Do We Really Need Realtors?

I deal directly with the selling agent to give them the double commission. It is a common problem here in CA; so much so that the real estate board has created rules governing NOT submitting offers on properties.(I posted them somewhere on this site; not sure where, can't find it; but its directly from the CA DRE) The problem here is REAL and RAMPANT! I've had homes that have been sitting on the market over a YEAR and they won't look at my offer and months later they STILL are sitting on the market. And, I offer on properties that need a lot of work and show the work they need with my offers by submitting the bids for the work. I'm not one to go and put offers in just for the heck of it. So, this is a huge problem. Even Dean admitted at the EDGE he has the SAME problem. LOL

A way around this is to ask, in the offer, for a written response from the seller showing the offer was shown to them and/or denial in writing. Agents will try to finagle themselves out of that as well. But, at least here in CA, they do have a fiduciary responsibility to submit all offers made on a property. If they want to advice their seller client to wait another 30 days, that's one thing. But to not even show an offer is a disservice; especially on these properties that just sit here vacant.

What's really frustrating is going back 5-10 months later and seeing it sold even lower than you were offering. That takes the cake.

It really is C R A Z Y!!! And there are unfortunately MANY realtors out here that do this. Its pretty easy to blame the investor and assume a bank doesn't want to see an offer and would rather have the REO sitting on their books for months on end. That's a poor assumption on the agent's responsibility who is choosing not to submit an offer.

chad.charlie wrote:

Zion Properties wrote:

...
Do you know how many realtors I run in to that WILL NOT submit my bona fide offers? That fiduciary responsibility seems to have gotten misplaced somewhere.

This is hairy, and I get the frustration, I do...BUT, there is no agency established between buyer's agents and "investors" unless you sign an actual contract with them and work out some sort of separate compensation. The Obedience, Loyalty, Disclosure of Info, Confidentiality, Accountability, and Reasonable Care, Skill and Diligence is *technically* owed to the seller who is paying the commission and has created the agency between the brokerage and seller. Your buyer's agent is co-broking that deal, thus splitting the commission, and thus working for the seller also.

Sellers' Agents are still paid by the deal, per se, so unless you worked out your own commission scale that compelled them to get you a lower price, they're not working for your best interests!

So to the example above, if an agent is somewhat sure, based on his market knowledge, that your bona fide offer can be outbid if the seller hangs tight for another 30 days, and his client is a busy person for whatever reason, he is doing his actual client (the seller) a favor by not throwing every offer at him.

I get it, I get it, it's frustrating to deal with agents (and it's frustrating some times for us to sift through the fields of low-ballers to determine who's legit and who's just digging for gold!), but a lot can be overcome by changing the way you explain it, or throwing a sprinkle of diplomacy in there. Keep in mind that a gainfully employed RE agent makes good money and doesn't ever really "work" for you. All professionals will lean toward the 80/20 principle and they are going to put emphasis on servicing the 20% of people that bring them 80% of their business, like retail shoppers, for most agents.

My .02. I see both sides well since I run in the middle, but I think a lot of people are getting the wrong impression as to what a RE agent "owes" them, or what their professional motivations are. Bump into an agent, talk about a deal you just did, look and sound like you have resources, and you've got his attention. But introduce yourself to an agent with a canned email, fax, or a fishy sounding request to field a bunch of 50% off fmv offers, and he's looking right past you, deleting the email, or recycling the fax.

Everything is possible! But there are much better ways to get through to an agent then others.

Kind Regards,
Chad.

and when its still sitting on the market 30, 60, 90, 120, 180, 275, 360 days later?

Do you ever deal w private investors or asset managers??? I think the best way to get quick deals done is to find non-MLS properties, purchase, fix up and resell.

Oooooorrrrrr,.....

Do the above, find a good realtor who you can give the listing to, and let them know in return you'd like first dibs on when they get properties before they list them.

Sometimes, just sometimes, us realtors may be of good need lol

Yes, you're correct, that is a disturbing problem. We are on opposite end of that spectrum in NYC.

I have access to one and only one; and another private investor. But I hear ya on that one. Off market properties are always a goal.

Oh, and I know realtors can be a great asset themselves; WHEN you find a GOOD one. [That's how I got my cabin in the mountains :)]

But when they're bad, they're bad...

The ones that sit on the market so long sit with the same listing agent who won't take lower offers. What're you gonna do?

What do yo guys do when you want to get the lock box number to look at an REO and the listing realtor only wants to deal with another realtor???? I hate that.

Or is one of those e-lockbox that only a realtor can open????

A common problem is they get stolen to prevent others from looking at them, so they try to minimize the matter by controlling who they get it to and normally a non-agent or someone they don't know is off-limits unless they view it with you.

they swithced over 100% to supra over here. There are a few agents who stick regular padlocks on the homes too. But, generally, here you can't get in most homes w/o a realtor. I use my redfin agent to get me into properties But, actually, I think I found a GOOD agent. Only time will tell; but this guy seems like 'the one'.

and i'll scratch yours.

That's how this biz works. Whether you're an investor or an agent or anything.

I have about 6 strong mortgage brokers I work with and I send clients their way. In return, when they get a client in distress that may have to sell, they send them my way.

