Accepted Offer - Yet, very interesting thing happened!

Is there anyway you can close on it? That would be the only way to keep your "friend" from bypassing you.

Cathy

Your friend, the agent, is shut out of the deal unless you are willing to pay him a commission. The seller's broker is going to pay your agent for bringing a buyer (you). There is no benifit to your friend (the agent) to have his buyer purchase your deal. He would rather go find another deal or wait for this one to go back on the market so he can collect a commission. Offer the agent something to compensate him for bringing a buyer.

Al

My agent (we are just starting out in working together and haven't gotten this far yet) mentioned the same thing to me in her questions of this process "What if the listing expires? And what if the buyer DECIDES to wait until your listing expires to bypass you and make an offer directly with the listing agent?"

My answer was: "Well, I'm not waiting for a listing to expire. I am initiating a long term relationship with my buyers from the start and doing my best to establish a personal relationship and trust upfront. I am bringing my buyer on a walk through of the property, once it is locked up, and if my buyer chooses not to continue with the purchase of that property, then NEXT, I am onto my next buyer (which is why it is wise to have MULTIPLE QUALIFIED buyers on my list interested in the same specs and area). There is no opportunity for someone to 'wait for the listing to expire'. Because if they are waiting, they are going to miss out on my property because another buyer will take up on it before it expires." Could it still expire on me? Yes. Of course anything is possible. But I am doing everything I can to prepare my buyers and my list so that it won't expire.

I still feel that way about the above, but can see your predicament!
Cathy is right ---can you close on it at all?

If not, yes, your agent friend can unfortunately "bypass you", and at least you have learned the lesson not to "fully disclose" next time! (I can completely see myself doing the same thing as I like to just be so transparently honest with people) But in this case, as I know you are seeing in retrospect "full disclosure" is not necessary or required at all and is like you said, preventing you from closing the deal!

I spoke to the coaches and they have said what they are finding is that people are not qualifying their buyers well enough. Not getting proof of funds up front. And not having ENOUGH qualified buyers before getting a property in an area locked up. (I am guilty of all of the above, and working on it!!!) I have to remember "it is a business" so asking for proof of funds and getting several people "qualified" for one area is just a part of the business and those that do business WILL understand this! (I was just nervous about asking questions about people's finances, etc...feeling it was too personal). I'm finding the ones that take it too personally are new to the investment world, and if you explain nicely that in order to "play" this is what everyone provides...that it isn't "personal"...you don't know them from Adam, and just need this to "do business" with them as a standard requirement so you can understand how quickly you can close and exactly what you have to work with in finding them the best deals possible.

Non-circumvent agreements (separate from the buyer's agreements to prevent exactly what you are talking about) are not being signed (because savvy investors don't sign these). So bottom line, only lock up GREAT deals for MULTIPLE QUALIFIED buyers, and just continue walking through with them and saying NEXT immediately if your buyer does not want to sign on it to find your next buyer on the list who will sign on your GREAT deal!!

As far as agent deals go ---Minimize BOTH your time on each deal as well as the seller's agent's leeriness of your "assigning" by including the contingency: "Purchase subject to partner's approval and inspection within 10 days of this contract" This way you take all your cash buyers through (if the first one doesn't take it) within 10 days, and if none of them take up on it, your contract is off the table. That way, you are not tying up the property for long (if an agent or seller is not wanting to "wait" for an assigns for it to go through). And you are MOVING quickly, so if your cash buyers don't want it, then NEXT (you lost that deal, but onto the next). Everyone stays happy...your agent, your seller's agent...no one is "mad" at you since you didn't tie it up very long. And you probably have a MUCH better idea of "OK, this is WHY my buyer didn't go for this and now I'm going to find him or her EXACTLY something they WOULD want." Some may argue...well, tying it up for 30-45 days would be safer and give you more time to find a buyer. That is true and is more do-able for FSBO properties with motivated sellers, but for agent-represented properties, limiting your contingency to a shorter amount of time keeps YOU keeping YOUR buyers happy by finding them exactly what they want (and spending your full time on this), keeps you SPENDING LESS time overall by being able to say "NEXT" more quickly on your deals, and gets you that much closer to REALLY getting to the heart of your buyers needs, and developing those long term "deal after deal" relationships that you want with your cash buyers especially. This is my humble opinion at least (and extended thoughts based on some great advice I received today).

Pretend the CAPS above are bold ---not yelling, promise I'm preaching to myself by the way, too. I'm still learning everyday!!! (And have learned a lot myself today in finding out these answers to respond to your post)

Here is a great post by Sistreat on places to market your properties...maybe it could help you in the future if you get in a bind: http://www.deangraziosi.com/real-estate-forums/marketing-buyers-and-sell...

Keep us posted on how it works out in the end!

Best wishes to you and your success!!
Louisa

I just saw that one...if that is legal I would do it!!

(not sure but certain states may not allow an agent to be compensated outside of the commission on the deal? At least I have heard this...just heresay though so I could be wrong...)

you could offer pay your friend, the other agent, who says he has a buyer for the property a referral fee and not the full commission. If and only if his buyer closes on your deal that you still have lock under contract. You can decide what amount to offer him. Even if its amount equivalent to a month's rent or car note. If he doesn't take your offer its his lost. Will the listing agent allow you an extension of the tentative closing date on the listing?

Thank you all DG family so much.. for all of your comments. I'll keep your advice about making any extra agents an offer when working on my next deal. I did cancel this property's contract today because I feel like trying to do so right now will longer the time the seller needs to sell his house. They're in financial trouble and anxious to know what's going on. They've been having many sleepless nights I'd guess. At the same time, the fact that I won't be able to extend the closing deadline (2 weeks from now) make it hard to not let the listing not expired because my agent friend and his clients have tons of time shopping around for good deals, thus they can wait. I learn great lessons from these though, that I'll not tell my agent friend about properties I've got under contract unless he agrees to not bypass me. Also, I could see now which agent could go further with me in my investing career and what not. I've been working with two agents at the same time. The other agent has always cheered us up and said we'll find our deal soon if we keep up our good work.

Having a short closing is fine, if your numbers are right.
you would have had no problem dumping the property to a cash buyer.
If your wholesaling, you have to get properties below what investors are paying for in the area.
Example:
I just got a lead off one of my bandit signs & a new Investor posted his bandit sign on the telephone pole across from mine,"not happy about that" & the motivated owner called both of us. After looking at the property, it needed some major work & she needs to move in 3 weeks. Anyway, a Realtor wouldn't touch the property, I made an offer of 200k which was 60%of the ARV minus repairs & the other Investor didn't even look at the property & offered 275k. I know he's a wholesaler & will have trouble getting rid of this property.

Soemtimes the lessons you learn or the information you gather along the way is worth more than clsoing a deal. It takjes tiem and effort at the time, but the next time you have a similar deal you will be that much farther ahead ofthe curve. Congratulations for taking action. Good luck on your future deals. Believe and Achieve! - Joe