Do I need to have my own agent?

Rental Property Investor · Victorville, CA · Member since 2017 · 30 posts · 13 votes

So I plan on purchasing in nevada. I live in california... I found a listing that I am interested in, I was wondering what the advantage of just going directly to the listing agent opposed to finding my own agent and having them contact the listing agent would be. PS. THANK YOU BIGGER POCKETS FOR GIVING ME THE PLATFORM TO OBTAIN ADVICE! AND THANK YOU TO WHOEVER GIVES ME THE ADVICE ON THIS SUBJECT!

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Nick GiulioniPro Member

Rental Property Investor · Carmel, IN · Member since 2016 · 1k+ posts · 615 votes

I highly recommend having an agent as a member of your team for a variety of reasons - the most important of which is to have an advocate for YOU. If you are going to start investing out of state, David Green has a really good book available here that you should really read first.

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Nick GiulioniPro Member
Rental Property Investor · Carmel, IN · Member since 2016 · 1k+ posts · 615 votes
7y
I highly recommend having an agent as a member of your team for a variety of reasons - the most important of which is to have an advocate for YOU. If you are going to start investing out of state, David Green has a really good book available here that you should really read first.
4 Reply
Gabe Waldrep
Investor · Argyle, TX · Member since 2014 · 112 posts · 73 votes
7y
I would definitely recommend having your own agent help and represent you. The listing agent represents the seller and will always act in their best interest. This means they may not always give you the best information or advice, where an agent acting on your behalf is doing everything to benefit you regardless of the effect on the seller. Depending upon the state laws, that buying agent working for you may not cost you anything. Here in Texas and several other states, the seller pays the commission for both sides of the transaction. If this is the case in Nevada, then there is no reason not to get your own agent.
Regardless of who pays commission, I would always recommend getting your own agent. Spend some time with that agent letting him/her know exactly know what you are wanting. Once you become familiar with the area then you can consider acting on your own if you want, but it's always good to have someone working your side especially if you are buying out of state.
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James Hong
OP
Rental Property Investor · Victorville, CA · Member since 2017 · 30 posts · 13 votes
7y
@Nick Giulioni Thank you for the advice. I did read that book! Do you suggest a agent in the nevada state or an agent that I'm familiar with in california to be my advocate?
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James Hong
OP
Rental Property Investor · Victorville, CA · Member since 2017 · 30 posts · 13 votes
7y
@Gabe Waldrep Gabe thank you so much! I have my eyes set on texas as well but I'm kind of worried on property management being that it is so far. If you wouldnt mind maybe I can ask you for some advice in the future... I really appreciate you taking the time to respond to this post.
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Jim Cummings
Residential Real Estate Broker · College Station, TX · Member since 2013 · 1k+ posts · 969 votes
7y
@James Hong. You'll want an Local Agent not just in Nevada but the City where the property is located. Someone who either knows or has the resources to research the property of interest.
A California Agent is most likely NOT Licensed to do business in Nevada.
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Gabe Waldrep
Investor · Argyle, TX · Member since 2014 · 112 posts · 73 votes
7y
@James Hong you are always welcome to contact me. I’m happy to help with anything I can. And depending on where you are looking in Texas I may have some connections or suggestions for property management.
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Nick GiulioniPro Member
Rental Property Investor · Carmel, IN · Member since 2016 · 1k+ posts · 615 votes
7y
Originally posted by @James Hong:
@Nick Giulioni Thank you for the advice. I did read that book! Do you suggest a agent in the nevada state or an agent that I'm familiar with in california to be my advocate?
100% find someone where you are buying. You want someone more knowledgeable about the area than you representing your interests.
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Trey BurnsPro Member
Upstate SC · Member since 2019 · 32 posts · 38 votes
7y
Morning @James Hong! I just recently attempted to purchase a home without an agent. The market is so absurd right now where I am that everyone is becoming an agent. I have friends I love dearly becoming agents, but there's no way I want them buying and negotiating for me. That was a lot of my hesitation.
A majority of the listing agents were baffled I was buying without an agent, and started telling me all the horrors and how dangerous it was. I don't make decisions based on fear, so that was more validation for me going my own route. However, one of the listing agents knew me and didn't try to convince me how dumb I was. We talked life and I learned they had been a realtor in the area for 20 years. I'm such a rookie that I had no idea I pay nothing to the agent as a buyer, and they shared that info with me (none of the others did).
I closed on the home with this agent and referred an out-of-state friend to them a week later who is now under contract for a rental. The relationship makes all the difference. If you're about to invest six figures in a different state, it's worth the initial flight/drive to meet with multiple local agents in-person to find the right fit.
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Brandon SturgillBusiness Member
Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
7y
@James Hong You definitely do not need an agent to acquire a property...hell, you don't even need a contract...a handshake can do it. The point is to team up with some boots on the ground. The one issue you run into is dual agency if you use the sellers agent...it's problematic for you, but good for us...license law does not allow for advocacy for one party over another, so getting advice on pricing and insider information on the property is a no-go...but the agent gets to make both sides of the commission...
