Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
A colleague and I are trying this approach to agents with short sale listings on the MLS. We are also agents. Any thoughts?
Dear John,
I'm contacting you in regards to your short sale listing. Do you currently have an offer on the property?
I work with a short sale negotiator/investor who pays cash for short sale properties. My negotiator will work with the lender to negotiate the offer, and they will be the cash purchaser. My investors are purchasing these properties to re-sell to end users.
I would be happy to discuss this with you in further detail. Please call me at 732 xxx-xxxx
You will see more and more Investors "going" after Realtors for Short Sales. It is great, if it fits into your business plan.
You have to make sure that any Realtor you want to conduct business with, FULLY understands what you plan on doing. And make sure that they will participate fully. (I have a few clients that have Realtors sign an agreement that states what both parties are suppose to do and not do in each transaction.)
You will see more and more Investors "going" after Realtors for Short Sales. It is great, if it fits into your business plan.
You have to make sure that any Realtor you want to conduct business with, FULLY understands what you plan on doing. And make sure that they will participate fully. (I have a few clients that have Realtors sign an agreement that states what both parties are suppose to do and not do in each transaction.)
Aly L & motiv8td, I'm also working on the same thing and would like to hear input of how well you are doing with it and your experience for getting the realtors motivated to get some deals completed.
90% of our deals come from Realtors. We even have Realtors at this point bringing us deals BEFORE they list them.
I think it's a great way to bring in deals. I can give you some tips on What we do daily to bring in leads.
Now, I'm not an agent and neither is my partner. However, we have to agents that work with us directly who make phone calls to other agents in regards to bringing in business. They bring in about 3-4 leads per week right now. PM if you have any questions. Hope you start getting those leads!
Most of the agents in our area haven't responded well. Their typical reaction is suspicion, and many are convinced for whatever reason that short sales + investors + agents = fraud.
We do have a few that are interested in actually selling their listings and want to learn more, but most are convinced the FBI is going to break down their door if they work with us.
Nick, Aly, Adrian & Chris (and everyone else:) - I've been cold calling realtors and have a few who are definitely willing to work with me on SS, but none have really expressed any interest in being pro-active in getting leads(except one i just spoke with but he's got to get permission from his principle broker first)
I think one obstacle that I have to overcome is simply the fact that I have not yet closed a ss flip and they want to make sure I know what I'm doing before they spend a bunch of time getting leads. And it just seems odd to me that there will be two listing agreements (one with the owner and one with me and that the owner''s will be taken off the MLS and mine put up in its place - maybe I have that wrong and that's why its seems weird?) And I'm trying to put together a form email that spells out exactly how this all works that flows nicely and is easy to understand for realtors. I could go on...
So...would you guys be willing to keep this thread alive and post all about your interactions with realtors (marketing efforts, discussions, questions they present to you, etc)? If not, no big deal I'll just harass Nick and James with some more
I think the biggest thing is to understand the fact that your going to have objections. It's just part of the game. Every agent we reach out to doesn't want to work with us. I'd say 1/4 Realtors end up working with us.
Two things we have done have taken our business to the next level.
1. We had a broker friend that used to be a very large realtor before she started her own firm come on board. She then began calling every agent that she knew and talking to them about our business and what we do. Next thing you know another agent is talking to other agents in their office about what we do ETC and it's just growing..
Try finding a investor friendly realtor who understands what your doing and see the benefit. Don't be discouraged when you get shot down.
We put together a FAQ that we send out to Realtors who have a lot of questions. Pretty much answers every question or objection they may have.
I'll have to drop some more info later, but I've found personally the line that works ALMOST all the time when Realtors are hesitiant is.
" Bottom line is that we are CASH buyers who have a vested interest in the property and the transaction to be handled right. Only difference is we prefer to handle our transactions in house. We are confident in our own negotiations with the bank instead of a 3rd party. Again, we have a vested interest in making sure the lender comes back with a price that will ensure we are able to purchase the property."
