Wholesaler working with agents question

Rental Property Investor · Louisville, KY · Member since 2013 · 47 posts · 8 votes

In other podcasts and blogs it had been advised to network with agents to market for deals by asking them if they have any sellers looking to move a property quickly. My question is what if they do? How would a wholesaler take down a property with an agent involved using the standard wholesale model of "flipping" the contract and not actually closing on the deal using their own funds? Can this transaction be done in a traditional wholesale sense.

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Karl Krentzel

Real Estate Broker · Tucson, AZ · Member since 2012 · 410 posts · 337 votes

11y

Originally posted by @Dave Slaughter:

Well, as a licensed Realtor®/Broker and Investor myself, I can assure you, nothing is further from the truth! You absolutely CAN wholesale a MLS Deal. Please allow me to answer your questions I see...

Question: "How would a wholesaler take down a property with an agent involved using the standard wholesale model of "flipping" the contract and not actually closing on the deal using their own funds?"

Answer: The same way you would in any other transaction. If assignments are allowed in your State (most of them allow it) then you may simply assign the property. I write into my contract "Buyer reserves the right to lease, rent, repair, assign, or sell for profit."

When written into your additional terms of the State Contract, any written words that are agreed to by the parties are legally binding, and supersede the boilerplate language of the contract. (Basic contract law)

If your State doesn't allow assignments or makes them very difficult to do (Ohio) then you may still double close. You may use transactional funding, or hard money if that is your choice.

Many times a "wet" closing is required, (Meaning that you must bring your own money via transactional funding) and other times, you can do what is called a "Dry" closing. Meaning that you have no money of your own in the deal and you use your End Use buyer's money to close.

Question: "Can this transaction be done in a traditional wholesale sense."

Answer: Absolutely. In the case of flipping MLS Property; it is a question of the language that you use with the agent. In my Script book (Free) I have scripts available that you can use to deal with the agent..

Trust me. As an agent, I flip MLS property, and know PLENTY of other UNLICENSED who do too. How? Simple.

Not all homeowners want the most.
The value is, what the value is. The listing commissions are already figured into the deal.
If you negotiate aggressively (you can do this!) then you can find motivated Sellers on the MLS who will then be great leads for you.

Here is a horrible video I did a number of years ago and put on YouTube about a Short sale that was on MLS that I flipped with no cash, and no credit.

It was listed for $225,000, I bought it for $115,000, and sold it for $125,000 a few days later.

You can't say that you can't flip MLS properties because "the agent will stand in the way".

They didn't stand in the way when I made my $110,000 offer on a $225,000 fourplex.

In fact, they went in and got the deal done FOR me.

It's all in the way you do it!

Have a powerful Sales Day!

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Roland Paicely
Raleigh, NC · Member since 2011 · 721 posts · 343 votes
11y
Generally speaking, you will not handle this the same way as a 'normal' wholesale deal. Almost all (probably all) contracts with agents are non-assignable. There are a few ways to deal with this. One is to line up hard money and close on it yourself and immediately sell it to your end buyer.
However, unless you have some experience in wholesaling I'd advise not starting with this strategy.
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Brent Coombs
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
11y
Once it becomes apparent to your Agent that you are looking to get the Seller to accept your Offer "or Assignee" on the Contract, your Agent will be honour-bound to ask you to allow the Seller to deal directly with your "Assignee". And even if you or your Buyer won't allow that, that Agent has to ensure that the Seller gets the full price of the Contract agreement (ie. none of this double closing on the day stuff) but just less the agreed Agents Fee. If you can get your Agent to split the Fee with you because you are acting in the capacity of a (non-qualified?) Buyers Agent, good for you. [No legal advice given]...
Otherwise, what @Roland Paicely said! Cheers...
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Geoffrey F.
Real Estate Investor · Charlotte, NC · Member since 2015 · 29 posts · 15 votes
11y
I agree with both previous comments,
Most of the time a real estate agent will not understand you as a wholesaler or do not believe it's legal practices, therefore killing the deal. Do the research, anything is possible will a little skill and will. Good luck
2 Reply
Karl Krentzel
Real Estate Broker · Tucson, AZ · Member since 2012 · 410 posts · 337 votes
11y
Originally posted by @Dave Slaughter:

