you for her time. This is especially true when you just said you are submitting low offers.
Would you work for free? Her time is work something. I see and hear it all the time how agents are treated. Many of them do much more than you realize.
Frankly,
I'm shocked she is handing you MLS access. I know here that isn't legal(if it is in your area that is great). Frankly the simple autosearches work perfect for most of the things you are looking for.
-Steven the Tax Guy
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes13y
I can never understand why potential investors think that broker/agents like to work for free.
It's like these asset management companies for REO's when they were hot would tell brokers/agents do so many BPO's for us for FREE and you might get a listing down the road.
Many times the broker/agents did free bpo's that cost normally 50 to 85 dollars a pop.
Pulling comps is one thing but if you want repairs,adjustments,etc. then that is more like a BPO than a CMA and it is closer to an appraisal.
We use to tell the asset REO mills that they can pay upfront for the BPO and IF and WHEN a listing is given and it closes the agent would give a credit off of the bpo's paid for.
You could do the same with this broker/agent in paying for bpo's.Example you pay 50 per order and when a property closes you get a rebate off the commission back if legal in your state.
This way both parties get compensated for their time.For what you are doing it's only fair.
I do heavy analysis for my clients on the commercial end as a service on purchases but I am transacting multimillion dollar deals so it is worth my time without the fees.
Just like an investor this broker/agent is valuing the time they have to generate income.It especially makes sense on little houses (smaller deals) to charge a fee for service.
- Cincinnati, OH · Member since 2012 · 25 posts · 9 votes13y
J is absolutely right. A realtor doesn't want to waste time on someone if they're not going to see a return. She's going to naturally want to see what value you provide. I would bet money that after you work a couple deals with her she won't have a problem pulling comps for free.
- 13yDerek T.Real Estate Investor · Prince Geroge's County, MD · Member since 2012 · 392 posts · 104 votesOP
Thanks for the reply. Based on all of the other things that she would be willing to do, I think it would be a good fit however the current agent doesn't charge for for comps and the other investors that I speak with don't get charged for getting comps either so I was a little surprised by it (however I am sure they have relationships already). When I spoke to an investor earlier, his advice was to find another one is she is going to charge for this. I don't have a problem paying for the service if we are going to have a good working business relationship but it was something that I didn't expect to hear.
As far as gaining access, this would be amazing and it is legal in my area as far as I know. It was something that I researched and asked her about. She said she would be willing as our relationship grew but of course not in day 1 of meeting each other. The personal assistant access has some limitations but I don't think it would affect anything I would want to do which is get listings, data, etc. I provided the link for the service I am describing here in my area. http://www.mris.com/mris-customers/subscribe-to-mris/subscriber-faqs/
Originally posted by Derek Tyler:
Has anyone else come across their buyer's agent charging for comps for wholesale deals?Derek,
Two words: Dump her. She is not an expert in dealing with investors. Her charging to do comps proves that. You stated you already have a buyer's agent so you need to make sure (if you signed an agreement with him ) to read the terms in the contract you have and honor that agreement.
If not, find yourself multiple experienced agents who specialize in what you seek and are familiar with the areas you are searching. They will know immediately what the comps are in each specific area.
Let's say you are searching for a home in the South-side of town in a specific subdivision or neighborhood. Drive that area and see what Realtors dominate the area with their signs... Ask each of them what you are seeking and your intentions. Hopefully you have a lender, or your own capital, or OPM in general with the ability to show POF. Once you feel comfortable with those agents you are interviewing then you can share your POF and they will know your capacity and ability of taking down any potential deal you seek. If you don't have POF, then make sure you have a pretty damn good plan to share your vision.
If someone is nickel and diming you, dump them. They are not serious agents. Real agents see the big picture and are like you. Also they are selling and/or helping buyers buy properties. They too are in it for the commission. Once you find a property and you purchase it reward the Realtor with their commission (via EMC to title company) and if you rehab it and plan on selling it, let them find you a buyer and reward them with either the listing (short term) and/or commission. This is how it is done across the board. If you were a bank and had deep pockets then the BPO charge makes sense... Otherwise, you have an agent taking advantage of you, period.
Anyone who tries to defend this act is either a Realtor themselves or doesn't comprehend the true business of Real Estate from an investor's stand point, especially someone who is starting out and/green.
Save your money for gas, marketing, education, lunches, meetings, etc...
One last thing, any Realtor who believes if they show you three houses and you need to choose one to purchase also needs to be dumped. Let's go a step further, sometimes as an investor you may go through dozens of properties in areas that you will eventually (hopefully) become familiar with and Derek there is no problem with you working while investing however, you need to make it a passion. Once you do, you will be a CMA machine and once you see an address or zip code or neighborhood/subdivision you will know quickly what the market value is in those areas. But you have to do your due diligence. Don't always depend on others to give you the info you seek and even if they give you info (i.e. CMA), make sure you verify the numbers. Double check. Get a second opinion until you become independent and educated in those areas.
What I personally did was when I felt I had a Realtor that I liked who was competent and open minded then I would befriend them, treat them out to lunch, brainstorm w/them on strategies, discuss real estate in general, drive to look at props in my vehicle, etc... I did this frequently with a handful of agents and guess what? Once we trusted each other and built that relationship, whenever I called - they were accessible. Once we closed a deal, they were loyal and invested in my vision.
Make a plan of what you want to do and your intentions. Refine it, define it, and go after it.
Good luck and don't be a sucker,
Big Henry
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes13y
I used to do BPO's years ago.I completed thousands of them over the years.
A BPO is not a CMA. A BPO from a mill is much closer to a full blown appraisal these days.
If you are asking the agent to look up a few solds,actives,and expired's and print out a one page form from the MLS then that does not take much time.
If you are wanting an interior evaluation with repair estimates and making adjustments for variations in comps to arrive at a more accurate number doing as-is versus arv analysis then that is more like a BPO.
In that case the agent should be compensated.
Originally posted by Joel Owens:
I used to do BPO's years ago.I completed thousands of them over the years.A BPO is not a CMA. A BPO from a mill is much closer to a full blown appraisal these days.
If you are asking the agent to look up a few solds,actives,and expired's and print out a one page form from the MLS then that does not take much time.
If you are wanting an interior evaluation with repair estimates and making adjustments for variations in comps to arrive at a more accurate number doing as-is versus arv analysis then that is more like a BPO.
In that case the agent should be compensated.
I agree with your rationale, however I do believe Derek stated he wanted/needed comps on potential deals... Most investors will not ask for BPOs... But in the case that any investor does, then I would agree with you as it is more intensive and Realtors should be compensated. However, not for CMAs as you alluded to and if this agent continues with her nickle and dime strategy then Derek can look elsewhere.
I am sure you would agree.
Big Henry
- Mobile Home Investor · Spanaway, WA · Member since 2008 · 1k+ posts · 578 votes13y
Check around for someone else to work with - only the greedy agents charge fees on top of their commissions. They are the same ones who attend the mandatory continuing education classes and feel they are so important that they do not have to turn their cell phone on silent or off. In the middle of the presentation their phone goes off and most do not even have the common courtesy of going out of the room to talk. They sit in the middle of the classroom talking away like they are in their own little world and nobody else matters.
- 13yDerek T.Real Estate Investor · Prince Geroge's County, MD · Member since 2012 · 392 posts · 104 votesOP
Okay my thought process now is this.......should I pay for something (comps) that I feel as though I shouldn't have to pay in order to foster the relationship which could help me gain access to the mls which is invaluable.
Hopefully I can get to the point where I know comps for various areas however at this point is there a way to realistically get them except from a realtor? I cant rely on zillow, redfin, etc. Would the next best solution be to pull data from my department of taxation and assesstment and study recent sales in various neighborhoods to get an idea? And if that is the case how can I determine investor buys as opposed to retail buys because the recorded transactions can be so different as far as price range is concerned. Or should I research listings for various neighborhoods to get familiar with values (but even if I research listings properties are always sold at these prices). It just seems hard to get accurate comps without having MLS access.
- 13yDerek T.Real Estate Investor · Prince Geroge's County, MD · Member since 2012 · 392 posts · 104 votesOP
And I failed to mention but the other agent who is further away and can only provide buyer's agent services to me provides comps free on every house we see. Although the closer realtor may offer more services I am not sure if it is worth the few extra fees unless I can get mls access. And Henry as you mentioned there is no buyers agreement put in place and I have a POF as I am currently looking at houses. Maybe both realtors arent a good fit and maybe I should look else where.
Originally posted by Henry M.:
Two words: Dump her. She is not an expert in dealing with investors.I completely disagree.
The fact that she refuses to pull comps for some random guy who has never bought a property through her and who is going to use those comps on wholesale deals where the agent has 0% chance of earning any commission, tells me that this agent has done this before and realizes that most investors are tire kickers and will do nothing more than waste her time.
Like I said above, once she makes some money off him (i.e., he proves he's not a tire kicker), then things change. U
Henry - Will you come wash my car for me for free if I promise to help you some money later? That's basically what Derek is asking...
- Midland , TX · Member since 2012 · 24 posts · 1 vote13y
Find another agent. I have been using the same agent for the past 7 years and she has never charged me for comps. I also treat my agent like family and she is a very important part of my "team".
- 13yDerek T.Real Estate Investor · Prince Geroge's County, MD · Member since 2012 · 392 posts · 104 votesOP
J Scott she would make money as a listing agent on the wholesaled deal. My thing is I don't want to throw $50 at every house I look at to see if the numbers work. I have gone out and seen 20 or so houses and if I were to pay $50 each time that would have been $1000 out of pocket just to run numbers on deals. Luckily the agent I went with already ran comps so I didn't run into this situation. But if I have to pay every time I run numbers this can be thousands of dollars until I learn how to evaluate them myself. See my above post.....what other ways are most effective for obtaining comps?
- Involved In Real Estate · Columbus , OH · Member since 2010 · 68 posts · 23 votes13y
Loyalty works two ways. Only you know your intentions. Most “investors” look at dozens of houses, pull reams of comps and then never actually pull the trigger. When a Realtor thinks investor they all have images of some guy that just watched a Carlton Sheets video and is now an expert. I think the idea that Joel Owen had is great. Tell the Realtor that you will pay the $50. to pull comps but it needs to be refunded when you close on a property. Unless you don’t think you will ever close on a property with her. In which case she is reading you correctly.
- 13yDerek T.Real Estate Investor · Prince Geroge's County, MD · Member since 2012 · 392 posts · 104 votesOP
Thanks Shannon for the post. I doubt she takes me as completely green investor who just watched a video and is now trying to do this. This will be my first time investing in this area and with the business-like approach that I am taking now but I have 2 rentals, some raw land and my primary house all of which I acquired in "helping family deals" in the Richmond, VA area (excluding my primary residence). She is aware of my portfolio, the equity in the two rentals and the cash reserves that I have in place so I don't she sees me as a true newbie but more as someone that is new to the moderate to extensive rehab business and new to investments in this area. I think this may be a feeling out period between us since we haven't worked with each other.
With your suggestion would you recommend asking for all of the comps fees back once I get one house under contract or just that one comp fee. If I pay $3000 out in comps fees and get one house that would still be a loss of $2950 and would be another expense I would have to include in my buying costs that I wasnt planning on in addition to lender fees, appraisal, etc. ( this may be an extreme example but you get my point). However if I obtain mls access I think as the comp fee initially would be worth it.
- Involved In Real Estate · Columbus , OH · Member since 2010 · 68 posts · 23 votes13y
Derek, I would say all of the fees should be refunded. I say that because really, pulling comps is part of a Realtors job in helping you locate and purchase a property. However, I can see her point in charging for that work if she does not know and trust you as an investor yet.
If I were an agent it would also make a difference to me if you had put some due diligence into the property.
60 different sets of comps sounds like a lot to me. Unless you are looking at a very wide range of properties I think you will instinctively know the fair value of a property before you have pulled comps on 60 properties.Just my .02
- Residential Real Estate Agent · Ocala, FL · Member since 2009 · 255 posts · 65 votes13y
Penny wise pound foolish.
- Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes13y
Derek, if you asked me to continually run comps. on properties you're going to wholesale, that would imply there is no potential commission for me to earn. But, then I see you plan on "listing" your wholesale deals? I see a lot of wholesalers, normally trying a quick flip, double close, assignment, etc. and wholesalers don't normally "list" their properties. Clarify please.
Originally posted by Derek Tyler:
Thanks Shannon for the post. I doubt she takes me as completely green investor who just watched a video and is now trying to do this. This will be my first time investing in this area and with the business-like approach that I am taking now but I have 2 rentals, some raw land and my primary house all of which I acquired in "helping family deals" in the Richmond, VA area (excluding my primary residence). She is aware of my portfolio, the equity in the two rentals and the cash reserves that I have in place so I don't she sees me as a true newbie but more as someone that is new to the moderate to extensive rehab business and new to investments in this area. I think this may be a feeling out period between us since we haven't worked with each other.With your suggestion would you recommend asking for all of the comps fees back once I get one house under contract or just that one comp fee. If I pay $3000 out in comps fees and get one house that would still be a loss of $2950 and would be another expense I would have to include in my buying costs that I wasnt planning on in addition to lender fees, appraisal, etc. ( this may be an extreme example but you get my point). However if I obtain mls access I think as the comp fee initially would be worth it.
In your example, $3000 in "comp fees" would be sixty homes - that isn't a "minor" use of the agent's time. I haven't heard a clear explanation yet of what the "comp fee" would cover? Do you just want the previous years sales in that neighborhood? Do you want someone to go look at the property & give you a "street value"? Estimated repair costs? Estimated rents based on recent comps? I wouldn't buy anything without *all* of that data, and running it all at the drop of a hat is going to take a significant amount of time.