Usually something along those lines lets us get past a few things. Also, we tell them we have references to other realtors in our area if they'd like to speak with them.
Another, when they hint around to it being fraud etc. We show them a article from the VAR legal counsel talking about exactly what it is we do and explaining that it isn't fraud. If they don't want to work with us after that then it would have been to much of a hassel to deal with them in the first place.
I can say the hardest part is getting a Realtor to allow them self to give up the control of the sale. They feel with you handling everything they aren't in control of it all.
They don't want you to have access to their sellers ETC. Upfront we say well "hey if you'd like us to send you the paperwork and you get it signed etc then that's fine with us" They ALWAYS come back later once they are tired of running paperwork and let us take it over LOL.
Biggest thing of ALL. Make sure you clearly explain to them that they will GET PAID and that they will see their commission on the CONTRACT. <--- This is usually what the hold up is because they think your trying to cut them out of the transaction.
Sorry for the ramble, but we were in your position about 8-10 months ago and i know it's frustrating. I want to see you get these deals!
Thanks Chris and Dave. You're right about the objections. One valuable thing we've learned since working with Nick is that we're not in the convincing, or arguing, business. We're happy to explain anything and everything to the best of our knowledge, and Nick has also offered to speak to agents. Our title companies and attorneys are also willing to help.
It's a great idea to have a brief FAQ for agents who prefer to see it in black and white. I also let them know that I'm working on a short sale now with an investor, and have the full support of my broker. I actually had an agent say "I know your broker, and I can't believe she would allow that!". Obviously, the broker knows more than the agent.
We tell them their commission is protected, we're not after it, and they'll get copies of all paperwork if requested.
At the end of the day though, if they're not interested or prefer to argue the point, we just thank them for their time and move on.
Thanks everyone, this is real good information. I have a meeting with a realtor on Tuesday and going to use some of the stuff in here to make her feel comfortable to move for with me on a deal. I know once the first deal is knocked out, everything will be smooth sailing.
Chris would you be willing to share the FAQ you send to the realtors? I actually want the realtors doing all the paperwork with the owners, that's a whole lot of time saved for me if they just have a few extra docs signed when they get the contract and listing agreement signed. the only thing i really want control of is negotiation and making sure all offers come to me and not the owners.
One objection I had recently from a realtor was that she didn't think other realtors and buyers would want to wait 2 mos to see if I would be able to accept their offer, OR in the case that say we get an offer for a C buyer on day one(or very early) of marketing, then after two months of waiting the A-B falls through and C has to start the process all over with the bank and still have it not be certain that their offer will be accepted. I didn't have any rebuttal for that except, "well yeah they just have to wait it out..." - pretty much sucked
Good luck Adrian and you're right, once the first one is done more and more will find their way to you.
Dave how would that be different if the Realtor was doing the short sale themselve. The buyer would still have to wait. Here is a big thing that you need to think about, at some points you would have to let some deals just go between the A & C. This will make you look very good in the light of the Seller and the listing agent. That will get you a lot of credit with the agent and they may use you in the future or let other realtors know what you did to make sure the deal was completed if you were in it or not.
My wife and I run a decent SS business with currently around 57 direct contracts with the sellers. All the comments I have seen regarding this post have been right on. We all have to remember that in the eyes of an agent, we as investors, are a direct threat to them. That is the way they perceive us. That perception is not correct, but their commission is primarily the only thing they are concerned with. In your conversations with agents, be sure you emphasize the fact that they will actually make more commissions by not wasting their time mediating with the lenders and spending their time finding buyers for all the properties they bring you.
I always ask a new agent, "Do you want to look busy or make money?" Using us as your system to get these SS done more consistently, will in turn help you to turn more of them into profit.
When we buy a SS, we normally do the rehab also, then sell it for just under full market price. If the agent only sold it to the rehabber, he would have made a lesser commission, then when he sells it almost at full price.