In other podcasts and blogs it had been advised to network with agents to market for deals by asking them if they have any sellers looking to move a property quickly. My question is what if they do? How would a wholesaler take down a property with an agent involved using the standard wholesale model of "flipping" the contract and not actually closing on the deal using their own funds? Can this transaction be done in a traditional wholesale sense.
Well, as a licensed Realtor®/Broker and Investor myself, I can assure you, nothing is further from the truth! You absolutely CAN wholesale a MLS Deal. Please allow me to answer your questions I see...
Question: "How would a wholesaler take down a property with an agent involved using the standard wholesale model of "flipping" the contract and not actually closing on the deal using their own funds?"
Answer: The same way you would in any other transaction. If assignments are allowed in your State (most of them allow it) then you may simply assign the property. I write into my contract "Buyer reserves the right to lease, rent, repair, assign, or sell for profit."
When written into your additional terms of the State Contract, any written words that are agreed to by the parties are legally binding, and supersede the boilerplate language of the contract. (Basic contract law)
If your State doesn't allow assignments or makes them very difficult to do (Ohio) then you may still double close. You may use transactional funding, or hard money if that is your choice.
Many times a "wet" closing is required, (Meaning that you must bring your own money via transactional funding) and other times, you can do what is called a "Dry" closing. Meaning that you have no money of your own in the deal and you use your End Use buyer's money to close.
Question: "Can this transaction be done in a traditional wholesale sense."
Answer: Absolutely. In the case of flipping MLS Property; it is a question of the language that you use with the agent. In my Script book (Free) I have scripts available that you can use to deal with the agent..
Trust me. As an agent, I flip MLS property, and know PLENTY of other UNLICENSED who do too. How? Simple.
- Not all homeowners want the most.
- The value is, what the value is. The listing commissions are already figured into the deal.
- If you negotiate aggressively (you can do this!) then you can find motivated Sellers on the MLS who will then be great leads for you.
Here is a horrible video I did a number of years ago and put on YouTube about a Short sale that was on MLS that I flipped with no cash, and no credit.
It was listed for $225,000, I bought it for $115,000, and sold it for $125,000 a few days later.
You can't say that you can't flip MLS properties because "the agent will stand in the way".
They didn't stand in the way when I made my $110,000 offer on a $225,000 fourplex.
In fact, they went in and got the deal done FOR me.

It's all in the way you do it!
Have a powerful Sales Day!
9 Reply
Brent Coombs
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
11y
@Karl Krentzel When I become a Seller, I will NEVER use an Agent who believes "Not all homeowners want the most"; (and I would not suggest anyone that they put that as the answer to any question when they are attempting to become a licensed Realtor)!...
1 Reply
Karl Krentzel
Real Estate Broker · Tucson, AZ · Member since 2012 · 410 posts · 337 votes
11y
Originally posted by @Brent Coombs:

@Karl Krentzel When I become a Seller, I will NEVER use an Agent who believes "Not all homeowners want the most"; (and I would not suggest anyone that they put that as the answer to any question when they are attempting to become a licensed Realtor)!...
@Brent, that's ok. When I sell as much as I do, I don't worry about that. The reason why I say that is because what a Seller wants is their home sold. Not "the highest price it will never sell for."
I always ask my seller the following question... which is more important... that you Sell your home, or that you get your highest price.
Doubtless of your personal experience, after 18 years as a Broker, Investor, and Realtor®, I can assure you... when you generate, you won't have to tolerate the nonsensical, emotional, idiotic Seller.
Have a Powerful Sales Day!
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Karl Krentzel
Real Estate Broker · Tucson, AZ · Member since 2012 · 410 posts · 337 votes
11y
Coincidentally, the question was NOT About being a listing agent, trying to get the Seller the most amount. The question was with regards to "Can you flip MLS Property?"

