All Forum Posts by: Rodney Lorenzo
Rodney Lorenzo has started 15 posts and replied 118 times.
Post: Buying without an agent
- Posts 119
- Votes 45
Quote from @Lynn McGeein:
If you're under an exclusive buyer broker agreement, you really should inform listing agent upfront that you're under contract with a buyer broker. It's usually in your exclusive buyer broker agreement that you will pay their commission if it's not paid by other side, usually even with FSBO's, so be careful that you're not hurting yourself there. If you're not under an exclusive buyer broker agreement, then perhaps dealing with listing agents directly can help. I have dealt with investors who contact me directly and choose not to use an agent to represent them (sign the unrepresented agreement before I show it), and my broker will on occasion allow a reduction of commission if it warrants it on a case-by-case basis, especially all cash, quick close, and buyer knows what they're doing so I don't have to work for them. If I have to actually work both sides (first-time buyer, for example) or buyer wants designated representative from my firm, then no reduction.
Post: Buying without an agent
- Posts 119
- Votes 45
Interesting you say that, because before being represented, I did make an offer through the seller's agent and knowing that she would've kept the full commission, you'd think she would get me to make a stronger offer than the one I made, but she didn't. Agents are doing the bare minimum these days. There is a form in CT (the market I'm targeting) that you sign, that tells you if the offer has been seen. An agent who looks out for his client would provide such a form to a buyer that's struggling to land deals. Again, my issue is with the listing agents refusing to communicate with my agent, thus, keeping me from making offers on other properties. I have no control over their lack of communication, especially when I can't even speak to them. BTW, everyone's paying over the asking price in this market. It's the only way you can make a stronger offer, because yes, I do have to finance and I do have to have contingencies in place.
Post: Buying without an agent
- Posts 119
- Votes 45
Quote from @Russell Brazil:
Every unrepresented buyer that buys my listings absolutely pays more for that property than if they had an agent. In fact 100% of the time the unrepped buyer is the high bid, I counter them even higher for 2 reasons. 1) I know they are still going to go higher when they are unrepresented. 2) So when someone comes bitching that I double ended the deal, Im able to show that I didnt make it smooth sailing for the unrepresented buyer, we in fact negotiated them even higher up in price.
Post: Buying without an agent
- Posts 119
- Votes 45
I have tried already what you suggested. I can do the numbers without financials, but I also know that some listing agents hold them for either their favorite buyers OR they just have an unorganized seller that doesn't keep records of anything. I once even had a listing agent (before I got representation) not even suggest I make a strong offer, knowing full well she would've gotten the full commission if my offer was accepted. Isn't it their job to get the buyer to make strong offers, especially when they're also representing the seller? Well she didn't and my guess was because this was in Little Poland and my last name isn't Polish. Yes, believe it or not, discrimination does occur quite frequently in this business and people from certain demographics only like to do business with their own kind. No one ever talks about it though.
Post: Buying without an agent
- Posts 119
- Votes 45
Quote from @Scott Trench:
I would not recommend investing without an agent, especially on your first few deals. The process of closing could be difficult or overwhelming.
I'll offer a few suggestions that may be of use:
1st: Get really clear on a good deal through a process that helps you define "good" without needing all this detail from the listing agent. Go back in time and look at all the properties that have sold in the last 90/180 days. Then, identify the top 10 properties that you would have bought, if you were given the chance. Once you have this, write down what makes them good deals, and put together criteria for property you will offer on, if it hits the market in the future. You don't need the financials to know what market rents should be and to make very educated guesses about how the property would perform under your ownership. Who cares what current rents and expenses are if you plan to hold long-term, and know what rents should be?
When the properties you know are winners hit the market, don't spend a lot of time on due diligence - you've already done it. Ask for very basic information from your agent (on the buy side, have them call the listing agent), and be ready to make an offer same day or next day when they hit the market.
This is how you react appropriately to market conditions, and use your agent to great effect - they should be sourcing these deals, and alerting you the moment they hit the market, with an offer ready to go. You should likely not be contacting the listing agent directly.
2) If you want that extra edge that comes with not using an agent, go through the process of getting licensed. It's not that expensive or time consuming (will take a few weeks of concentrated effort (maybe a month or two) and maybe $1500- $2000. You will then be able to hang your license at a brokerage that can help with the mechanics of closing.
Then, you can either get paid the commission directly, or give it to the seller (NOT the listing agent) to make your offer more attractive. The seller is the ultimate decision maker, not the listing agent.
Post: Buying without an agent
- Posts 119
- Votes 45
Unfortunately, I have no control over incompetent listing agents that don't know how to communicate. There aren't that many good deals for me out there where the numbers work for me, so when I get my offers ignored, it doesn't make me happy. Having an agent when most listing agents refuse to co-broke is also out of my control. All I know is that if the listing agents was to represent me, they would be more hesitant in ignoring my emails, texts and offers. It's just the way it is in my market and I have no intention in letting incompetent listing agents impede my investment journey. Would you?
Post: Buying without an agent
- Posts 119
- Votes 45
Despite me having a good agent, I still have not been able to invest in anything in this market. The main factor, unfortunately, has been listing agents that don't communicate, aren't transparent or flat out ignore my offers or requests to get financials. Sometimes, I have to reach out to listing agents directly because I notice that they respond quicker to me than to my agent. They think I'm not represented. My question would be then: should I just approach the listing agents directly for representation? Many tell me that the listing agents don't have any incentive to represent me. The fact that they don't need to split their commission is an incentive enough, right? One even told me over the phone that they don't need other agents to sell their properties. He was nice to a certain point, but when he noticed I was already represented, he all of a sudden wasn't so nice. I may have to wait 5 years for the next buyer's market if this keeps up and the rising mortgage rates aren't helping either. I wanted to start my investing career in my 50's. Now it seems it may get pushed to my 60's instead.
Hi Shanterra. Depends how much personal cash you have to invest. Enough to forego a bank? Banks/lenders look at employment when it's a SFH or small MF. If you want them to focus more on the revenue the property is generating, rather than your unemployment status, look for asset based, commercial loans. I believe you can get smaller properties with such loans as well.
Post: Just starting at 32 with wife and 3 kids.
- Posts 119
- Votes 45
If it'll make you feel better, I'm in my 50's and only starting now due to an inheritance. It's never too late and with no debt, you've proven that you're financially responsible. May this year be very prosperous for you!!
Hi Dustin,
I'm in Westchester County and plan to invest in CT. Because this market is rough for buyers right now, I have to have my options open to both residential 5+ and mixed use. The location of the property (high trafficked location) and the type of businesses, is something to consider. If you had a laundromat, hardware or convenience store, I'd say jump on it. The leases tend to be longer too.
I'm jealous that this deal literally fell into your lap. Take it and run with it. Good luck!!