For example, I buy it for $200k, put $15k in rehab, then sell it for $375k The agent would have made a 3-6% commission on the first purchase (say 6% max $12K) But when he works with us, he doesn't make any commission on our purchase, but when we sell it he makes (max 6% $22,500) If the agent was smart, like some that we work with, he would want to know how he could partner on the profit side and forget the commission. That's for another post.
Gotta love the open forum of communication on these subjects now. Hurray!!!
This is good information. I am working with Adrian on the short sales and hoping to get some realtors to work with us on their short sales as well as joint venture partners.
Dave how would that be different if the Realtor was doing the short sale themselve. The buyer would still have to wait.
i totally see what you are saying, and i think the problem for some realtors arises when the end buyer's agent would be told that we are currently negotiating the SS and it may still take us 2 mos and even after that, they may still have to submit their offer to the lender and it could also be turned down. they think (and maybe rightly so) that other agents won't want to show it. I absolutely make sure the realtors and owners know up front that I will step out if it won't work for me.
Scot - It sounds like you aren't using a realtor on the A-B. If so how are you doing this? every deal I've submitted the lender wanted a listing agreement and wanted the place to be listed on the mls. I know some people have gotten around the issue before but it seems as though they are cracking down on not having the property listed. and I really like your business model of doing the rehab work to juice the profit up. added holding costs but i'm sure the added profit more than makes up for it.
Chris would you be willing to share the FAQ you send to the realtors? I actually want the realtors doing all the paperwork with the owners, that's a whole lot of time saved for me if they just have a few extra docs signed when they get the contract and listing agreement signed. the only thing i really want control of is negotiation and making sure all offers come to me and not the owners.
One objection I had recently from a realtor was that she didn't think other realtors and buyers would want to wait 2 mos to see if I would be able to accept their offer, OR in the case that say we get an offer for a C buyer on day one(or very early) of marketing, then after two months of waiting the A-B falls through and C has to start the process all over with the bank and still have it not be certain that their offer will be accepted. I didn't have any rebuttal for that except, "well yeah they just have to wait it out..." - pretty much sucked
Good luck Adrian and you're right, once the first one is done more and more will find their way to you.
Dave, if you PM me with your email address I'd be happy to get you a copy of our FAQ.
Biggest thing to remember is that when it all really comes down to it the agent doesn't care about all the jazz. They just want to make sure they are going to get PAID. Just like me an you. Like someone said really talk up the commissions.
As for having realtor on the A-B. We do that all the time. We use the refferring realtor to be our buyers agent. Doesn't matter if we have a agent or not because we are either paying that out to the bank or to an agent.
We have recently been rehabing our properties as well in order to increase profit. You increase risk at the same time however the profits speak for themselves.
We get most of our business after we do a deal with one agent and they see how beneficial everything is etc and then start talking to other agents. Hope my info has helped!
One other quick thing is I think you may be re-listing the property to quickly in search of a end buyer. We generally wait until AFTER the BPO in order to remarket. Main reason being is a good BPO agent is going to see your listing out there and could kill your deal. Unless I'm not reading what your saying correctly.
When are you guys re-listing your marked up deals??
as for doing the rehab work - what type of financing are you using for these projects? and yes you read me correctly. I've just heard differing opinions on when to re-list and some say right away, others say wait as long as possible. I think that waiting until after the BPO is a great idea, but what do you do if the lender requests that it be on the MLS before it will proceed (just a hypothetical question)?
We are using private funding and transactional funding on our deals. Mainly now private money on deals we Rehab. We only Rehab on deals that are showing a lot of interest when we market and are in areas that hold a lot of value in our area.
I always recommend holding until after the BPO.
However, as far as the lender requiring a listing they almost always do that. In our intial document request we ALWAYS as the Realtor for a pocket listing.
Which is exactly as it sounds a listing we keep in our pocket so that as soon as the lender ask for one we already have it to provide. :wink: