Investor · Phoenix, AZ · Member since 2014 · 22 posts · 10 votes
Hey BP, a friend recently mentioned that there are some buyers' agents that offer commission rebates of 1% or so. And since the commission is already factored into sale price (as the seller pays the commissions) thought this could be a straightforward way to keep more money in my pockets. Anyone have experience with getting commission rebates from buyers agents? or any referrals to agents in the Phoenix area that are open to negotiating rebates?
Boca Raton, FL · Member since 2016 · 145 posts · 67 votes
10y
@Chris Isaacson. On the contrary, your assumption is completely out of place without even knowing our business model. I am the Broker of the company and personally service as full broker representation many upscale customers in high end transaction (very selected group of customers). I specialize in investors and top executives relocation with an outstanding reputation. I am member of our board's grievance ethics committee and works toward a professionalization of our business. If you read my posts, they are insightful and helpful to the BP community. There is one where I describe what a Realtor should be and what a Realtor should do for an investor (customer-buyer) and that is exactly what I do for my customers; and I am expensive for doing this. I strive to help investors make the best decision and make the best profit possible, even in detriment of my own income - standard of Ethics require us to work for the best benefit of our customers .... this will give you immense power, infinite leads, repeat business, and good thankful friends (which, for me is much more valuable than money).
I see you have your license less than 2 year ago, so I understand you are still full of pragmatic dreams but you will soon get to understand how broad our profession can be and discover the different ways you can service the public and still offer excellent value; you will find a changing world where the customer is being increasingly empowered by technology and market disruptors. You have to keep moving, switching, shifting, reacting, thinking outside of the box, innovating, etc.
Through my more than 14 years in my business I found that some people did not need a listing agent and shouldn't pay for one so we created a flat fee service as well (not the bulk of our income by far) to service that small portion of the market. I have cried on the phone with some of my elderly flat fee customers (some of which became good friends and have already passed away); cried and suffered because they could barely sale the house, pay ONLY 2.5% commission and break even - you obviously wouldn't take that customer ... but I do and give them peace of mind in difficult times. Life is more than making money.
Furthermore being a member our Board's grievance ethics committee I would suggest you review the Code of Ethics and Standards of Practice because discriminating (or black listing) Entry Only, Limited Service, or Flat Fee listings and refusing to show these to your potential buyers (even if they are good fits for their needs) can get you an Ethics Violation and a sanction by your Board. Furthermore if you refuse to show your buyer a property, they will just go to Zillow , Realtor.com, Trulia and skip you altogether. The availability of information in the Internet for consumers does not allow agents to "hide" properties from their buyers. When they like a property, they will find a way to getting to see it and buy it. I understand and respect if your business model is going after the low hanging fruit ... that is OK too.
Bottom line, our business model is as valid as yours or as any body's else's and you should not assume that I give a bad service and no value to my customers. Understanding why we do what we do for a low cost is much more profound and philosophical than your simplistic assumption.
Real Estate Agent · Rocklin, CA · Member since 2016 · 79 posts · 50 votes
10y
@Jorge Zea You can hold off patronizing me over your 14 years experience, I have been licensed for under 2 years but I worked for my father and a license was not necessary for our business model. I do learn from mentor's more experienced than myself but 14 years does not guarantee you are an expert. Not suggesting this is the case with you but I am continually baffled by agents who have been in the business 20+ years but don't know jack.
As for blacklisting properties if you read above I said I know agents who don't show these, for reasons I already explained. I will leave it at that.
Furthermore, I don't hide properties from my buyers, it's not possible as they see them online. I provide them with everything I know. My role is not to be Zillow or Trulia so I am not worried about being skipped because they found the property online.
I think it is a little overzealous to be throwing out ethics violation comments but your the Board's ethics committee so I can see how that influences things.
If you'd like to talk about this further PM me so we can return the thread to the OP.
Residential Real Estate Broker · Miami-Doral, FL · Member since 2015 · 39 posts · 13 votes
10y
Not to get off the subject but there is a difference between someone with only two years experience in selling real estate (2 years X 2 years work experience) and one with 20 years in the business with one year selling experience. (20 years X 1 year work experience - A 20 year card carrying member).
It's not how long one has been wearing the hat, but what work (acquired knowledge, experience) has been attained while wearing the hat. As in any field...
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
10y
@Chris Isaacson and @Jorge Zea. You are both allowed your opinion, however please keep it professional on this site and keep it to the topic at hand in this thread.
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
10y
@Jay Hinrichs, the companies you're talking about in the Denver area are Redefy and Trelora. I think Redfin also does discounted-to-the-seller properties.
