OfflineSo my husband are I are new to this, please help us! We are starting. Listened to a lot of Dean`s trainings and feel that we have to start now. So we got a lot of things started and tonight we interviewed a RE Agent. We liked her and she sounded pretty professional, BUT she wanted us to pay her 3% of the sale price, and that`s with wholesales. So if we would sign a contract on a house $100K, she would want $3K, not the 10% of our profit, but of of a house price. And then she wanted us to sign a contract with her that we will not work with any other agents while working with her.
I understand that it will not work out, and we will have to say No to her (probably) and will look for another RE Agent. Now, please help me, how do we explaine to her that it would not work, what do we need to tell her and maybe she would work with us if we explained it right!???
She says making 25 offers out of 100 is a lot of work and $500 would not be enough for her.
ANY Advice would be appreciated! Thank you!
Help with Advice please: RE Agent wants 3% of sale price
Posted on: Fri, 05/18/2012 - 03:07
Help with Advice please: RE Agent wants 3% of sale price
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First of all read Dean's books and/or enroll in his success academy. Also, the only thing an agent needs to know is that you either buy, fix, and flip. Or that you plan to buy and hold as rental property. Never tell them you plan on assigning.
As far as commission goes, the agent always gets paid out of the seller proceeds. Not from you the buyer.
Im not an expert, but im sure the more experienced investors will correct me if im wrong.
Thanks and Good Luck!
you ask your agent if she is willing to put in many offers below asking price- that's all. You don't say that you're wholesaling.
Agents do get paid 3% of house purchase price- the investor does not pay her; it comes from the seller...
You should not have an 'exclusive' agent; just explain to her that you have other partners in other areas and that you will use other agents for those areas...
Valerie
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Thank you for your responses, but I am confused here. If the house is for sales by owner, then my RE agent will get 3% from the owner for selling the house, then it will not be for sale by owner anymore, since the agent would be involved. And then if the house already for sale by another agent, will my agent get on it and get paid %3 too. I am just trying to understand. If the owner wants 100K, than it means he would pay to his agent about 5% and then my agent 3%, than he would give the house to me for 108K. Is that correct? it just seems like too much, doesn`t it?
I understand most of the things but this one I can not undertand at all, the part with the comissions, and all.
I am sorry, I am not stupid
And would it be easier to find a seller for a house like this if I work without a RE agent, so I can sell the house for 110K, make my 5K, give 105K to owner, he`ll pay 5K to his agent and get his 100K.
I did read the books of Dean, we got the last one in the mail last week and I see that you dont tell your RE agents much at all. But with the comissions it`s still doesn`t make sense.
How much do you pay your agents and how do you work it out? Please share!
If you are working directly with the owner, then there is no commission involved. As a general rule if you are working with agents, the listing agent who is representing the owner of the property will get 3% and the buyers agent, the one who is representing the person buying the property, will get 3%. And this 6% total will be paid when the property sells from the escrow account and is usually paid by the seller.
This is one reason that I have to get properties well under market value as a Fix N Flipper. When I resell the property fixed up, that 6% comes right off the top after all my other expenses.
When you say the property is already listed by another agent...then that agent already has the listing until the listing expires or the owner gets rid that agent. If it's listed already, they might be under contract with that agent. When I listed my property, I was under contract for 6 months. If you're buying, it doesn't matter because you're not paying the commission.
If you get a property under contract with an owner, and then give it to an agent to list on the MLS, you're going to have to figure enough dollars into the price to cover the commissions. Just make sure you're clear with the owner of the property. If they sign a contract with you, they are not expecting commission to come out of that price. This is also why wholesalers usually sell to their own buyers list and not on the MLS. They promise to get properties at really good prices, better than listings on the MLS.
Some agents will make you sign a contract that you are working exclusively with them. They want to be sure that all their hard work pays off. Not all agents do this, but some do.
And one more thing, you can sometimes negotiate the commission percentage down, but not always. Remember, this is how agents make their living.
Hope this helps.