Dirty Buying Secret That Works

Buying & Selling Real Estate
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Dirty Buying Secret That Works

D Turner
Member since 2019 · 17 posts · 48 votes

I always purchase a listed property from the listing agent and never use an outside agent. During the last run on property 2000-2007 I lost so many properties because of unscrupulous realtors. I mean realtors were ripping sellers off by selling their property to close friends and investors without giving newbies like me a chance.

I would put bids on properties for over the asking price and the listing agents would eventually sell the properties to their own clients at a lower price and collect the 6 percent commission instead of selling it to me at a higher price and receiving a 3% commission.

That made me so mad that now I do not care who my agent is, I will only purchase from the listing agent because I understand greed. Greed does something to realtors and generally cost the unsuspected home owner.

And guess what I have landed just about every property since I started that philosophy.

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Brandon Cooper
Rental Property Investor · Winston Salem, NC · Member since 2019 · 63 posts · 54 votes
6y

@D Turner by law, they have to present every offer to a homeowner, so im not quiet sure thats the case

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  • Todd Powell
    Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
    6y

    @D Turner. Also the information flow is direct rather than 2nd hand to filter. The art of the deal is how to close the deal which I LOVE doing. Most times, I end up loading my realtors lips, and advising her on how to negotiate.

    0Reply
  • Jed Haslam-Walker
    Real Estate Agent · Sarasota, FL · Member since 2020 · 77 posts · 102 votes
    6y

    @D Turner @Yolanda Salas Yolanda is absolutely right. It's very frustrating as a professional when people operate in underhanded and corrupt ways. It definitely makes the job harder for the rest of us. 

    The difference between a real estate agent and a Realtor is that a Realtor has voluntarily chosen to join a professional organisation of Real Estate Agents that governs their behaviour with very strict codes of ethics and best practices. This organisation is expensive to join, charges annually and there are specific requirements for training. The reason for this organisation, the National Association of Realtors ( NAR) is precisely to provide buyers and sellers with a higher calibre of professional service. It is a badge that helps the client on either side of a transaction know that the Realtor follows a strict code and if they don't they can and are quickly disciplined. Real estate agents are not required to join this organisation it is voluntary - agents are not permitted to describe themselves as Realtors if they are not a member of NAR - it is a violation to do so and would fall under mis-representation which is a serious offence.

    Notwithstanding membership of a professional body the behaviours described are illegal at least they are in FL. Florida law states that all offers on a property MUST be submitted to the seller in double quick time too. As Yolanda correctly pointed out - ANY violation of that can be reported to the Department of Business and Professional Regulation which governs real estate agents' operations. Anyone can log a complaint against a real estate agent or a broker, anonymously if they need to and the DBPR have a strict timeline that they must respond to this complaint and resolve it satisfactorily. There is a very well oiled machine that deals with these issues.

    A good Realtor serves their client first and foremost - not themselves. When you put yourself in the position where you do not have a professional operating on your behalf you make yourself very vulnerable and you reduce your opportunity for a good deal. I have seen so many disasters that look perfectly fine in the surface of the transaction but once the closing papers have been signed the clean-up from deals that have been made trying to either do it on the cheap or to try to get the upper hand can be very ugly indeed. A good Realtor should be your greatest asset.

    3Reply
  • Derek Hamilton
    New York, NY · Member since 2020 · 54 posts · 14 votes
    6y

    @Brandon Cooper this is true however in the past I was a real estate agent in NY and I had a cash buyer who was my mother in-law at the time. The sellers agent held me off until the owner accepted another offer. They gave me the run around for 3 days until that contract was signed.

    2Reply
  • Leon Lee
    Real Estate Investor · Atlanta, GA · Member since 2016 · 286 posts · 67 votes
    6y

    It is shocking to know that my suspicion for a long time seems a common practice. Are there good ways to find out whether listing agents are not presenting all accepted offers to the seller?