The answer is an emphatic yes.
It is not my problem as an agent working for myself if a Seller has a weak agent who cannot defend his/her interests.
I am a shark in the negotiation chair, and the example above is a simple examination of that.
If you hire a agent to defend your interests, then by all means... go right ahead and direct them to get you the most possible. You wouldn't be the guy I would be looking for anyway.
The guy I am looking for must sell now, and doesn't need the most. The example above shows EXACTLY why, and how that argument that the "Seller always wants the most" is a nonsensical argument.
Again... Have a Powerful Sales Day!
1 Reply
Ryan Dossey
Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes
11y
Some people I know who utilize a strategy such as yours are people who will buy the home cash themselves then sell it right away. Not a double closing but actually using your own funds.
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Brent Coombs
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
11y
@Karl Krentzel I read somewhere:- "If you are looking to pick up a (HAFA program) short sale at 50 cents on the dollar, you can unplug your computer right now. Flippers or wholesalers need not apply. Because of increased lending regulations, it is nearly impossible"...
I most certainly agree with Regulators trying to ensure that short sales occur at minimum subsidisation by the Government. Karl, it is obvious you are trying to "get around" those Regulatory intentions (by latching onto that word "nearly"), and not only that, but you are also training others to do the same, and if I am not mistaken, somewhere down the track you will hope to be PAID to train others in how/where to to circumvent those same Regulatory intentions (if you're not ALREADY putting yourself up as the next "Pay-me-to-help-you" Guru)!
Well at least you know what you are:- "shark"! Cheers...
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Dave Slaughter
OP
Rental Property Investor · Louisville, KY · Member since 2013 · 47 posts · 8 votes
11y
Wow! Great discussion and thank you for the answers provided. I have some investor friendly Agents that know my strategy just wondered how the mechanics of the transaction using an Agent would work.
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Karl Krentzel
Real Estate Broker · Tucson, AZ · Member since 2012 · 410 posts · 337 votes
11y
Originally posted by @Brent Coombs:

@Karl Krentzel I read somewhere:- "If you are looking to pick up a (HAFA program) short sale at 50 cents on the dollar, you can unplug your computer right now. Flippers or wholesalers need not apply. Because of increased lending regulations, it is nearly impossible"...
I most certainly agree with Regulators trying to ensure that short sales occur at minimum subsidisation by the Government. Karl, it is obvious you are trying to "get around" those Regulatory intentions (by latching onto that word "nearly"), and not only that, but you are also training others to do the same, and if I am not mistaken, somewhere down the track you will hope to be PAID to train others in how/where to to circumvent those same Regulatory intentions (if you're not ALREADY putting yourself up as the next "Pay-me-to-help-you" Guru)!
Well at least you know what you are:- "shark"! Cheers...
Actually, thanks for the sarcastic compliment.
The hard reality is that in that video, I openly disclosed to the bank, the seller, their agents, the buyer, my broker, and Jesus Himself that I was going to IMMEDIATELY Flip this property.
At that time, Greentree (who owned the note, a smaller company) did not have restrictions as they do now.
In fact, as an REO Agent, a Short Sale Expert with over 15 years in the Bank Resale business and 18 years in general residential sales I am fairly confident that I needn't worry about losing my license.
What you may have "missed" in the video, as well as the subsequent conversation was.. and is still...
CAN YOU FLIP A MLS DEAL?
The answer is, yes.
Some have said, "the listing agent is only interested in the highest price possible"
Which is FALSE.
To demonstrate that, I showed not only a FLIP of a MLS that was a Wholesale deal, and it just so happened that I bought it at 50 cents on the DOLLAR with ALL the Parties KNOWLEDGE And Approval.
If a Bank Signing off on it, a Broker with over 37 years experience signing off on it, and three agents who were involved signing off on it, and a SELLER signing off on it...
THEN You might have an argument.
However, You do not.
I do not teach people to ignore the law. Nor do I teach them to use questionable techniques to "make money quick."
What I do teach them is how to use Sales Skills (you know... the old fashioned stuff). To close deals.
I have the experience (75 deals a year alone) I have the coaching skills (400 podcasts, over 75 videos on SellMoreHomesNow on Youtube) and moreover, the fans who believe me. (over 1900 in a private Facebook Group called The Red Pill Investor)
Every one of my techniques, and tactics have been reviewed by my brokers, and my attorney. You can't say, they are illegal... especially if you haven't read ANY of my books, or watched a single video, or listened to one podcast.
Take it from a licensed Broker who knows... unless you are an agent who has done it... then you clearly are out of your element.
Have a powerful sales Day!
1 Reply
Karl Krentzel
Real Estate Broker · Tucson, AZ · Member since 2012 · 410 posts · 337 votes
11y
Matter of fact... Now that I think about this... I am going to make my 400th Podcast today...
In honor of this question.... It will be entitled...
"How to Flip The MLS Deal!"
Thanks for the idea!
Have a Powerful Sales Day!
0 Reply
Brent Coombs
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
11y
@Karl Krentzel Thanks for that update. The main thing I have taken away from your comments is "At that time, Greentree (who owned the note, a smaller company) did not have restrictions as they do now". Made me wonder:- why did those restrictions kick in?...
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Karl Krentzel
Real Estate Broker · Tucson, AZ · Member since 2012 · 410 posts · 337 votes
11y
Originally posted by @Brent Coombs:

@Karl Krentzel Thanks for that update. The main thing I have taken away from your comments is "At that time, Greentree (who owned the note, a smaller company) did not have restrictions as they do now". Made me wonder:- why did those restrictions kick in?...
There is no question that the ability for investors to "flip" short sales has rapidly closed. It is still possible to do, however, it requires the areas of real estate that I am not willing to venture in. (*i.e. trusts. etc)
To answer your question simply, I believe that (again, as an REO Agent, and Short Sale agent for multiple banks) the reason why you are unable to "flip" the short sale is because the banks have made it illegal through lobbying (in FHA's case); and deed restrictions in others.
Why Flipping Short Sales Stinks
The rationale is clear. If they are "taking a 100k haircut" in the loan, it isn't "fair" for me to make a 10k profit by them doing so. That however, is not my concern, nor my obligation to protect them from themselves. They have an agent for that.
As you can clearly see by observing the video, The Seller was clearly represented by another company. Thereby eliminating any sub-agency claims.
There was no commission taken on my part. Thereby eliminating any co-agency claims.
The act was disclosed in the contract as a potentiality.
When it becomes a reality, instead of a potentiality, I disclosed the matter as such.
So you see, in the end, their choice (at that time) was to allow that transaction to occur. I did not tell them not to.
Consequently, if it were not a short sale, the result would be the same.
As a Principal to the transaction (not an agent for either party) I can act on my own accord, and with my own interests as outlined within the National Association of Realtors® Code of Ethics Article 4.
Don't Forget MIP
If the complaint is about how I made 10k because a Bank had a nonperforming loan for 225k which they willingly sold at a loss, then "don't cry for me Argentina..."
That's why they have Mortgage Insurance. If they change the rules (which they did) you move on.
That's why I don't bother with short sales. However, there are still vast swaths of motivated Sellers who are awaiting your call. It is money on the table... question is...
Are you going to take it?
Thank you for your vigorous defense of what we all agree is possible.
I have enjoyed it so much that I gave it the honor of being my 400th Podcast! How To Wholesale an MLS Deal!
Have a Powerful Sales Day!
0 Reply
Brent Coombs
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
11y
@Karl Krentzel As far as I can tell, all you needed to say to this thread was:- "When I buy off the MLS I am NOT utilising my Realtors license and am NOT getting ANY commission from the either the Sale TO me, or the subsequent Sale BY me. In those instances I am ONLY acting in the capacity of a Wholesaler, and my license in those cases is totally irrelevant! And where the MLS Agents don't allow Assignments, I arrange a double close after I have finished with the Selling Agent, who can go on thinking that I am the actual Buyer - Ha Ha Ha - I showed him"!
I am curious though, if Greentree had come to you to be the sole listing Agent for that same property in the first place - would you have felt ethically bound to treat the sale to your buyer any differently than you did? Cheers...
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Karl Krentzel
Real Estate Broker · Tucson, AZ · Member since 2012 · 410 posts · 337 votes
11y
Originally posted by @Brent Coombs:

@Karl Krentzel As far as I can tell, all you needed to say to this thread was:- "When I buy off the MLS I am NOT my Realtors license and am NOT getting ANY commission from the either the Sale TO me, or the subsequent Sale BY me. In those instances I am ONLY acting in the capacity of a Wholesaler, and my license in those cases is totally irrelevant! And where the MLS Agents don't allow Assignments, I arrange a double close after I have finished with the Selling Agent, who can go on thinking that I am the actual Buyer - Ha Ha Ha - I showed him"!
I am curious though, if Greentree had come to you to be the sole listing Agent for that same property in the first place - would you have felt ethically bound to treat the sale to your buyer any differently than you did? Cheers...
Great question @Brent....
Two thoughts come to mind from your statement that explains why.....
First Incorrect Assumption
First, your statement that "all you needed to say to this thread was:- "When I buy off the MLS I am NOT utilising my Realtors license and am NOT getting ANY commission from the either the Sale TO me, or the subsequent Sale BY me. In those instances I am ONLY acting in the capacity of a Wholesale..." isn't really true, nor what I teach.
In this capacity, even though you are not acting as a licensee, you are STILL a licensee, and must (according to numerous State, and Federal laws, as well as the National Association of Realtors® if you are a Realtor®) disclose the fact that you are a licensee.
It's not true, nor what I teach because you do not know for a FACT that you are going to wholesale the deal.
I prefer to keep my options open. I've joint ventured with others to repair and sell later, I've rented them out, I've bought them for myself, I've wholesaled them.... Therefore to say that "I am only acting in the capacity of a wholesaler" is not really true..
Second Incorrect Assumption
The second assertion that you make "and my license in those cases is totally irrelevant!" again is ill informed.
If you were a Realtor®, you would instinctively know that the statement that your "license" is irrelevant is categorically untrue. Ask the literally hundreds of agents in prison for offenses related to real estate.
The reason why it IS relevant is that you are held to a different standard... Like it or not.
What IS relevant is the fact that, regardless of your personal feelings towards agents who invest or wholesale... the State holds us to a higher standard.
We are punished more severely for "screwups" and the potential that you have as a licensee is greater than the general wholesaler.
The Ethics Question About Listing
To answer your question.... "if Greentree had come to you to be the sole listing Agent for that same property in the first place - would you have felt ethically bound to treat the sale to your buyer any differently than you did?"
I've been in that situation. Both as a Short Sale agent, as well as a REO Broker for over 15 years. Would I felt ethically bound to treat the sale to "my Buyer" any differently than I did? That assumes a few things.
First, It assumes that I would have used the listing agent to represent me. Which I did not. l represented myself (with again, that nascent, irrelevant license you discussed earlier)
However, to answer your question more directly... My obligation as a listing agent is to do one thing, and one thing only. Sell the home. If I can close the property for the most money possible, then great. However, the main goal is to sell the home.
My job as a listing agent is to present all offers. If someone had offered 110k on my 225k listing (as I clearly did) then obviously, I would ask questions. I would have asked to see proof of funds, (which they did) and then call the POF to see what sort of POF it is (which they did not.)
If I had discovered that the buyer's POF was transactional funding, then I would have mentioned it to the Seller at the time they were signing the contract. That's my job.

