Use a realtor with direct mail?

Question

I'm a newbie. I have started driving for dollars, and have a small list of properties I'm going to send hand written letters to. If I get a response and want to move forward with the purchase, I'd really like to work my realtor through the transaction. (I'm worried that I won't request all of the necessary information from the seller, ie: rent roll, bank statements, etc., or if I do acquire it, that I won't understand it; also that I won't be able to recognize what is normal/laziness versus sketchy.)

Is it appropriate to use my realtor on any leads that I want to pursue? And if so, how do I state that in my letters so that it doesn't turn a seller off, yet gives them a heads up?

Thanks for any advice!

Amy

Mike Cumbie · Answer

I suppose to answer the actual question you asked:

Sure it's appropriate and smart especially if you are starting out. if you get a bite, just send your agent over and have them let the seller know they are working on behalf of you and you have their fee handled so it isn't part of the transaction.

Steve Vaughan · Answer

Sorry I didn't see this until Mr Jerryll tagged me.

Yes, you can definitely compensate your agent on the buy side of the settlement statement.   Most buyers, especially newer ones, don't have the extra $ to bring to the closing table so I didn't suggest it.  Good to see you are better capitalized than most.

The buyers of my FSBOs that have an agent always just increase their offer to cover the commission.  Basically financing that cost over the mortgage term.

Feel free to PM me if I can help further.  To tag or mention somebody, just use the @Their Name.   It works for most, but not android on the website for some reason.  Excited for you👍

Austin Andrews · Answer

Usually the seller pays the agent fees, which is why some decide to sell off market: to avoid those fees. You could state that you are choosing to use your realtor for the transaction, but that you are paying the commission and no commissions are due by seller. This could help, although you are now paying the 2.7% (or whatever negotiated buyers representation fee) to your realtor, so adjust for this in your offer price.

Blaine Alger · Answer

@Amy Martini

I would suggest not mentioning it at all and just say that your realtor is just your "partner" on the deal. I feel like if you were to try to explain the situation to the potential seller, it would just complicate the transaction and deter the seller. Of course, there will come a time during the process in which it might come up and at that time you can take the time to explain the situation to the seller, but hopefully you have already built up enough rapport with the seller and the deal is already approaching the finish line, so it won't be an issue.

When it comes to paying your realtor, just figure out an arrangement that will work best for the both of you and keep the seller out of the equation.

Keeping it as simple as possible is the best way to go.

Jerryll Noorden · Answer

I am no agent and I honestly know very little about it all, but correct me if I am wrong... you do need to disclose you are an agent... right?

I don't know if you have to disclose it upfront or not, BUT if you don't and someone reports you before you disclose it you can get in trouble.

So check your agent rules on that.

Jerryll Noorden · Answer

Hello  hello Amy.

Yes I have suggestions.

See I asked you these questonions as an attempt to help you arrive at your own logical conclusions. And I will keep at it. This way you don't just take randome advise from a stranger needing to have faith that said advice is actually sound.

So lets continue this. See this as me teaching you how to think "lead Generation" and "marketing".

So you decided dric=ving for dolalrs becaise the market is hot.

See... that is not a reason to do driving for dollars right?

"The market is hot" is a good reason to get int "investing", and buy houses, flip houses, wholesale contracts. Sure.

But the way you answered my quesiton, you are impying that if you want to be an investors you HAVE to drive for dollars.

And that is of course not true.

So again why did you decide to do driving for dollars, vs. Direct mail (don't do that), cold calling (don't do that), Bandit signs (definitely don't do that).

What I am suggesting here, is for you to pick a markeitng venue that makes logical sense.

None of the ones listed above makes any sense.

The first thing you need to do is be ready when a potential lead does hit you.

Mind you.. I said "Potential Lead". A lead is not a random person that may or may not sell their house to you. That is not a lead. All the houses you see on the road that are boarded up, are not leads. All the mailers you sent and the list you bought, are NOT leads!

A lead is when whom ever you reached is actually interested and motivated enough to sell their house (hopefully below market value)!

THOSE are leads.

So Your first step is prepare your self for when you DO get a lead. You need to be credible. Yes there are plenty of house buyers that are not a company and that are individuals that just flip.

If you think about it, your traditional home buyer that wants to buy a house doesn't have a website and is not working on their credibility.. right?

What makes us different? Well the traditional home buyer is backed up by a bank for funding, and banks are credible. So they (the buyer) don't need to be. But if you are going to position yourself as a cash buyer and that you are "local home buyers", you are putting it out there that you are a business. And in all honesty you are a business. You do this to make money, right? So you are a business period.

Without a website, you are not at all credible and you can forget it.

You need to get a good credible website and then do PPC /Facebook Ads, while you work on SEO.

I promise you if you do this right you will hit the ground running and there truly is no faster and more reliable way to become successful. I promise you that.

So again... why are you deciding to do DMM, Door knocking, Driving for dollars, cold calling, etc. etc. when NONE of these models filter or target motivated sellers. You are relying on pure luck to get a deal with these methods.

So again, why are you choosing these methods. If you can not convince yourself why "this" method is better for you to do than "that" method you are simply winging it.

So answer that question if you would, and lets see if your choices are sound ones!

Steve Vaughan · Answer

I'd definitely recommend having quality representation if you're new.

The lines get a bit blurred combining an agent and a FSBO of course.  When I sell FSBO, which is always, I offer at a no agents price, then just say to add to the offer any commission or seller assist.  Works great.

I wouldn't bring up that I have an agent on the first letter or first date if possible.  A lot of your target sellers like to be solo.  Right or wrong, they may feel like you're trying to get one over on them if rapport has not yet been established.

It will be easiest to have your agent paid at closing from seller proceeds.  Just make sure the seller knows your offer is 2.5% (or however much) higher than you would offer solo so they are informed up front. If the seller balks at the thought of any agent, you'll have to work out compensation outside of closing.   Maybe even payments?  Depends on your relationship and their broker. Good luck!

Amy Martini · Answer

Thank you Steve!! I was thinking along those same lines, but I never hear anyone talk about this situation, so that’s good to know this can be doable.

As to your recommendation about taking the commission out of the seller proceeds, why couldn’t the commission just be put on the buyer’s side of the closing statement? (Like as additional money to bring to the table.)

Also, could I contact with a couple follow up questions? Email or something? Thanks again!

Amy Martini · Answer

Jerryll -

I started driving for dollars because of the hot market we’ve been in. I’ve been looking for a property for a year using the MLS primarily, but the number of listings on market are very low, and when something does come on the market, it goes pending within a day or two. A lot of times I haven’t even gotten to see the house yet, or I get beat out in multiple offers. The last  one had 17 offers on! So that’s when I decided to try  to find a property OFF market, in hopes that I’ll find something I can bid on without the competition.I want to try written letters because I want it to feel personal. We bought our primary residence 2 years ago, was having the same issues with many multiple offer situations, I wrote 25 written letters, got 2 responses, and bought the one we now own. So I’m hoping that process could work again.

What do you think? Any other ideas? Thanks for responding!

Amy

Jerryll Noorden · Answer

Miss Martini,

Answer me this please.

Why.. What made you do driving for dollars?

And why are you going to send them hand written letters?

I am very serious with these questions. I really want to know in detail WHY EXACTLY you decided to chose those options...

GO!

Use a realtor with direct mail?

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