    Thanks
    lee 

    0Reply
  • Joseph CacciapagliaBusiness Member
    Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
    6y

    I don't believe this is actually a common practice of listing agents, or at least it hasn't been in any of the markets I've worked in. 80%+ of my business comes from representing investors on the buy side, and we win in a lot of competitive bidding situations. In fact I can't remember the last time that a listing agent sold to his own client over mine (we can see the selling agent in the MLS after it closes), but there are plenty of times we lose out to other bids. It's possible that this happens in some markets, but I just haven't seen it TX, NJ, or PA, which are the states I've been licensed in at different points in time. I'm sure that it happens occasionally, but I don't think that it poses enough of a risk to forgo representation by a buyer's agent.

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  • Erik B.
    Rental Property Investor · Amityville, NY · Member since 2018 · 351 posts · 441 votes
    6y
    Originally posted by @Joseph Cacciapaglia:

    I don't believe this is actually a common practice of listing agents, or at least it hasn't been in any of the markets I've worked in. 80%+ of my business comes from representing investors on the buy side, and we win in a lot of competitive bidding situations. In fact I can't remember the last time that a listing agent sold to his own client over mine (we can see the selling agent in the MLS after it closes), but there are plenty of times we lose out to other bids. It's possible that this happens in some markets, but I just haven't seen it TX, NJ, or PA, which are the states I've been licensed in at different points in time. I'm sure that it happens occasionally, but I don't think that it poses enough of a risk to forgo representation by a buyer's agent.

     I would respectfully say you are missing or not aware to how a lot of the transactions are being handled. 

    From my perspective it is not so much the offers aren't being submitted... it's that we cant get get to even see a property. Or when a highest and best situation occurs (which is pretty much every time) the listing agent tells their friend, investor or family member just how much to bid to beat the other offers.

    4Reply
  • Shiloh LundahlPro Member
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    6y

    @D Turner I use this tactic all the time. I have purchased several properties this way. I’m surprised more people don’t do this regularly, especially if it a good deal. Of course I don’t trust that the realtor will have my interest in mind so I do my own due diligence rather than trusting what the realtor says.

    Another trick I use to get properties that many people may think is backhanded is if I find a property that was sent out from a wholesaler that was found on the MLS in an area where I buy, I'll call up the seller's realtor and tell them that the property that they have a contract on was sent out on a wholesale list and the wholesaler may or may not close on it if they don't find a buyer at their increased asking price. Then I tell the seller's realtor that if the buyer calls them back to renegotiate the property, or backs out, that I will buy it for what they have it under contract for (or a thousand dollars more).

    That way the wholesaler either has to buy the property themselves, if they don’t sell it, or I can get the property without paying the wholesaler markup. I’ve done this a handful of times and it’s worked.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Originally posted by @Nick C.:

    This was rampant during the down years, 2009 - 2013. Our strategy was to make friends with the listing agents. Back then they were ripping off the banks, most of the good deals were foreclosures and then short sales, so no one minded as much. 

    Proving the homeowner never saw an offer would be very difficult and take a long time. By the time a lawsuit got anywhere the house would be long since sold. I guess the only reason to sue an agent for this is if you're angry enough and want to get revenge, but suing to get houses is a losing strategy.

    this is how commercial agents work..  IE those that sell investments..  just try to buy an apartment complex.. the listing agent ( commercial broker) will run the apartment by his own buyers first and foremost..  then he will run it by the agents in his office.. and only when the agent cant sell to a client of his/hers or inter office will they expose it to other agents or the open market.. this is SOP in the investment world.

    And for beater fixers I can see agents also wanting to control the buyers ..

    For open market mom and pop owner occ i think this is not the case.

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  • Joseph CacciapagliaBusiness Member
    Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
    6y
    Originally posted by @Erik B.:
    Originally posted by @Joseph Cacciapaglia:

    I don't believe this is actually a common practice of listing agents, or at least it hasn't been in any of the markets I've worked in. 80%+ of my business comes from representing investors on the buy side, and we win in a lot of competitive bidding situations. In fact I can't remember the last time that a listing agent sold to his own client over mine (we can see the selling agent in the MLS after it closes), but there are plenty of times we lose out to other bids. It's possible that this happens in some markets, but I just haven't seen it TX, NJ, or PA, which are the states I've been licensed in at different points in time. I'm sure that it happens occasionally, but I don't think that it poses enough of a risk to forgo representation by a buyer's agent.