What the Seller chooses to do is up to them. However, one critical piece that you are missing in this story that makes it very difficult for you to understand this....
As a Listing agent... my job is to protect the SELLER.
The Bank... is NOT the Seller in a short sale. Therefore, the listing agent's job is NOT to protect the BANK's interest... but the Sellers.
If the Seller is facing imminent foreclosure (as they were) and were well over 100k over the market value (as they were) then answer me this...
What do YOU think would have been the most likely outcome of that scenario had I NOT made the offer?
Occam's Razor and Ethics
Don't get hung up on the "ethics." When a ready, willing, and able Seller meets a Ready Willing and Able buyer, magic happens. Especially when everything is done above board, disclosed, and with the safety of Agents on ALL parts.
Agents who represented the Seller, Agent who bought the property (me) and Agent who represented the end use buyer (who bought it from me at 125k)
And if your argument is "oh we got one over on the Agent... tee hee.." then that is truly a juvenile approach towards business.
You don't last 18 years in this town by screwing over agents. You don't last 18 years in this business by lying. Best part of all... you don't have to be afraid to share it on the Internet and YouTube as I have when you do it legally.
Agent Protection for Sale
In short... My protection, fiduciary responsibility and ability as an agent is up to the highest bidder.
If a Bank pays my commission to protect them, then you bet, I will find out about your Transactional Funding POF and make your life hard. That's my job.
If it's my job as a buyers agent, then to me, a POF that is transactional funding is just as good as gold. Doesn't mean that you will get all my time. Just means that you've crossed ONE step.
Listen, I appreciate you trying to poke holes in this transaction.. trying to point out flaws, critical errors in judgement, or perhaps legal reasons why that deal is illegitimate.
Show And Tell
While I understand that video sucks... I did it on the spur of the moment trying to teach someone how to do it.
If you don't like my videos about how to flip MLS property, then perhaps you could show me some of yours?
0 Reply
Brent Coombs
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
11y
@Karl Krentzel Thank you for that entertaining and thoughtful response. I am very please that you keep in mind at all times that "the State holds (you) to a higher standard (than mere Wholesalers)". What I was mainly getting at is, when you are coaching others about conducting similar transactions - it wouldn't matter whether THEY are licensed or not!
But is the State (and all Sellers who come to you to list their homes because "as a Listing agent (your) job is to protect the SELLER") aware that your mantra is "My obligation as a listing agent is to do one thing, and one thing only. Sell the home. If I can close the property for the most money possible, then great. However, the main goal is to sell the home"??? Is everyone reading this, soaking it in?
When I asked you earlier about how you might have treated this transaction (ethically) differently if you were the listing Agent, I in fact WAS referring to you being asked to list on on behalf of the Seller (I could care less about the Buyer - they have to do their own diligence). Isn't it true that if you could find a Buyer who would pay $125k (which you did) you would have been BOUND to let that Buyer sign directly with the Seller (who was already going to pay you an agreed Commission to find them that Buyer). Where I think you stepped over the line (and where the ACTUAL listing Agent failed in their duty to the Seller) is when you realised that you WERE going to Wholesale it - even though you might not have known that in the first place - you SHOULD have then acted like a Buyers Agent with the intention of splitting the Commission Fee with the listing Agent so that THEY could arrange closure of the 1x Contract between Seller and end Buyer. Otherwise, this is what you did:- "oh we got one over on the Agent... tee hee.." And I agree, that IS truly a juvenile approach towards business...
1 Reply
Karl Krentzel
Real Estate Broker · Tucson, AZ · Member since 2012 · 410 posts · 337 votes
11y
@Brent Coombs easily answered, and requires effortless thought.
1. I didn't make it up. It's the law. Check your local regs and rules if you disbelieve. The damages for licensees who misrepresent the true value of the home in a real estate transaction in which they act as a principal are treble damages in Arizona. I know we aren't the most progressive State, so I am fairly certain that the damages are likewise the same wherever you live.
2. In the event that IF I was the listing agent, THEN my obligation is to sell the home. "Soak it in" if you will. But I did not say "By any illegal means necessary." This is why some people make horrible agents. Tell me... how much value does a home have that NEVER Sells?
3. As I was not, am not, and do not take listings on my own behalf anymore, I am free from the constraints of Agency. (Which is what we as agents are held to a higher standard as).
4. As a point of education Dear Sir... The reason why Agents are "held to a higher standard" than that of the "lowly Wholesaler" has nothing to do with their education or "lesser status." By no means!
No, what separates the licensed from the unlicensed is the concept of Agency, which Agents (hence, Agency) must adhere to. Wholesalers are not taught about, nor expected to act in any fiduciary way.
Try as you might, agents like myself can, and do act on my own behalf using the sales skills that I've honed over 18 years.
It is ridiculous to believe that I.. as a licensed Broker with over 18 years experience negotiating both Bank, Short Sale, as well as Investor deals... seeing what I've seen, and knowing what I know... to NOT wholesale.
Any thought that I should be held to some "jeez, you should be worried about the Seller" sentiment is better left for the National Association of Realtor® commercials.
If I am hired as a listing agent, then fine. I will fight tooth and nail for every dime that Seller can get, without reasonably stopping the sale. Morons will fight over 1000 dollars and lose the entire deal.
If you aren't fond of my teaching style, that's cool. Just know this...
I am a representative of a entirely new breed of agent. Agents who wholesale, use Sales Skills, and don't fighting a bit to get it!
See you in the field!
0 Reply
Brent Coombs
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
11y
@Karl Krentzel Thanks again. Let the readers decide whether you or I or both or neither have the correct viewpoints. But I really do want you to answer this: did you close with your Buyer without having any skin in the game yourself regarding that transaction? In which case, did both you AND the Listing Agent get their Commission and Fee? And did that mean that the Seller received less than they would have if you had (using Agents ethics) properly re-represented yourself in this case as a Buyers Agent in the transaction (ie. How much would the Seller have received if they had been able to do the agreement directly with your Buyer ($125k less Agents Commission - split between you and the Agent)?...
0 Reply
Karl Krentzel
Real Estate Broker · Tucson, AZ · Member since 2012 · 410 posts · 337 votes
11y
Ok, as simply as possible.....
a. The home was listed with agent a.
b. I am agent B... operating on my own behalf. Disclosing to seller that I do not represent them. Reserving the right to lease, rent, assign, repair, or sell for profit.