Local agents I've talked to are up in arms about these companies, as they offer to sell a home for a very low total out of pocket to the sellers - $3000 or $4000, but then expect a full commission when they help someone buy a home.
@Chris Mason, the best course of action is to find a great agent. Cultivate a relationship with them, and after several deals, you can ask him or her if they would consider lowering their commission when you sell your properties. 1% isn't such a big deal for an agent who knows they're getting repeat business. As an agent, it's far easier to list a property than to help someone buy one. It's still work to list a property, but I'm not driving you all over the place looking at houses. I showed my last buyer more than 40 hours. Located all over 3 different cities.
Finding a great agent can be tough because the barrier to entry is so low. My state requires 168 hours of class time, and we were the highest until I believe Texas came and took over the title with 190 hours. But some states require as little as 40 hours of classroom training to become an agent. I didn't learn anything in my 168 hours, I can't imagine the level of non-knowledge that's in those 40-hour courses. I take an 8-hour class on how to properly fill out a contract every year they make changes!
Realtor · Denver, CO · Member since 2016 · 499 posts · 129 votes
10y
The agent always shows the house and unless they are willing to take the commission offered by the discounted agency they need to negotiate their commission back on their client or somehow work it into the contract. Doing fiduciary duty for your client is to have that conversation before tou show that house or after. Make sure your buyers understand the cost to them for buying that house. Many agents explain that the buyers do not have to pay anything for a sale but in these cases they do.
Realtor · Denver, CO · Member since 2013 · 2k+ posts · 1k+ votes
10y
They do a lot of business right now, but clients are put into a mill. That works for some, but not others. Once the market swings towards the other way, they'll be gone.
In my buyer's agency agreements, I talk to my buyers about these situations and checkmark, buyer WILL pay if the seller doesn't pay it all. If they won't sign it, then I'm not going to work with them.
Meditate about it ... run numbers and always use flat fee listing services ... it is worth for you to do the listing agents work and save a ton of money and make your CASH ON CASH ridiculously better. Bond with the buyer's agent and he will be a huge support - he wants his commission regardless of how much the other side os getting.
Need advice on how to use an effective Flat Fee service ... reach out please.\
I caught some flack in another thread for suggesting the average homeowner doesn't always feel they get a commensurate value for a 3% listing fee . But for an investor, I think you have it wrong. While your numbers work for a one time transaction, they might not be as pretty as they could be across many transactions.
What if your listing agent also did much of the legwork on your rehabs? Issues like meeting the well/septic/propane company at the property, finding and scheduling a landscaper, the flooring choice, make keys, develop the reno plan, finishes, what to do about this issue or that? Many agents will gladly fill that role for a steady source of listings meaning one less person to hire and/or more time freed to concentrate on acquisitions. If you're able to leverage that into greater deal flow then your one time Cash on Cash example is not nearly as impressive. Just a thought.
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
10y
@William Morgan or you can do what I do and for agents willing to do the work you describe not only do they get full commission but part of the profit.
I closed one last week the agent got full commish on a 280k deal and a 38k bonus from me..
he found it he rehabbed it and resold it.. this is how you make money in this industry.. and how you get the deals you share the wealth.. I just sit at my desk in Oregon funneling funds to and fro.
this leaves me plenty of time to interact on BP and have almost 10k posts in a little over 2 years. and I am not a welcome wagon poster to puff up my numbers all my posts have some content some good some maybe not so good LOL
I have now determined this is my model going forward I will only fund real estate professionals..
My son went to school there you live in a very nice spot in the world.
Flipper/Rehabber · York, UK · Member since 2013 · 895 posts · 453 votes
10y
I recently saw a listing broker offer 2.8% commission except to Trelora agents who would receive $2500 which I thought was a fair tit for tat. Does Trelora even work with buyers? Our team will offer discounts when it makes sense to our valued repeat clients, but we don't cultivate business by discounting on price. I find it interesting that no one has any qualms asking a real estate agent to cut their "fee" when really they're asking them to reduce their paycheck. I always want to ask them what their response would be if someone walked into their their office and said "cut your paycheck in half if you want me to be your customer." Most agents I know are not rolling in dough, and yes a client might balk when they see a $12000 commission but it might be their only check that month, or their last one could have been $1200.
Wholesaler · Marietta, GA · Member since 2013 · 106 posts · 20 votes
10y
There's a brokerage in Atlanta that offers flat fee listings and buyer rebates. I think it's brilliant marketing. Like you said, @Herwin G., it makes you think twice. Isn't that the whole point of marketing? It gets attention. Whether or not their model works for you as an investor is up for debate (it doesn't work for me), but for the general population it works very well.