     I would respectfully say you are missing or not aware to how a lot of the transactions are being handled. 

    From my perspective it is not so much the offers aren't being submitted... it's that we cant get get to even see a property. Or when a highest and best situation occurs (which is pretty much every time) the listing agent tells their friend, investor or family member just how much to bid to beat the other offers.

    If it were a widespread practice, I'd be having a much harder time making a living doing what I'm doing. We win a lot of deals, and it's never because I'm friends with the listing agents and I hardly ever have a problem showing properties. I also very rarely see listing agents double ending their deals, which would be the case if they were doing this. I always go back an see who the buyer's agent was the won the deal once it closes. It's possible that you're in a particularly shady market, or that I've gotten lucky in the 4-5 markets I've been in over the years. I'm not sure why else our experiences would be so different.

    One thing that does happen, is that we'll sometimes win a deal when we aren't the highest bidder. This happens because the listing agent knows that our clients are well vetted, and their seller is more concerned with certainty of close, than with getting the last penny from their deal. I would bet from the outside, this looks like I'm friends with a particular agent. That's not the case though.

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  • Michael Ablan
    Real Estate Broker · Watertown, NY · Member since 2016 · 1k+ posts · 1k+ votes
    6y

    @D Turner  -  This is how fables and old wives tales were created.  One person told a tale and that tale changed every so slightly every time it was retold.  

    You can tell your agent one thing and it's almost guaranteed the message they convey will be slightly different (if you're lucky it's only slightly haha).  Sometimes it can be COMPLETELY different.  The less regurgitation the better, especially when negotiating 

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Originally posted by @Shiloh Lundahl:

    @D Turner I use this tactic all the time. I have purchased several properties this way. I’m surprised more people don’t do this regularly, especially if it a good deal. Of course I don’t trust that the realtor will have my interest in mind so I do my own due diligence rather than trusting what the realtor says.

    Another trick I use to get properties that many people may think is backhanded is if I find a property that was sent out from a wholesaler that was found on the MLS in an area where I buy, I'll call up the seller's realtor and tell them that the property that they have a contract on was sent out on a wholesale list and the wholesaler may or may not close on it if they don't find a buyer at their increased asking price. Then I tell the seller's realtor that if the buyer calls them back to renegotiate the property, or backs out, that I will buy it for what they have it under contract for (or a thousand dollars more).

    That way the wholesaler either has to buy the property themselves, if they don’t sell it, or I can get the property without paying the wholesaler markup. I’ve done this a handful of times and it’s worked.

    YUp nothing wrong with making a back up offer and letting wholesalers lead you to the deals  :)

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  • Yoel Frometa
    Member since 2017 · 9 posts · 0 votes
    6y

    @Mike S.

    Hello Mike that is a good way to avoid the agent not presenting the offer to the seller, but how do someone gets the sellers contact info?

    0Reply
  • Account Closed
    Riverside, CA · Member since 2017 · 412 posts · 296 votes
    6y
    Originally posted by @Yoel Frometa:

    @Mike S.

    Hello Mike that is a good way to avoid the agent not presenting the offer to the seller, but how do someone gets the sellers contact info?

    There are list companies that allow you to put in an address and they tell you everything you need to know about the property.

    You can also look it up on the assessor's website in many locations.
    1Reply
  • Jaylan ArcherBusiness Member
    Real Estate Agent · Portsmouth, NH · Member since 2014 · 150 posts · 65 votes
    6y

    @Erik Baumer

    It seems as though you would actually benefit from getting a buyers agent.

    If the listing agent isn’t even getting back to you perhaps a quick, hungry and eager buyers agent would get the property showing scheduled for you.

    If your buyers agent isn’t able to get the sellers agent to respond, they could complain to the managing broker and then to the real estate commission and potential penalties or fees could be assessed.