So just be careful when you run into the dual agency issue...and ask the agent to waive part of their commission to give you an advantage on purchase price...
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James Hong
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Rental Property Investor · Victorville, CA · Member since 2017 · 30 posts · 13 votes
7y
@Jim Cummings thank you so much for your input! Very much appreciated
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James Hong
OP
Rental Property Investor · Victorville, CA · Member since 2017 · 30 posts · 13 votes
7y
@Nick Giulioni thank you for your input!
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James Hong
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Rental Property Investor · Victorville, CA · Member since 2017 · 30 posts · 13 votes
7y
@Trey Burns very true... thanks so much!
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James Hong
OP
Rental Property Investor · Victorville, CA · Member since 2017 · 30 posts · 13 votes
7y
@Brandon Sturgill thank you Mr brandon... that makes sense. I appreciate your advice
1 Reply
Robby Hogle
Rental Property Investor · W Bloomfield, MI · Member since 2017 · 21 posts · 16 votes
7y
@James Hong I think it really just depends on your level of experience. If you have to ask if you should have an agent, than the answer is probably yes! :)
But once you have a ton of experience under your belt, you don't need an agent (although it can still be convenient to have one). Not having an agent can also motivate the sellers agent to advocate for your bid assuming all other things are equal since they get double commission. And once they know they can make double commission because they know you don't use an agent, they will probably try to show you more deals in the future and become another source of deal flow!
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James Hong
OP
Rental Property Investor · Victorville, CA · Member since 2017 · 30 posts · 13 votes
7y
@Robby Hogle wow... that's so true... I didnt think of that... thank you robby... and yes.. I'm a rookie, lol... but I plan on not being for much longer!
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Ricardo R.Pro Member
Property Manager · Michigan Ctr, MI · Member since 2016 · 661 posts · 581 votes
7y
@James Hong I apologize for going against the grain here. But yes, I'll start off by saying that if you have never bought real estate before that using an agent would not be a bad idea. With that said, some of the best deals (when going through listings) are found without an agent and going directly to the listing agent IF the listing agent or the state they operate in allows that (dual agency). Let me explain why you will ALWAYS find a better deal that way... there are simply less people to take a 'cut' of the transaction. In a typical sale the Seller will pay 6% of the sales price in realtor's fees; 3% split between the Seller's agent & broker and 3% split between your agent & broker.
By going directly to the listing agent you completely eliminate one side of the equation which provides an incentive for the listing agent to look at your offer a bit closer since they are potentially getting a higher commission than 3%; additionally you can request that a portion of what would go to your agent go back into the Seller's pocket - however whether that happens or not, is up to the listing agent they may keep it all or split it with the Seller; either way you win... you're offer has received attention. The one issue you will have without an agent on your side is being taken seriously by the listing agent or the Seller, you can simply get over this by having your pre-approval (you can have more than one) AND by showing up with 'proof of funds' a simple bank statement will do.
What I would recommend if you are going the 'direct to the listing broker' route is that you use a real estate lawyer. I'm an agent myself and the fact is that most agents are there to represent you yes, but there is a conflict of interest --- if you don't buy, they don't make money. All agents will tell you they have your best interest at heart and they do have a fiduciary responsibility to you but, there really is no way for you to monitor that. Honestly, an agent can't legally represent you they say they will protect and monitor the transaction but they are not licensed lawyers; they may negotiate on your behalf but, they're not going to get down in the weeds to get you the best deal because once you purchase your property, they still have to run into these other agents on future transactions and don't want to break that relationship; few know how to properly analyze an investment property although most will tell you they can, and even fewer own investment properties.
If you feel like you need representation, for sure use an agent but, understand you can get representation with a lawyer which WILL be present with you in court and also understand that with representation you do gain a streamlined process which is the value an agent brings in today's market but you loose a connection with the seller's side.
I know I'm going against the grain here, and I'm an agent myself, but some of the best deals I have found before I was an agent was by not using an agent at all, but there is absolutely nothing wrong with using one and they will certainly make the process easier. Just opening your eyes up to options and hope this helps.
[email protected]810-844-1104
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Frank Wong
Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes
7y
Hi James,
If you are a Pro and require little assistance then you don't need an agent. Just know the listing agent represents the seller not you. If you are like the majority of investors who are not professionals you should have representation from a buyers agent. You need the buyer's agent to do a bunch of things for you before you make an offer.
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Jason L.
Rental Property Investor · Delray Beach, FL · Member since 2014 · 224 posts · 169 votes
7y
Originally posted by @Trey Burns:

Morning @James Hong! I just recently attempted to purchase a home without an agent. The market is so absurd right now where I am that everyone is becoming an agent. I have friends I love dearly becoming agents, but there's no way I want them buying and negotiating for me. That was a lot of my hesitation.
A majority of the listing agents were baffled I was buying without an agent, and started telling me all the horrors and how dangerous it was. I don't make decisions based on fear, so that was more validation for me going my own route. However, one of the listing agents knew me and didn't try to convince me how dumb I was. We talked life and I learned they had been a realtor in the area for 20 years. I'm such a rookie that I had no idea I pay nothing to the agent as a buyer, and they shared that info with me (none of the others did).
I closed on the home with this agent and referred an out-of-state friend to them a week later who is now under contract for a rental. The relationship makes all the difference. If you're about to invest six figures in a different state, it's worth the initial flight/drive to meet with multiple local agents in-person to find the right fit.
I just purchased a new house without using an agent. It's honestly not as doom and gloom as others make it seem. Agents use to be gatekeepers to data and information that is now readily available through modern technology. If you're willing to leverage these tools, then much of the value of using an agent can diminish (I'm sure I'll get flamed for mentioning this here).
Big part I disagree with you on though: the buyer may not pay anything to the agent directly but there is absolutely an indirect transfer going on. The buyer's agent's commission (say 3%) is included as part of your offer. So if you offer $100k on a house with an agent, then the seller is effectively only being offered $97k because they will have to pay the buyer's agent. If you remove the commission from the process, then you as the buyer can now offer $97k and have it be effectively equal to a buyer offering $100k with an agent. The only difference is that now you're actually paying/borrowing less even when making an equivalent offer. So yes it is costing you something to use an agent (which is not say that you shouldn't because in most cases you should).
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Account Closed
Real Estate Agent · Jacksonville, FL · Member since 2018 · 33 posts · 9 votes
7y
@James Hong It would help to have an agent for the first one or two deals so you are confident. It's kind of the reverse of "do a renovation yourself the first time so you know how much work actually goes into it". An agent local in an area you do not will know the area better and be better acquainted with the laws and regulations of the area. Also, someone who can go appear at appraisals and surveys on your behalf. As said earlier, a real estate lawyer can also be a good route to go, and many RE lawyers in my area get their license because of the incentives it provides and because of how many people go this route with them. Something I might add is an agent consultation. Someone who can go through every document you will have to provide in the area for a flat fee.
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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
7y
Find one who is experienced and works with investors. They will know the area, especially if you are not familiar with it.
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Brandon Carriere
Realtor · Las Vegas, NV · Member since 2018 · 218 posts · 147 votes
7y
@Ricardo R.
You as an agent definitely know that you're not guaranteed to get a better deal by going the route of the listing agent.. Unless the commission is variable in the listing agreement, its likely that the listing agent will get all 6% unless something else was agreed to prior to taking the listing.. Not only would a buyer not save anything by going this route, but now they have an agent making double the commission that has a fiduciary responsibility to the seller.. I couldn't imagine a worse scenario for a buyer who doesnt have experience or know everything about the process etc..
