How do I motivate Real Estate Agents?
Hi everyone,
I love this bigger pockets thing, I learn every time I come in and participate. Now I want to learn how to motivate real estate agents. I have asked three separate realtors to put in offers for me in the New Port Richie, Florida area. none of them have even bothered to reply, now I understand that I am putting in offers at 20% below asking price, but that's what I am willing to pay for the properties, the way I look at it I'm exchanging my money for homes, and that is a serious commitment. I want to buy 10 properties in that area this year, but I'm looking to make money, that's why they have to be good deals I know it's going to take a lot of work, but I'm willing to put in the work.
I even had one of the realtors tell me, "it would be good if you could get that property on those terms, but it would be unlikely." This particular property is a short sale, so I would think that this is a motivated seller. Some people are not willing to put in the effort, but I am, so I will keep insisting. I could offer to pay their commission upfront, but that would make it an awful deal for me. I don't want to dog on realtors, I know I have to raise my game and that's why I'm procuring my license, but in the meantime, I always try to speak to the listing agent, I also changed my strategy and spoke to a non listing agent, but that didn't work either, anyone have any other strategies?
Selling a property is an emotional thing even when you have been on either side a lot. The emotional aspect never goes away for the buyer or the seller. Its the people in between who don't have much emotional risk cause its just their job. You can respect that. If you really want to buy property for 80% of market you need to work a little harder than blaming an agent for not wanting to help you. If its a place you really want I think paying an agent out of pocket is a good idea but you should pick a property that has a high likelyhood of success in securing at least a counteroffer. That would be a distressed property or a property in an estate or some other reason why they would not just wait for a better offer. Also you could seek places that might be for sale but are not presently. That is where I have had the most success.
@Doug Smith, I will definitely be looking for your firm when I come down to Florida.
@Robert A Garcia thanks for pointing out the Emotional aspect of all this, But as a cadet told me at A graduating class that I recently spoke in, "It is my duty to make money for myself" And thank you for reminding me that this duty will require massive effort on my part
Short sales aren't about what the Seller will take. It's about what the lender will take. So, it isn't about the seller being motivated enough, but rather utilizing their limited time (prior to foreclosure notice) to get the best deal in front of the bank. So, if the Seller accepts a really low ball offer, and allows the lender to go through the process of evaluating (and most likely rejecting) the offer, it has taken up days that they could be evaluating a larger offer. Many agents only submit 1 offer to the lender at a time.
So, if the agent is telling you to pound sand, it may not be the agent's lack of interest, but rather them doing their job to facilitate the most likely acceptable offer for the Seller, that the bank will accept.
@Luiny Tavares I'm going to chime in as the newbie. You really need to build a relationship with an agent you know and trust. I have been a Real Estate Agent for three years. I jump at the opportunity to submit offers if I'm going to learn something new but I also have an interest in investing. I know most of the agents in my town are just trying to make a sale so they aren't going to waste their time submitting low ball offers. That being said I'm much more choosy about my clients now days. I've had my share of experience with people that would use me to show them houses and run comps but would submit the offer with a more experienced agent. Find an agent that has a passion for investing not just selling houses and you need to have a mutual respect of each others time. I don't take phone calls at 9:00 on Sunday nights but my clients know that. I'll gladly refer them to someone else if it is a problem.
You are sooo lucky, I have a great deal I'm going to offer! You get to work your tail off for weeks, maybe months, and you might get paid. Would you take my offer? An important part of investing is to put yourself in the shoes of the person on the other end of the deal.
Back when I used to work floor for a brokerage, I knew everytime a seminar roadshow was in town because I would get a flurry of callers explaining how lucky I was that they had selected me to represent them and their hundreds of no-money-down, low-ball offers. The calls all sounded the same because they were reading off a script.
Keep in mind that agents get calls all day from people who are going to make them rich. Some selling the latest sales gadget, wanna-be investors, or just plain scam artist, all who harvest our numbers from the MLS and lists companies.
I like the approach of paying a fee per offer, but I understand that you don't want to be paying upfront. This also could take an agent's motivation away from pursuing a deal, and encourage them to submit offers with 0% chance of acceptance.