I work with about 40 investors, but there are 4 that I give priority to; when I get a property that needs to be bought, I contact them. In return, they give me the listing when its time to sell.

This is to no one in particular but if you want to survive in this, your better off in peoples faces at events than on here asking and receiving the same redundant questions and answers.

As an agent I had a lot of ads on Craigslist, they cost us about 6.50 a pop. Anyway, when your number and email are on C-list, you get a lot of spam email and spam calls. ONE day, Joe Customer called me up and said that he and his boyfriend were looking for a place over 2,000SF (that is HUGE in Manhattan), and it had to be near the water so that he could see his Yatch (sp?)...that he would be sailing up here in a couple of months. The short version of this story is that the guy's story was complete hogwash.

Personally, I'll give anyone 5-10 minutes of my time, but eventually, if he wanted me to put offers in, I have to see some legitimacy. He didn't have an email for me to email the listings, and he asked me to postal mail them to his office. When I Gooogle searched the address, it was registered to a small mechanic shop in South Carolina named by his last name...so either he was a multi-millionaire that owns thousands of auto shops around the country, or he was just blowing steam up my tail for some odd reason. I'm pretty sure it was the latter.

My point though is that when agents put their contacts on these public forums, we get ALL kinds of solicitations, and it is a challenge to sift through the legitimate and garbage. About 95% of the inquiries we get are garbage, depending on how specific or qualifying you made the ad.

So flipping the tables on me:

I'm working with a property manager / agent in Pittsburgh right now and it got to the point that I was asking for a lot of his time to get listings and feel out different neighborhoods. He demonstrated to me that he knew his area well. So instead of me continuing to tell him what my plan is (to own 50 rentals in the near future), and further explain to him why I can't put in an offer just yet, because I need to close on a Long Island deal, I sent him my pre-approval for the deal that I'm closing now, and broke down my finances and why I'm confident that I can support two more mortgages in the range we're targeting.

This in no way was required of me, and you could argue that I'm catering too much to a guy that I have "working" for me, but when I put myself in his shoes, I realize that I'm just another guy (from out of town no less) hitting him up with idealist numbers and strategies. So I re-approached it, sprinkled in diplomacy, and gave him a token of my legitimacy.

He has further helped me refine my search, and even identified a market gap that I wouldn't have discovered on my own. He's sold on me, and I'm sold on him.

So going back to a theme in the thread above, agents CAN be very useful. BUT it's imperative that you identify the win/win in the relationship and sell him on you, as opposed to always coming from the standpoint that you are God's gift to him...even if you are. That's just driving home my diplomacy point. You will find a lot of these guys will work very hard for you, but it's all in the approach. And with the exposure we get from Craigslist, I PROMISE you that a canned approach is not going to cut it. Discover the person, and sell him/her on you, you the person with a plan and resources.

Kind Regards,
Chad.

I actually agree with this. Here in Texas, we are required to present all valid offers (contracts), and I think a lot of agents will not present something that's not "Valid," unless it's a state promulgated form. Believe me, you've never ran into so much narrow mindedness until you have worked in the industry. Real estate agents are certainly not needed on every deal, but they are needed sometimes, and Dean agrees in his books.

==> I agree with the sentence pointed at above. I hear my fellow agents frequently say, "Sometimes I feel like more of a counselor than I do a sales person." The thing is, it gets rather tiresome being a free counselor. No other kind of counselor works for free. Like yourself, I will give anyone a few minutes, but if they're not willing to help themselves or pay me, it's kinda' hard to take anything they say or do seriously.

If someone's driving you around opening up properties with MLS locks on them, giving you advice and opinions, buy their gas and perhaps a meal. It'll make you a friend. Scratch their back, and they'll scratch yours.

I've had regular buyers, not investors, hang up on me or walk out, when they're asking me to drive 50-100 miles to them (Texas is spread out) and show them a property and get some free advice, etc., when I simply ask, "Are you pre-qualified for a loan or paying cash?" Most people don't want to buy a house who are inquiring, and most of the time they won't even as much as buy the agent a Big Gulp. Seriously people, if you want someone to run 5-10 comps, show you some houses, etc., do something for them. Gas is $4.00 a gallon, and they have to rent their desk or office, pay a phone bill, etc. This isn't rocket science.

...climbs down off of high horse, now.

What does a RE agent consider valid? I submit a $1000-3000 EMD with each of my offers and show a proof of funds. I include a list of all my expenses and that I will make from 13-20% return on the deal and that is for the risk I'm taking in buying this property that needs the work I include with my offers. I even offer some of them my LISTING of the property when I'm ready to flip it.

There's a lot of bad eggs out there in the RE agent world as well. Its not only the investors that have rotten eggs in the batch. It goes both ways.

Lol. I second your validation. Because I care about my time, I would often throw me and customers in a cab if we were going to go to an apartment 20 blocks down and an Avenue over, instead of hoofing it, about a third of them would pick up the $6 tab which even though a small token at best, showed me they at least valued other people's time, which put a much stronger wind in my sails.

I think some of us are passionate about sharing the "counseling" because we're genuinely amused by these markets, and like sharing, but at the end of the month, you still have to balance expenses.