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Ricardo R.Pro Member
Property Manager · Michigan Ctr, MI · Member since 2016 · 661 posts · 581 votes
7y
@Brandon Carriere I apologize but, unfortunately I couldn't disagree more. I understand your view, and that is the view from an agent's perspective. I can only speak to my own experience as an agent, an investor and a property manager and from the experience of those around me but, unfortunately that has very rarely been the case with my own experiences and the investors and owners we interact with on a daily basis. There is value to having an agent but,very very rarely is that value in finding deals worthy of an investor. Some of the BEST deals that not only we as a management company, and investors and real estate agents have found when looking at traditional listings is by going directly to the listing broker.
A real estate agent has value but that value is in making it easier for a buyer to transact, period. We're in 2019 and as far as listings go that is yesterday's news buyers all have access to the internet, albeit it's not the MLS, the fact is that buyers no longer depend on us as heavily as before in which we as agents held all the cards (listings); representation, ask your broker if you can represent your buyer in court and he'll look at you like its your last day working there, that is the job of a real estate attorney, so that's out; acting as a neutral third party - that's the title company's responsibility. So I stand by in saying that the world has and is constantly changing and an agent that charges 6% on a home sale without providing much value (as has been my experience) will become yesterday's news quickly, the value in today's world comes in what you can do for that specific buyers that they can not otherwise do themselves with the same or better results.
[email protected]810-844-1104
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Brandon Carriere
Realtor · Las Vegas, NV · Member since 2018 · 218 posts · 147 votes
7y
@Ricardo R.
You’re talking in circles my friend. This guy NEEDS an agent to make it easier to transact and to protect his interests. He’s an out of state buyer and has no connections. Until he’s established, it would be insane to do anything otherwise
I have multiple properties out of state and still choose to pay an agent there to assist. They’re worth every penny.
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Aaron Poling
Realtor · WV · Member since 2018 · 454 posts · 310 votes
7y
@James Hong what advantage do you get by going straight to the listing agent? If there isn’t any then why wouldn’t you want your own representation.
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Ricardo R.Pro Member
Property Manager · Michigan Ctr, MI · Member since 2016 · 661 posts · 581 votes
7y
@Brandon Carriere, @James Hong @Aaron Poling Look I get it Brandon, but James said NOTHING about representation, he asked what BENEFITS he gets from going directly to the listing agent a property he already wants. With all do respect, you are 'assuming' he needs or even wants representation from a real estate agent (which again, he can get legal representation from the get go by using a real estate lawyer if he wanted - just another option). To the point of the 'benefit' he gets from going to the listing agent, there is just one question to ask,
"Would you as an agent/broker prefer to make 3% or 6% on a transaction?"
and that is the benefit that James would get (although not guaranteed) from going directly to the listing agent, the person that will present the offer to the seller and either paint the picture of good or bad. A buyer may or may not decide they want agent representation but, that is not for you or I to decide. I would however be interested in knowing what can a buyer's agent do for him that the listing agent, the title company, his real estate lawyer, a local investor and he himself as an investor are not able to do other than make it 'easier' to transact, if agent representation is not what he may be looking for?
[email protected]810-844-1104
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