Realtor Charging for Comps?
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Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
13yOriginally 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
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes13y
Derek this can go on forever with a debate.
Wholesalers get up in arms when they are not classified as investors with cash like a buy and hold investor.
Check into the assistant thing as that sounds like really your answer in this situation.
I wish you nothing but the best of success as I do all here on Bigger Pockets.
- SFR Investor · Phoenix, AZ · Member since 2009 · 484 posts · 181 votes13y
Originally posted by Henry M.:
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
What he's asked for is (effectively) the moon and the stars on a silver platter - MLS access for an "assistant" who isn't an agent, and isn't doing the agent's business is at best a perversion of the rules.
Writing scads of low offers is a time-consuming process if those offers are done properly (are we going to bust the agent's chops if they "forget" to check a box that ends up costing the buyer $2k? - it's super easy to do if you're shotgunning offers... )... .
Showing tons of properties is a time consuming process as well.
Researching deals *properly* and thoroughly takes time, and doing it for properties where the chance of a comission is 0% - well, that's just foolish, unless the investor pulling the strings has some coin, and two properties *doesn't* make you a Trump.
There *are* tons of agents with 0 skills & no judgement that would gladly be your toy for a few weeks/months. Then, they won't return your calls.
- Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes13y
I usually don't read all threads, LOL, lots said too! You can always work something out as it's not fair to tie your Realtor up sitting at the computer pulling comps for you.
But $50? LOL, Find another Realtor!
Give 10 Realtors a detailed list of what you are looking for, tell them to submit what they find as a good deal with comps. Sign nothing with any of them until you find a deal, then use that Realtor.
$50.00 LOL, sounds like a business in itself for out-of-towners!
- Real Estate Agent · Hackettstown, NJ · Member since 2011 · 206 posts · 62 votes13y
Henry M.
Not sure the question is who will pay you, but will you run 60 comps for someone for a commission on a $xx,000 deal? What is that like $2,000 - $3,000?
Plus I thought he was wholesaling the deal, not fixing-n-flipping?
- Specialist · San Antonio, TX · Member since 2012 · 462 posts · 294 votes13y
Originally posted by Shannon M.:
Nope, I don’t pay for comps. :)WOW Shannon... So you don't pay for CMAs, yet you advise Derek to do so... I am very disappointed in you.
I think this is my ultimate point with most of the comments (not all) - that to condone a nickle and dime charge yet not be willing to pay for that charge anytime in your career shows me that is more of a disservice to someone like Derek.
In other words, hypocritical to say the least.
And your in your last post Shannon, "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." - This is again my point, you didn't pay for CMAs, however with time you showed you were an investor worth investing time in, correct? And because of that you can call her at will and retrieve CMAs.Hmm sounds familiar... Oh I said that too.
I still like you Shannon, just try and be consistent [;{)
Big Henry
- Specialist · San Antonio, TX · Member since 2012 · 462 posts · 294 votes13y
Originally posted by Keith Lutz:
Henry M.Not sure the question is who will pay you, but will you run 60 comps for someone for a commission on a $xx,000 deal? What is that like $2,000 - $3,000?
Plus I thought he was wholesaling the deal, not fixing-n-flipping?
Okay, so let's take this one step at a time. If you are an agent and have access to the MLS, how long does it truly take to run CMAs?
Honestly, it should take no more than 15-25 minutes to run a Grid, Zip, SubD, and area CMA maybe even a wedge if comps are hard to find... But with the MLS, you can narrow down an average price per square foot, etc for similar props (and I know there is more to CMAs - it is just to shorten my answer).
Also if Derek in fact has several properties and cash reserves then he sounds like a likely candidate to be a repeat customer.
Lastly, who says there is no money in wholesale for an agent. Even in a short-sale situation an agent will be paid by a bank (and yes I know there are designated agents for the banks, etc.)...
Also this comment is for Shannon, he is not dumping his OG agent as he stated he never signed an agreement. Also he explained that the OG agent lived 50 miles away, so convenience and accessibility was an issue, hence the reason Derek was seeking a local agent. Unfortunately, one who will nickel and dime him even after showing the capacity to purchase an investment prop for wholesale/flip...
Big Henry
- 13yDerek T.Real Estate Investor · Prince Geroge's County, MD · Member since 2012 · 392 posts · 104 votesOP
Wayne I am not sure how the post read however the deal would be wholesaled to me as I would rehab the house and list it wih her. I am not interested in wholesaling deals, my exit strategies are hold, flip, lease options depending on the deal.
- 13yDerek T.Real Estate Investor · Prince Geroge's County, MD · Member since 2012 · 392 posts · 104 votesOP
Thanks Mark I plan to get my license and/or have my wife do it however that does not help me today. I would be looking for street value on flip deals and street value/rental assessments on hold deals.
Also I didn't mean to start a big debate but the different view points are very interesting. I was expecting a common opinion on the fee but it is clear there are various sides to the argument. I will digress as I talked to her today and she was willing to run the comp with no fee as I explained to her I am not looking for a BPO but for a quick/reliable ARV number to use.
The compelling question I continue to have is that most people refer to due diligence and I agree but isn't part of diligence getting reliable comp numbers and that has to be done through a realtor until you fully understand the market correct? I asked earlier what secondary resources are good from comps (online sites, department of taxation and assessment, current listings, etc.) however I didn't get much feedback on that and I assume it is because getting MLS comps is the most accurate and efficient way to pull comps. So I guess it brings me back to the same debate that has been discussed in detail which is should new investors (or new to the area or strategy) pay for comps. At this time my situation seems worked out but it is an interesting dilemma that other people may find themself in (and I may find myself in it again who knows).
- Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes13y
Originally posted by Derek Tyler:
Wayne I am not sure how the post read however the deal would be wholesaled to me as I would rehab the house and list it wih her. I am not interested in wholesaling deals, my exit strategies are hold, flip, lease options depending on the deal.OK, so the agent will make a commission on the rehab houses you list with the agent. How does the agent get paid on the ones you hold that did not come from the MLS, but for which comps were supplied? How does the agent get paid on the lease option properties that did not come from the MLS, but for which comps were supplied?
Plus the agent does not have 100% certainty that the rehabs will get listed through that agent, and of course just because it gets listed does not mean it will even sell - no guarantee of commission.
Maybe you should explore other methods for finding comps, and then you might have a better clue whether it is worth paying for them:
http://www.biggerpockets.com/forums/48/topics/77999-finding-comps---faq - SFR Investor · Phoenix, AZ · Member since 2009 · 484 posts · 181 votes13y
@Derek T,
I don't know if I'm more cautious, or less trusting than the other posters here, but I got my own license, MLS access & e-key because I wanted *all* the data, unfiltered. I got it originally for the purpose of purchasing my primary residence - my wife is extremely picky & I knew that looking the volume of homes we were going to *need* to see would wear out an agent in no time at all. The e-key means you can see them all. MLS access means you can scan for solds & if you find a neighborhood that's undervalued, you can "farm" it & look at every single house that pops until you find that *one* deal that's *worth* using your "cash bullet" on. I'm not wealthy, one bad deal could bury me for years. My "wall-o-cash" is just too small to make mistakes, and I wouldn't trust *anyone* to tell me what a "good deal" is. Give me the numbers, don't leave *anything* out, and if the deal is right, I'll see it.. Or kick myself for passing on it later!
So due-diligence is paramount, especially when you're starting out. And no one on this earth is more concerned about *your* financial health than you. So no - I wouldn't pay for comps, I wouldn't buy based on comps that anyone who wasn't related by blood gave me. Sitting through a hundred hours of class, getting fingerprinted & jumping through all the hoops to get licensed was 100% worth it, because I couldn't afford to make a mistake. And as lame as the classes were for the most part, I did learn a few things.
- Residential Real Estate Agent · Ocala, FL · Member since 2009 · 255 posts · 65 votes13y
Stay tuned for next week's episode when we talk about contractors doing inspections for free on wholesale deals.
- 13yDerek T.Real Estate Investor · Prince Geroge's County, MD · Member since 2012 · 392 posts · 104 votesOP
Steve thanks for the link to the links and thanks for compiling these links together. I came across it before and read most of the threads and researched the ones Joshua posted on his comp page as well. The common theme in most of these threads is you can use x, y, and z however always try to get it from the MLS as it will be more accurate and thorough.
Then some people talk about how they get free comps either through realtors, title companies, appraisers, etc. which they receive because of the promise of future business (or past business they have done with those professionals).
My concern is that is I use a non-MLS resource it won't be as accurate and using another resource that has a 5-10% curve can be an easy $7500-$15000 from my profits. I started trying to use zillow a few months back but the one site I really like the most is frankly mls but again I am a bit concerned with non MLS sites as far as what % they may be off. However for someone in my area this is probably the best free non MLS resource.
- Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes13y
realtor.com is the MLS, and it will show recent sales when asked :)
redfin.com also has the MLS data; there are some threads from earlier today with "MLS Access" as the subject, and there is a post from today that has a link to redfin if you're reading ...
- Specialist · San Antonio, TX · Member since 2012 · 462 posts · 294 votes13y
Originally posted by Steve Babiak:
there are some threads from earlier today with "MLS Access" as the subject,...Here you go Steve, Copy, Paste, and Post away!!!! ;)
http://www.biggerpockets.com/forums/311/topics/78399-real-estate-cma-websites
BIG HENRY
- 13yDerek T.Real Estate Investor · Prince Geroge's County, MD · Member since 2012 · 392 posts · 104 votesOP
Steve when I am referring to the MLS I am referring to the site that realtors use. I know realtor.com is the NAR website so it is more official then the other sites however it is not as thorough as the MLS that the agents use and can potentially skew comps, correct?
So for instance with this listing at Frankly MLS (http://franklymls.com/CH7763624) I see a more detailed breakdown of the sale. However if you use realtor.com (http://www.realtor.com/realestateandhomes-detail/6751-Periwinkle-Pl_Bryans-Road_MD_20616_M51988-41445) you would have missed the $14,000 worth of concessions that I would have to take into account (and the price drop and days on market).
See I thought the problem with sites such as zillow, redfin, realtor.com, trulio, etc. were that they don't list concessions, they don't list how long it was on the market, and sometimes the data had report timing issues thus you couldn't get a truly thorough comp. I thought that was why there was a pretty big consensus to get MLS comps through a realtor or yourself if you have access. Are you seeing a good amount of investors use realtor.com and use a comp analysis adjuster to help in their analysis of deals without getting a more thorough comp through the MLS?
- Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes13y
Henry -
Yes, I have paid an agent for her time. Back when I was starting out, I wanted to mine the MLS for data in my geographic area. I offered my agent $30/hour to run all the searches I wanted/needed. She was happy to do it and I was happy to pay for the work.
Once I started actually buying and selling properties, she stopped charging me, as she knew that she now had another reliable income stream off me that would compensate her for the work she did.
I eventually got my own license, so I could have more control of my business, at which point I didn't need my agent anymore. But I've never had to worry about whether she got paid a fair wage for the work she did for me.
I would never have even considered asking that agent to work for me without a guaranteed source of income. That would be like asking a contractor to do free work in the expectation that I'd eventually hire him to do a job. Does that seem reasonable?
Btw, I wonder if that agent who was 50 miles away ran searches for him? If so, he did it for free and now will likely never get paid.
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes13y
This is to all broker/agents out there.
If you stand for nothing you will fall for anything.Define your business and what you will and will not accept as a working business relationship.
I see many residential agents desperate to get any business and they fall for anything.Some things close and they get money and some don't.The agents bad allocation of time and not getting paid for the time invested wipes out the profitable transactions.
This is like an investor buying one good deal and then buying into a second bad deal.Now the 2 properties one making profit and one losing cancel each other out and you are no further along in your goals.
Derek why don't you take a continuing education class on bpo's or apprasials,etc.??
This will help you narrow down and analyze properties.Some of these classes are for agents but are open to the public if they pay a fee for the course.
- 13yDerek T.Real Estate Investor · Prince Geroge's County, MD · Member since 2012 · 392 posts · 104 votesOP
J Scott Sorry to chime in on Henry's post but I'm a little confused with the contractor example that you mentioned. Isn't this exactly what general contractors/subs do when placing bids? The drive to the property, create a scope of work or review yours, assess repairs and create a bid all with the hopes of you hiring them for the job and future jobs. This isn't a guarantee that they will get the job but they are doing initial free work to try to get it, correct?
I completed understand your point and I was wondering what the industry standard was for pulling comps but its not rare where a professional would spend some time for free giving you a service in the hopes that you will retain them for future business. You see it in auto repair, retail industries, real estate services, etc., etc., etc. I wouldn't ask a lawyer to do an eviction for me for free however I would ask them to do an LLC name search and reserve it for me for free and not see a problem with it. I guess my depends on the scope of the work and time invested however its not rare for free services to be employed in the hopes of gaining more work. It's just a matter of what the standard is for pulling comps in this industry and it seems pretty divided.