c. Subsequent to the time of Short sale approval letter.. (in other words AFTER the Bank approved the offer of 115k) I located a BUYER on my own behalf who was represented by another agent C.
d. Agent C received a commission. Which I paid. To represent her end use buyer D.
e. I did not receive any commission... instead.. my income was derived from the difference of the price I purchased it at, vs. what I sold it at.
Your question is illogical, because it assumes several things that are not true.
1. "did you close with your Buyer without having any skin in the game yourself regarding that transaction?" Depends on what you call "Skin in the game''. I had a $500 earnest money check, and transactional funding. That's about as real as it gets.
2. "in which case, did both you AND the Listing Agent get their Commission and Fee?" The listing agent received their commission, the buyer's agent received their commission, and I received the proceeds from a sale.
3. "And did that mean that the Seller received less than they would have if you had (using Agents ethics) properly re-represented yourself in this case as a Buyers Agent in the transaction" This is an illogical question entirely because why on earth would I represent the BUYER on a HOME I have under contract for purchase? That's like buying a car from the dealership, and then finding a friend who would pay more, back out of your contract and then let the dealer sell it to them... that's ludicrous.
At no time, was I ever representing the End Use Buyer. They had their OWN agent for that.
4. "(ie. How much would the Seller have received if they had been able to do the agreement directly with your Buyer ($125k less Agents Commission - split between you and the Agent)?..." At the risk of sounding contentious... or condescending... on what planet are you aware of where the OWNER of a Fourplex that is a SHORT SALE will make ANY proceeds AT ALL?
You see, I'm not trying to be arrogant here... but this is where you are missing the ENTIRE point.
The homeowner would NEVER have made a PENNY on that sale...
NO MATTER WHAT.
As a short sale, if the Bank has to forgive 145k on the loan to sell it to me at 110k, do you honestly think that they will let poor Mr. Seller walk away with a single dime?
Nope.
Not on this planet, or any other.
That's why I said then, say now, and will say again if asked.. this was a unique situation where unique factors came into play that would make this seem as an otherwise impossible situation.
The takeaway is simply this...
If I could "Flip" or Wholesale a Property that was ON MLS, at 51% of the market value on MLS, that was a Short sale, that was listed by an agent, and sold to an agents clients...
ALL those factors aside... It was STILL done.
To say that it "can't be done" or is "too dumb to try" is utter nonsense; and should be recognized as such.
I'm sorry if my successful story was not sufficient for your inquisitive mind. I am no longer interested in continuing this dialogue with you. The facts are out there for all to see, and now I simply perceive you as one who is trying to troll.
Have a Powerful Sales Day.
2 Reply
Brent Coombs
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
11y
@Karl Krentzel Thanks for the update and your personal details regarding that transaction. Regarding your "skin in the game" (yes, I mean NON-refundable cash) I would guess that the commission you paid to the end Buyers Agent was NOT that $500 earnest check? But rather, you paid them out at the double close (ie. THEIR commission was not part of your skin in the game)? I am also guessing that even your $500 check was refundable if the end deal went south (ie. NO skin in the game after all)? Your analogy about a Car sale is completely irrelevant (yes, I am using that word again) because HERE we are dealing with the ethics of AGENTS (which ethics should be no different in any RE transaction they are involved with than if in fact they WERE the Agent acting on behalf of the Seller - you've boasted about have such ethics too)!
And with my use of the word Owner/Seller in relation to this transaction, I also include the Mortgage Holder/s - so the Selling Agent HAS to ensure that their Client (Seller/Owner/Lender) gets Maximum available return (and if you are an Agent who has the required "bird in the hand" that the Agent is looking for and is being paid by their Client to find, your ethics should be obliging you to help THAT Agent meet their obligation! But as I see it, you didn't. No correspondence needed. Cheers...
0 Reply
Brent Coombs
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
11y
(My update above chopped off, but is as follows)...To be clearer: - so the Selling Agent HAS to ensure that their Client (Seller/Owner/Lender) gets Maximum available return (and if you are a licensed Agent who has the required "bird in the hand" that the Listing Agent is looking for and is being paid by their Client to find, your ethics should be obliging you to help THAT Agent meet their obligation)! But as I see it, you not only didn't help that Listing Agent, but hindered them in performing their job (because you wanted the outcome that resulted in the most profit for YOU, which was not attainable if you were to allow the Listing Agent to close the deal directly with your end Buyer ie. not a double-close)! Have a Powerful Ethical Day...
0 Reply
Brent Coombs
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
11y
(Again, my update got chopped off. Here it is again)... Of course, I acknowledge that I am not privy to EVERY factor involved in that transaction, and I most certainly apologise if I appear to have misrepresented you in any way, but I am addressing the PRINCIPLE of multiple Agents getting involved with what should be a ONE Sell/Buy transaction, whereby the Seller then gets LESS than End-Buyer Sale price minus agreed Agents Fee (in this case, the Seller probably(?) got LESS than: $125k less contracted Listing Agents Fee), and Regulators and good Listing Agents want to know, Why?!...
0 Reply
Karl Krentzel
Real Estate Broker · Tucson, AZ · Member since 2012 · 410 posts · 337 votes
11y
Oh my God... this is becoming too painful to explain.
I cannot explain basic Contract law, nor Agency Law to an unlicensed person in 140 characters or less.
If you want an education about how it works, go to school
AGAIN... in THIS situation... there is ZERO proceeds that the seller will ever make in a Short sale. The BANK is the one who "lost" the income.
Now before you go off on a tangent... understand the bank did their own due diligence, and their own BPO's as well as appraisals. THEY know exactly what they are doing.
If you think that in a mythical situation where I would represent the buyer or seller in a transaction etc. and would I let them get screwed over etc.... Then you are clearly mistaken.
That is why I do not take listings myself, nor represent many buyers. Why?
Because when you've sold 75 homes in a single year by yourself (not all that impressive)... you don't need to listen to the nonsense that the unlicensed principals (such as yourself) have to say about your business practices.
So long as the State of Arizona, the Federal Government, and the NAR say that Agents can wholesale, then I'm gonna wholesale and rehab, and landlord. Why?
So I don't have to deal with consumers who think that my ONLY function in this world is to serve at the beck and call of them and their petty nonsensical thoughts....
Again.... Go to school. You will understand how it all works.
1 Reply
Karl Krentzel
Real Estate Broker · Tucson, AZ · Member since 2012 · 410 posts · 337 votes
11y
Originally posted by @Brent Coombs:

@Karl Krentzel Thanks for the update and your personal details regarding that transaction. Regarding your "skin in the game" (yes, I mean NON-refundable cash) I would guess that the commission you paid to the end Buyers Agent was NOT that $500 earnest check? But rather, you paid them out at the double close (ie. THEIR commission was not part of your skin in the game)? I am also guessing that even your $500 check was refundable if the end deal went south (ie. NO skin in the game after all)? Your analogy about a Car sale is completely irrelevant (yes, I am using that word again) because HERE we are dealing with the ethics of AGENTS (which ethics should be no different in any RE transaction they are involved with than if in fact they WERE the Agent acting on behalf of the Seller - you've boasted about have such ethics too)!
And with my use of the word Owner/Seller in relation to this transaction, I also include the Mortgage Holder/s - so the Selling Agent HAS to ensure that their Client (Seller/Owner/Lender) gets Maximum available return (and if you are an Agent who has the required "bird in the hand" that the Agent is looking for and is being paid by their Client to find, your ethics should be obliging you to help THAT Agent meet their obligation! But as I see it, you didn't. No correspondence needed. Cheers...
1. Your definition of "skin in the game" is the most nonsensical thing I have EVER read.
A full 95% of ALL property sold in the US is sold with refundable EMD. So to say that it isn't any "skin in the game" is effectively saying all 95% of the homes in the US that are sold are sold "without skin".
I needn't remind you how patently absurd this is.
2. With respect to Agents/Agency/ and Ethics.... You use the Seller interchangeably with Bank. Again, that is NOT my position. As you clearly did not watch any of the videos, or read any of my posts apparently... let me try to "wake you up" to one SALIENT FACT.
AS I WAS NEVER REPRESENTING THE BANK I HAVE NO OBLIGATION TO GET THE SELLER ANYTHING. PERIOD.
I DO NOT KNOW ANY OTHER WAY TO PUT IT... APPARENTLY ENGLISH IS NOT YOUR FIRST LANGUAGE.
Buyers (Agents or not) are NOT responsible for the Seller's Bottom Line. That is THEIR Agents Job.
Unless you can get past THIS VERY BASIC Concept of agency, you will never understand it.
3. As a BUYER... without ANY obligation to the Seller or the bank... I can buy it for ANY Price they agree to.
4. As a SELLER.... I didn't have a GUN to their head. They made the choice.
5. As a Bank... they had 4 months to evaluate, and try to get another offer. They couldn't.
6. The ENTIRE TIME... their home was on the market while my offer was being reviewed. NOT ONE SOUL made an offer. Just mine.
7. You may be of the opinion that I as an agent have mystical powers to use Jedi Mind Tricks to confuse, or otherwise fool their 2 listing agents, the Seller, and the Asset Manager at the bank. While I appreciate the vote of confidence, I can assure you... No Jedi Mind Tricks were used.
8. Until you know how Agents, and Agency works, (along with short sales) which you clearly do not know.. may I suggest respectfully that you sit on the sidelines and learn something?
0 Reply

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