Going to the Listing Agent is not going to save you any money

I have to counter that thought you have regarding bribing....the ethical thing to do whether investor/buyer without an agent is to remember that when you accept and represent both buyer and seller you have a fiduciary duty to both; since you collect commissions for both....you would not have a sale for your seller if it were not for your buyer...furthermore; you are getting paid to work for both in ethical poise and not just for the seller because he came first, otherwise, don't accept dual agency. In my opinion, going directly to the listing agent only saves a little time on my part but remember this: A buyer becomes a seller at one time or another and you might get that future listing. As far as babysitting the listing...that's what you get paid for. In addition, I thought banks were in the business of lending not holding inventory; that seems to me like a lot of peoples time waiting until they get their lucky number. CA investor, realtor and appraiser.

Disagree. As Investors we are not going after pristine condition homes that have multiple bides. We go after Properties that have been on the market a long time listed 20% below median value in the area and need excessive repairs. We know to get the discount we need, it has to fit somewhere in this formula. I have been through 5 Realtors and since I went direct to the listing agent, I got an offer accepted.
1: He was about to loose the listing
2: I got inside scoop that there was no offers on the table.

So, I guess you don't have a Realtor now and going to the listing agents. Did you save any money and how was the listing agent about to lose his listing giving you a discount? How did you get inside scoop? Please enlighten all of us.

Also, if you had some sort of agreement with your most current Realtor, and the offer got accepted via this listing agent, shouldn't the most current Realtor get paid, via referral fee or other arrangement?

Where are the ethics and what is the point of an agreement and a Realtor's value?

waiting to get paid.

Fiduciary duty exist between agent and client, but if there are no ethics in the trade no trust between agent and client, then what good are agreements to work with each other? And how good are an investor's words to any agent who decides to help him with his deals?

Listing agents can actually help you make money at close. The Realtor above who listed the post may hate my information but this is for investors not Realtors.

Here is the fact: Listing agents usually list to receive 3% for listing the property and another 3% for the selling agent. The listing agent hopes to be both the listing agent and the selling agent. This would make them 6%. That is a killer deal for being a Realtor.

You can go directly to the listing agent and ask to put in an offer on their listing. They love this. Then ask that they pay you the 3% for the selling agent at closing. Why? Because if they don't they will lose the 3% anyway when you get your own agent involved.

You may also ask for 2% back instead of 3%. This way the agent still gets more than they would and you get money back at closing.

I am not sure that an Agent can legally give the buyer cash back at closing. You may be able to get the Agent to pay some of your closing costs.

Al

All the agents that I have worked with, I only had to sign an agreement with 2 of them, and the agreement only stated that the properties they send me or are involved in. The property we just locked up is in a whole different city. In no way am I saying I go behind my Realtors back. She submits offers in certain areas for me.

You can ask the agent for cash back in cloing. The agent will in turn inform the seller/or bank if this is an REO and submit your request. I've done it and got money back in closing. I also have a pending deal right now that i will be getting money back in clsoing. So it can be done! I've always believe that if you don't ask, then you don't get it. The worse you get is a "No", but you will never know unless you ask for it.

I have a deal right now that will be closing on it in a week or two. I've asked the agent for 3% concession cash back for repairs and i'm getting it. So, if you don't ask or negotiate with the agent, and the agent communicate this through the seller, then you don't get it. Investors use creative and stragetic way to make the deal work, realtors only focuses on selling and buying properties. This is why a lot of investors and realtor have this misconception about each other because investors use other methods of real estate investing, while realtors thinks its unethical and illegal.

Lloyd

Sounds like the agent has agreed to reduce their commission from the seller, and the seller is giving you the funds. I don't believe the agent can write that check from their commission proceeds.

I am impressed with your approach and how you pulled it off. Keep up the great work, and thanks for letting us know some of your tricks.

Al

These are REO's and HUD properties that you can negotiate with the bank/asset manager through their agents. It can be done! My latest deal is HUD, and i've asked the agent for 3% concession for closing. She represent HUD, and for all i know she doesn't represent me. So, being creative and taking advantage of the skills i've learned, i asked her to do that for me, which she did and now, i'm getting 3% concession goes toward closing cost. Now i don't know whether HUD pay her extra commission for getting the deal with me or not, but she didn't represent me. She merely communicated with HUD as what i wanted out of the deal. The 3% concession can be used on either on closing costs, or use it toward repairs, or even use toward the price reduction of the property. So, i know it can be done. One thing i also would like to point out is sometime, i may bypass the agent and go directly to the bank. I would call the bank and ask for someone who handle their REO's and then just take from there. This would eliminate a lot of head ache and less work on everyone. Good luck!

Lloyd

To Lloyd,

I too am currently involved in making offers on this one listing asking $357K a 3unit REO. I just called on that listing and one of the agents showed it to me and my contractor this past wknd. She wasnt the listing agent but didnt have a clue about this property details. ie, what are the comps? The sq. footage was off. I did tell her that I currently am looking for investment property to purchase, and do not have an agent. My question to you is does she still have to split this 6% with the listing agent? Today she still is awaiting my bid/offer because for now shes saying that she had 6 over this wknd and Bank Of America has been slow to give any ok's. Also I called the academy to make sure my offer is ok and not have to look like a fool. I am currenty figure out my numbers to hurry up to make the offer. My contractor said Rehab to be $5000. each unit. LilyfrmL.A

If your agent submitted the same terms and numbers, you still would have gotten the property. You burned your agent. The listing agent does not make the decision to accept any offer, unless he's the also the seller, but in any case, the seller makes the decision on which offer to accept, not the listing agent.

You got the property because the seller liked your terms. The seller would have accepted your offer if it were the same terms written by your agent, therefore, you did you burn your agent for no reason. (Shaking my head) And shame on you. You're also giving investors a bad name and showing an example of investors that many experienced agents will avoid.

You would have gotten the same or better deal since your agent is a negotiator by trade had you allowed your agent to write the offer and should be entitled to payment for all the time your agent worked for you, whether in front of you, with you or in the background.

A lot of people just don't get it and agents are out there working for you and you, the investor, is working for yourself. It is very tough to find a competent and experienced agent who is loyal to you, the client, when commissions could be so alluring during tough economic times.

If you don't believe you could have gotten at least the same deal, then you need to do your agent a favor and stop wasting your agent's time since the agent needs to have clients who are loyal and value their services and understand that they do this for a living and not for some newbie investors to sponge off them.

By the way, your post still did not answer these questions:

Did you save any money and how was the listing agent about to lose his listing giving you a discount?

How did you get inside scoop?

Please enlighten all of us.

For those of you who don't know, the entire commission for both sides, comes from the seller, buyers don't pay a commission. Money is not a reason to not use a buyer's agent, but their experience, familiarity with all laws, regulations and purchase tactics makes not using the right buyer's agent actually a liability.

That's great! There's no reason a competent buyer's agent cannot negotiate that for you as well.

Proper representation from the right Realtor is an investor's greatest asset. If you believe otherwise, you've been misguided and have the wrong intentions or unfortunately, got hooked up with the wrong agents.

That's great! There's no reason a competent buyer's agent cannot negotiate that for you as well.

Proper representation from the right Realtor is an investor's greatest asset. If you believe otherwise, you've been misguided and have the wrong intentions or unfortunately, got hooked up with the wrong agents.

You can find bad investors and bad agents but also you can find good and ethical agents and investors. I believe you need to look for the win/win situation and for me to make money not necessary means somebody will loose it. In my own experience I have worked with agents that make me money but some other that don't have a clue and cost me money.
Live and learn.
Daniel

I don't have anything against realtors. I have a best friend that is a realtor. But, I just went in on my FIRST deal/screw on a REO property. The bank is only owed 50K. This is a Fannie Mae property.

#1 The crooked realtor REFUSED to submit my proof of black mold to JUSTIFY my low offer. In fact, she flat out said "YOU know there is mold, I DONT. #2 She did NOT advise me that Fannie Mae only allows one counter offer. #3 She has the property listed for FULL VALUE as if the property is in MINT condition. This is in NO WAY discounted a penny, in fact it is over priced. #4 She is pushing the Home Renovation Loan to potential buyers so, if they purchase it the "max value" of the property is only 80K and with a 20K renovation loan the buyer will be ABOVE the actual apppraised value .... her comment "Not my problem". She literally told me out right "your offer is a waste of time but, I have to submit it by law". Keep in mind, my offer was the bank pay off...minus the 11K mold remediation estimate ONLY.

I chose to use HER as a buyer/seller agent so she did not have to split commission with my realtor friend. I also promised her the listing on MY current home at a 10% commission (which is common here). But, I feel she is 100% on the side of the bank and 0% for advising me. She is NOT representing me as a buyers agent or she would be advising me on the policies of foreclosures and how best to obtain his home.

Any and all information I am getting is from the real estate commission, Fannie Mae Management Department, and online. This whole experience has been a rip off dealing with a REO that has gone to a listing agent. Unfortunatley, I live in a small community and we have ONE CHOICE of REO realtor here (and a very low foreclosure rate here).

Never again.....next time, we will just buy it at auction so we do not have to deal with another greedy realtor........looking to lie/mislead people to get a higher commission.

Oh, I am NOT an investor!!!!!! We are just a family looking to get into an affordable home for our family. So do not think everyone on this board are investors (which you do not seem to like) .... some of us are just regualr families. Also, don't think all realtors are straight arrows because they are not and in these economic times they are out to make as much as possible because their sales are down. In my particular case, the listing agent has done alot wrong and has definatley NOT represented us at all.

Off my rant (but I saw this and HAAAAD to reply).

Are you currently selling real estate in CA? A whole piece of the pie is much better than half of the pie. I will tell you right now that if you work with listing agents you get much better attention to your offer than going through a buyer's representative. In addition, yes, the listing agent has a responsibility to the seller, but if the agent is also representing the buyer, they have a responsibility to the buyer as well. Investors who perform time after time for the listing agents are the investors who are getting the deals! Period!

KimmyJ
Press on...

Please be careful with this type of sloppy advice. Both agents and buyers could get into trouble if they did what you advised. No Agent can legally "pay you the 3% for the selling agent at closing" The law in almost every State clearly states that you have to be a licensed agent to recieve a commission for the sale of real estate.

Are you really one of Dean's official coaches?

Licensed Realtor/Investor

I don't think nstreet was talking about receiving commission from the agent. What he is talking about is having the agent give up some of their commission to help with closing costs, etc. At least that is how I understood his post. This is legal if disclosed at the closing table. Agents will give up a little commission if they know you need help and they want to sell the house. Although, I haven't seen it done lately, but all my offers are on lower end homes, so maybe agents are doing this with high end real estate transactions.

KimmyJ
Press on...

Sloppy is such a messy word. The post below the one I am quoting has it correct. You are not setting yourself up to receive a commission at all. You cannot act as an agent with the proper licensing. I would hope that no one acts as an agent that is not currently licensed. However, you can ask the Realtor to give you 3%. The agent themselves are making 6% (being the listing agent and selling agent). Instead of bringing in my own agent so that the listing agent is making 3% anyway, I am asking the agent to make 6% then give me 3%.

If it works better I can ask the agent to give me 2%. This way it is still a win for the agent. They are making 4% instead of 3%, no extra agent involved and all they need to do is give me 2%.

Learning from both ends here....