    Another option if you feel as though your offer isn’t being presented would be to request that the listing agent send back a signed copy of receipt. This would at least ensure that your offer was presented.

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  • Leon Lee
    Real Estate Investor · Atlanta, GA · Member since 2016 · 286 posts · 67 votes
    6y
    Originally posted by @Jaylan Archer:

    @Erik Baumer

    It seems as though you would actually benefit from getting a buyers agent.

    If the listing agent isn’t even getting back to you perhaps a quick, hungry and eager buyers agent would get the property showing scheduled for you.

    If your buyers agent isn’t able to get the sellers agent to respond, they could complain to the managing broker and then to the real estate commission and potential penalties or fees could be assessed.

    Another option if you feel as though your offer isn’t being presented would be to request that the listing agent send back a signed copy of receipt. This would at least ensure that your offer was presented.

    Jaylan

    What are good ways for a seller to ensure that the seller's listing agent presented all the offers she/he received from the buyers to the seller, instead of only the offers that will guarantee the listing agent double commissions? I believe that most listing agents will not do that, only "trust but verify". 

    Thanks

    Lee

    0Reply
  • Yoel Frometa
    Member since 2017 · 9 posts · 0 votes
    6y

    @Mike S.

    Hmmm I’ll look into that, thank you very much.

    0Reply
  • Rob Massopust
    Real Estate Broker · Santa Ana CA [South Coast Metro] · Member since 2016 · 459 posts · 202 votes
    6y

    That agent that is double siding the deal is making more than you are. Just saying.

    It happens all the time, until it is not allowed by law [some states have it] agents are going to do it. Thats why iBuyers are gaining so much traction because of the greed factor and many sellers do not want to deal with it. But in fact the ibuyers are discounting more than if you had an agent double side.

    0Reply
  • Erik B.
    Rental Property Investor · Amityville, NY · Member since 2018 · 351 posts · 441 votes
    6y
    Originally posted by @Jaylan Archer:

    @Erik Baumer

    It seems as though you would actually benefit from getting a buyers agent.

    If the listing agent isn’t even getting back to you perhaps a quick, hungry and eager buyers agent would get the property showing scheduled for you.

    If your buyers agent isn’t able to get the sellers agent to respond, they could complain to the managing broker and then to the real estate commission and potential penalties or fees could be assessed.

    Another option if you feel as though your offer isn’t being presented would be to request that the listing agent send back a signed copy of receipt. This would at least ensure that your offer was presented.

     You misread my posts. I have buyers agent and neither her or I could get a response back to schedule a showing. Houses were later sold everytime listing agent was both sides of the deal.

    1Reply
  • Michael King
    Rental Property Investor · Navarre, FL · Member since 2019 · 913 posts · 640 votes
    6y
    Originally posted by @D Turner:

    I always purchase a listed property from the listing agent and never use an outside agent. During the last run on property 2000-2007 I lost so many properties because of unscrupulous realtors. I mean realtors were ripping sellers off by selling their property to close friends and investors without giving newbies like me a chance.

    I would put bids on properties for over the asking price and the listing agents would eventually sell the properties to their own clients at a lower price and collect the 6 percent commission instead of selling it to me at a higher price and receiving a 3% commission.

    That made me so mad that now I do not care who my agent is, I will only purchase from the listing agent because I understand greed. Greed does something to realtors and generally cost the unsuspected home owner.

    And guess what I have landed just about every property since I started that philosophy.

    I recently decided to only buy through the listing agent, but my reasoning has been that buyers agents I've used have been too slow to get me a showing and losing the properties. I've tried to work with too many lazy agents, and I have no idea how many thousands of dollars it has cost them in their laze haze. 

    1Reply
  • Thomas J. Budka
    New to Real Estate · MA · Member since 2020 · 25 posts · 9 votes
    6y

    @Brandon Cooper yes it is the law. However, when I bought my current occupied residence it was listed for 359. My wife and I made offers on the property up to 374, our limit at the time. All offers were refused. Our house went off market for a few weeks and was re-listed with a new agent at 349,900. We offered 350 and got it. Turns out, it was a husband and wife realtor who were the original agents and they were not notifying the owners of our bids purposely to collect more money on the commission. In the end, they actually lost the house sale totally and I have no idea what happened to their business. But from experience, I can say it personally happened to me.

