I am new to REI, devouring education over the past several months but could use some frame of reference on what expectations are reasonable for agents. I'll avoid the temptation to give my whole story but the potentially relevant reference point is: I aiming to buy out of state, but in my hometown (only 5 hours from me) where I have several family members to help out with various tasks requiring physical presence in addition to being there already several times a year to visit. While I PLENTY of questions about other items related, here is what I'm wondering now:
1) The agent I'm working with charges a initial $500 fee for clients buying investment properties. He said this is only required on the first purchase, and from the 2nd on, no extra charge. I'm assuming this is connected with the lower purchase price of investment properties, especially in a market where homes are already low in price generally (Ohio). Is this kind of fee normal?
2) What is a reasonable amount of time for an agent to response and be available to show a home? For example, I just found a property today around lunchtime, contacted the agent at little after at 2:30 his time to show the home with my family member there, but he said he isn't available until tomorrow. Generally this seems totally reasonable, but realize that with most markets as hot as they are, that could be the difference between grabbing the property or not. In this case the property seems to cash flow easily, so I don't think it will last long. I imagine there is no simple, clean answer to this question, but it is something I don't remember being covered on the podcast or articles that much and I've only bought one home (the one I live in) before so haven't worked with many agents.
1. I haven't seen such a fee but can understand why an agent would want to implement such a charge. Lots of investors (typically newer investors) can take up an agent's time and not make a purchase or want offers to be written that have little to no chance of landing in today's market. I guess this is his way of separating the wheat from the chaff. Or it could just be him making sure he gets a fair amount upfront for his work since he works with lower-priced properties.
2. Response time and availability are two different things. Unfortunately, many agents tend not to answer any kind of call/email/text message/smoke signal/carrier pigeon with any sense of urgency. Some are actually busy, others are not. I still think responding within a few minutes to an hour, even to say he is busy, should be sufficient. But I am not aware of this individual's schedule so I can't really answer for him. It would be courtesy to let someone know your availability and try to make the meeting that day, or find someone who can stand in for him to show it on his behalf.
Thanks Bob, really appreciate getting an agent's perspective here. The odd part about the $500 is he charges at the first purchase so I still have the potential to waste his time and not purchase at all.
On point 2, to be clear he was responsive, but just not available which again makes total sense a solid agent wouldn't be sitting around with nothing to do, but when the market is hot and homes are selling in 1-2 days, that day delay showing could make or break a deal so trying to reconcile that with being reasonable about schedule. I know some agents have a team they work with that can fill in for those type of things for example.
Its a way of quickly weeding out time wasters. Ive considered doing something like that in the past, but now I just end up turning down about 50% of thr inquiries I get.
Will he lose some legit clients over this? Absolutely. But he will weed out dozens or even hundreds of people who likely wont be worth working with.
Hi Caleb. I own a brokerage and have never charged a fee such as the one you mentioned. My team strives for immediate response to requests but worst case 2 hours is a reasonable SLA to expect. Especially in these robust market times, quick movement is necessary!