Another approach you might consider is offering to sign a buy-broker agreement that states you agree to purchase a property within X amount of offers submitted, within X amount of time, or you will pay the agent X amount for a fee. This way you only pay a fee if you don't purchase something through the agent, and if you do purchase the seller pays the commissions. (Although you may want to agree to pay a commission to the agent for FSBO's) Being willing to sign a buy-broker agreement shows the agent that you are a serious buyer, and also protects the agent from you going around them after all of their work. It's a win-win for both people. Good luck.
Originally posted by @Gina Birdsong:
@Luiny Tavares I'm going to chime in as the newbie. You really need to build a relationship with an agent you know and trust. I have been a Real Estate Agent for three years. I jump at the opportunity to submit offers if I'm going to learn something new but I also have an interest in investing. I know most of agents in my town are just trying to make a sale so they aren't going to waste their time submitting low ball offers. That being said I'm much more choosy about my clients now days. I've had my share of experience with people that would use me to show them houses and run comps but would submit the offer with a more experienced agent. Find an agent that has a passion for investing not just selling houses and you need to have a mutual respect of each others time. I don't take phone calls at 9:00 on Sunday nights but my clients know that. I'll gladly refer them to someone else if it is a problem.
Gina....I hope you filed a procuring cause grievance against those agents with your board if the deal actually closed. You were entitled to the commission and you might be surprised how easy it would be to get it.
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@Russell Brazil No sir i didn't. I took it as a life lesson. Unfortunately the mistakes that taught me the most also seem to cost the most money. I appreciate the advice I will have to keep that in mind if I ever find myself in that situation again.
Get your own license so you don’t have to go through an Agent.
If they don't get back to you it's because your terms are probably "out of line" with the current market conditions. No agent wants to waste time on an offer that has zero chance of getting accepted.
Originally posted by @Luiny Tavares:
Hi everyone,
I love this bigger pockets thing, I learn every time I come in and participate. Now I want to learn how to motivate real estate agents. I have asked three separate realtors to put in offers for me in the New Port Richie, Florida area. none of them have even bothered to reply, now I understand that I am putting in offers at 20% below asking price, but that's what I am willing to pay for the properties, the way I look at it I'm exchanging my money for homes, and that is a serious commitment. I want to buy 10 properties in that area this year, but I'm looking to make money, that's why they have to be good deals I know it's going to take a lot of work, but I'm willing to put in the work.
I even had one of the realtors tell me, "it would be good if you could get that property on those terms, but it would be unlikely." This particular property is a short sale, so I would think that this is a motivated seller. Some people are not willing to put in the effort, but I am, so I will keep insisting. I could offer to pay their commission upfront, but that would make it an awful deal for me. I don't want to dog on realtors, I know I have to raise my game and that's why I'm procuring my license, but in the meantime, I always try to speak to the listing agent, I also changed my strategy and spoke to a non listing agent, but that didn't work either, anyone have any other strategies?
You're not working with the right realtor. Almost always, the listing agent is going to stay strong to the list price, but also depends on market conditions - most everything is hot right now. Find a realtor who understands and is willing to help you achieve your goals. The realtor who has helped me the longest and most, calls me Mr. Low Ball, but will submit any offer I bring him (i.e. he is not the listing agent on most deals).
I'm SHOCKED that there's another new investor on BP wondering why experienced real estate agents won't submit low-ball offers on properties in an area that the investor admittedly knows little about. </sarcasm>
Awesome suggestions by @Matt Shields - adapt and try approaches that will succeed.
Quite honestly low offers in the past were easier; with at a rising tide you need to know current market price. Know also the agent represents and look to get best market value, would you sell your house at 80% value?
I'm in NPR & know realtors, lenders & the neighborhoods here. PM me and we can chat about your specific situation I would be happy to give you some guidance.
Your offers are probably too low and not being taken seriously. Also, suggest you provide POF so they know you're ready & willing to "play".
Before making an offer on a property, do some homework. Find out what other similar homes have sold for within a 10 mile radius. Ask the listing agent for comparables and Seller disclosure forms. This will give you some insight into the condition of the property, what upgrades or repairs have been completed and when and how they came to their determined list price. You could also ask the listing agent some questions such as, "Why is seller listing the property? What time constraints do they have? What is the most important objective Seller is looking for (sometimes is not just the money, it's often TIME). Show the agent you're willing to wait for occupancy, for instance, if they need more time. Good luck.