I think you may not like the best solution- invest the time and the money to get your own re license. In my state, that's about 100 hours of night/weekend classes, and a couple thousand in fees for MLS access, an e-key, and broker desk fees. Once you have your own license, my MLS has free classes that will teach you how to pull your own data. With an agents license & an e-key, you can look at as many houses as you want, write your own offers & even collect the agents commissions on your own deals.
If this is a "real" business for you, treat it like one.
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes13y
Giving a PROMISE of money down the road for a bunch of FREE stuff today to a broker/agent is a very quick way for a broker/agent to go out of business.
This is the same as a seller saying cut me a deal (commission) on selling my house and we will buy through you and then they use another buyers agent on their purchase.
If you want to be a success in real estate as a broker/agent you have to value your time or you will go out of business.
It seems if that MLS assistant status is allowed in your state then that might be the solution.Then you can spend your time running all kinds of comps you want at YOUR TIME and EXPENSE.
As I have said on other posts before.If it is your own cash and you have a recent bank statement then you are a cash purchaser.If you are using private money,hard money,or transactional funding then your money is tied into certain CONDITIONS to be met to get that money to close the deal.
Anytime there is someone else's money involved that the purchasers there is many more things that can derail a deal and it never closes.
Some deals do close but statistically the odds are not in the broker/agents favor.
Making money as a broker/agent and smart investment decisions with your time just like an investor does with doing deals is what makes a broker/agent last and become very profitable long term.
Wholesalers to me I don't classify as purchasers or investors.Many times they are trying to use OPM to collect a fee as a middleman.Nothing wrong with that except when they try to act like a regular purchaser.That's where the rub comes in for many in the industry.
Just be real in what you want to do and if the seller doesn't want to do that do not try to manipulate them stating you are something you are not to try and lock up a deal and collect a fee.
Originally posted by J Scott:
Like I said above, once she makes some money off him (i.e., he proves he's not a tire kicker), then things change. UHenry - Will you come wash my car for me for free if I promise to help you some money later? That's basically what Derek is asking...
J Scott, I truly thought we had something special going on here. Truly I was beginning to like you.
In all seriousness, I believe someone who buys there own staging furniture will most likely not be an advocate on an action he wouldn't do himself.
Have you ever paid for CMA's?
Would you ever pay for CMA's?
So are you saying Derek has to pay for CMA's to prove he is not a tire kicker?
Also this notion that there is no money for a Realtor in dealing with wholesale properties is a myth... Let me go a step further, if you are a listing agent and the owner you represent has an existing note with very little equity eventually selling the home with no equity, does the agent receive a commission?
Real Estate is about timing, opportunity, and due diligence. When it comes to both investors and agents, we are all in it for the money. With that said, keep in mind, Derek states, "She is aware of my portfolio, the equity in the two rentals and the cash reserves that I have in place so I don't (think/believe/feel) she sees me as a true newbie..." - So what is her rationale then if she has evidence that this is not Derek's first rodeo to charge knowing he is not new to real estate? Greed?
Yes, Derek can get a license and maybe that is a good idea in some respects, but the MLS is not all it is cracked up to be. Is it a useful engine. Yes but it doesn't define real estate. Homes are not only sold through an agent/mls.
Bottom line, there are just way too many agents that would line up with Derek and do CMA's for him. If I am an agent, I would run the CMAs because in essence doing so is also an education for me considering this too is my field of business.
Lastly, J Scott, what kind of car do you drive? And Joel, stop flip flopping, you are worse than the both presidential candidates.
If there is anyone (i.e. Shannon) here willing to pay me $50 per comp/per deal, let me know I am available? LOL!!!
Big Henry
- Involved In Real Estate · Columbus , OH · Member since 2010 · 68 posts · 23 votes13y
[quote=If there is anyone (i.e. Shannon) here willing to pay me $50 per comp/per deal, let me know I am available? LOL!!!
Big HenryNope, I don’t pay for comps. :) There is a difference though.
I have a Realtor that I work with. I bought 8 properties in the last 12 months. She is glad to pull comps for me. I wish Derek the best of success in real estate. I have no reason to believe he will not go far. However, this agent has no information to go on that he will ever buy. The clues are that he is dumping another agent without having bought from them and is planning on looking at comps on many properties. Would you pull comps for free based on that information? Would you pull comps for any wholesaler?Don’t get me wrong you can always find an agent that will be glad to do whatever they are told just to be busy and pretending to be working with a “client” but is that the type of agent an investor should really be forming a relationship with?
Again, Derek, please don’t think I am insulting you in any way. This has turned into a bigger more general discussion than the one you started.
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