Joel Owens Good advice on the classes, I agree that further education is needed.
- Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes13y
Derek -
You said you wanted comps for wholesale deals where the agent wouldn't be compensated on those deals, right?
If that's true, then it's equivalent to the GC coming out to give a bid but having no shot of getting that particular job. I don't know of any GCs who would do that unless they had already worked with you and had gotten paid before.
- 13yDerek T.Real Estate Investor · Prince Geroge's County, MD · Member since 2012 · 392 posts · 104 votesOP
J Scott, no I would be the potential buyer on a wholesale deal as a rehabber for flips or holds. I am not particularly interested in wholesaling. I didn't reread my post from earlier but it must have sounded as though I was going to wholesale deals as I read this from a couple posters. No, I am looking to rehab units.
- Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes13y
The "MLS Access" topic that I mentioned previously:
http://www.biggerpockets.com/forums/67/topics/76833-mls-access
- 13yDerek T.Real Estate Investor · Prince Geroge's County, MD · Member since 2012 · 392 posts · 104 votesOP
Steve thanks for the post. It may be different in Georgia but here in MD a personal assistant or office worker who is unlicensed can get MLS access through a licensed agent or brokage. Not only have I heard of some investors who act as assistants for their agent but I called up and the customer service rep verified it as well. In addition, it is in writing here below.....
http://www.mris.com/mris-customers/subscribe-to-mris/subscriber-faqs/
and here
http://www.mris.com/_res/downloads/SubscriptionAgreement.pdf
If we are one of the few states that does this then we are lucky but I can assure you it is possible for unlicensed individuals to gain access in our state. The previous thread wouldn't be accurate in our state.
- Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes13y
Originally posted by Derek Tyler:
J Scott, no I would be the potential buyer on a wholesale deal as a rehabber for flips or holds. I am not particularly interested in wholesaling. I didn't reread my post from earlier but it must have sounded as though I was going to wholesale deals as I read this from a couple posters. No, I am looking to rehab units.So, you're planning to use the agent to resell the property (as the listing agent)? Are you willing to sign a listing agreement with the agent upfront (at the time you want comps)? If so, then I agree it's reasonable that she do free CMA for you.
But, not until she has an agreement to list the property...not just a promise...
- 13yDerek T.Real Estate Investor · Prince Geroge's County, MD · Member since 2012 · 392 posts · 104 votesOP
Yes I would be planning to list flips with her and to have her act as a property manager on any hold properties I acquire in the area. I wouldn't have a problem signing a listing agreement upfront as long as it included some time of language to protect me if she under performs or doesn't perform (especially with for the first few flips).
At this point she ran the initial CMA that I asked for however if I start requesting more then I believe this is a viable solution. Either this or the assistant access or a flat monthly fee for comps are all good ideas. Thanks for the input everyone!!
- Real Estate Broker · Jacksonville, OR · Member since 2009 · 199 posts · 155 votes13y
Great topic!
The Agent is simply protecting her investment.......her time.
Tell her you will compensate her for her $50 BPO fees, but ask she refunds a certain $$ amount out of her commission with each successful closing. She should think philosophy is acceptable, this shows good faith on your part. She is showing good faith by complying with a series of requests that will result in no pay. She is just trying to teach you to value her time, she is setting the stage for a mutually (financially) rewarding relationship. Now if she asks to be paid for comps in listing your flips, that is silly.
You indicted yourself that you are requiring her to submit multiple low-ball offers. A smart agent would refuse, UNLESS they BELIEVE you are a legitimate Buyer, who offers them the ability to earn money. I don’t know why people find it so objectionable that an Agent values their time. Investors sometimes want the agent to take all of the risk, with no reward in site.
If I am representing you, by writing a low ball offer. I am giving up the opportunity to represent my other Buyer’s on the same purchase. Meaning, I cannot adequately represent two (Buyer) parties on the same purchase. I actually have to refer my other Buyer’s I work for to ANOTHER agent to write an offer. What if I know my other investor Buyers will not be writing a low ball offer, that they are making offers that get accepted. Then, I am not only wasting my time, I am sacrificing a paycheck for your “loyalty.”
Just offering some perspective. Most successful agents are fiercely protective of the value of their time. If I were an investor, I would select the Agent that values time over some nit-wit who will run all over, writing low ball offers, and pretending it is “no problem.” Those agents go broke, and their clients pay a premium.
Cheers to your success!
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