    1Reply
  • Michael King
    Rental Property Investor · Navarre, FL · Member since 2019 · 913 posts · 640 votes
    6y
    Originally posted by @Jed Haslam-Walker:

    @D Turner @Yolanda Salas Yolanda is absolutely right. It's very frustrating as a professional when people operate in underhanded and corrupt ways. It definitely makes the job harder for the rest of us. 

    The difference between a real estate agent and a Realtor is that a Realtor has voluntarily chosen to join a professional organisation of Real Estate Agents that governs their behaviour with very strict codes of ethics and best practices. This organisation is expensive to join, charges annually and there are specific requirements for training. The reason for this organisation, the National Association of Realtors ( NAR) is precisely to provide buyers and sellers with a higher calibre of professional service. It is a badge that helps the client on either side of a transaction know that the Realtor follows a strict code and if they don't they can and are quickly disciplined. Real estate agents are not required to join this organisation it is voluntary - agents are not permitted to describe themselves as Realtors if they are not a member of NAR - it is a violation to do so and would fall under mis-representation which is a serious offence.

    Notwithstanding membership of a professional body the behaviours described are illegal at least they are in FL. Florida law states that all offers on a property MUST be submitted to the seller in double quick time too. As Yolanda correctly pointed out - ANY violation of that can be reported to the Department of Business and Professional Regulation which governs real estate agents' operations. Anyone can log a complaint against a real estate agent or a broker, anonymously if they need to and the DBPR have a strict timeline that they must respond to this complaint and resolve it satisfactorily. There is a very well oiled machine that deals with these issues.

    A good Realtor serves their client first and foremost - not themselves. When you put yourself in the position where you do not have a professional operating on your behalf you make yourself very vulnerable and you reduce your opportunity for a good deal. I have seen so many disasters that look perfectly fine in the surface of the transaction but once the closing papers have been signed the clean-up from deals that have been made trying to either do it on the cheap or to try to get the upper hand can be very ugly indeed. A good Realtor should be your greatest asset.

     Wow I didn't know there was a difference, other than saving ink on the typewriter...Realtor vs real estate agent.

    0Reply
  • Michael King
    Rental Property Investor · Navarre, FL · Member since 2019 · 913 posts · 640 votes
    6y
    Originally posted by @Todd Powell:

    @D Turner. Also the information flow is direct rather than 2nd hand to filter. The art of the deal is how to close the deal which I LOVE doing. Most times, I end up loading my realtors lips, and advising her on how to negotiate.

     When I got to that last sentence, for a moment there I wasn't sure which website I was on.

    0Reply
  • Jaylan ArcherBusiness Member
    Real Estate Agent · Portsmouth, NH · Member since 2014 · 150 posts · 65 votes
    6y

    @Leon Lee

    That’s a good question. I’m not sure I can give an answer that would guarantee it.

    All I can say is it’s important to work with a broker that you trust. One with good reviews, experience and maybe even one a friend or family person has recommended.

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  • Jaylan ArcherBusiness Member
    Real Estate Agent · Portsmouth, NH · Member since 2014 · 150 posts · 65 votes
    6y

    @Erik Baumer

    I, as an agent (your buyers agent) would file a complaint to the listing agents managing broker.

    I personally have never seen that happen in five years of practice but I’m sure if it is consistently happening with you and your broker, it would be happening to other buyer agents.

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  • D Turner
    OP
    Member since 2019 · 17 posts · 48 votes
    6y

    @Thomas J. Budka

    Sad to hear. The true victims are the selling homeowners. The persons selling their nest-egg, retirement cash, savings. The seller pays 6% to the realtor and will most likely never findout that additional money was left on the table.

    And guess what, I like good realtors. Especially, when they have pocket listings and graciously makes me one of their first few calls.

    1Reply
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