Working Through An RE Agent
Hey all,
Can someone give me some information about working with a RE agent. I read in a really good Foreclosure book that It's okay to work with a RE agent as long as it is a GOOD one. I think it could be a good idea. I do have some questions of course. For example if I have a RE agent that is happy to build a good relationship with me and she gives me good leads what do I give her in return? I guess my question is Why would a RE agent want to work with me? Where does the RE agents commission come from? How do I tell my RE agent who has a seller that I want to negotiate directly with the seller w/o making them feel unwanted? Just a few questions I have.
The important thing to remember is that a person’s occupation is incidental in your choosing, or in them choosing you. It’s best to use “the golden rule” as the baseline – do unto others, etc, etc...
Many courses frown on RE agents as unnecessary middlemen or necessary evils. I strongly disagree. They have a definite role in your career, why not let them play it? One actor should never hog the entire stage.
In regard to finding a GOOD one, isn’t this akin to finding a good dentist, or mechanic, or a good spouse, or a good tutor for your kids? My momma told me, you gotta shop around.
And, of course, they’re assessing you at the same time. What do they want? They’re looking to see that your somewhat knowledgeable, or willing at least. And SERIOUS. Number one priority – don’t waste the time of others. This does not mean to inhibit your curiosity and questions, or pretend to know it all. It simply means that a seat at the grown up table requires grown up behavior, or we risk the disdain of our peers.
What do they get in return? Your business, hopefully long term. My rule of thumb: any property I get on my own, I am free to do with as I please. If I go FSBO (rarely) and a realtor brings in the buyer, their commission or split of it is protected. If a realtor brings me a property that I buy and rehab, then I sell it through that same realtor.
Where does their commission come from? Out of the seller’s end, almost always. The commission gets paid even if you assign the contract. Inform the realtor of your intentions beforehand (although many will cast doubt on your ability to assign and their desire to assist). For the benefit of your relationship, try to steer your buyer toward using the realtor when it comes time to sell.
How to negotiate with the seller directly? Ask permission. Ask in writing, if necessary, but make sure to let that realtor know you have no intention of cutting her out. While negotiating, keep in contact with her, keep her updated and in the loop.
Best of Luck,
Quinn
Thanks for the reply. I have let the agent in on what it is that I am looking for. Why would an agent have doubts about my ability to assign? If I am a professional and I know that I can do what I say then adding an RE agent is just another key in the process, No? An RE agent can give me good leads if we have a relationship right? Then even if I assign the contract why would the REA care...he is getting his money regardless provided the house sells. So, I guess what I am trying to figure out is if working with an REA hinders more than helps???
You’re right on track. I’ve gone and confused you with my own explanation. Allow me to clarify.
When you meet a new realtor, qualify them as per your needs. Do this in conversation by informing them of what it is that you do, or intend on doing. Some realtors will go along with this, even be pleased to meet you. Some will view investors as carriers of the plague.
Others, much like some RE investors, will want to keep as much money (real or imagined), and as much of the stage to themselves as possible. Ever see that early Marx Brother’s movie in which Groucho owns a hotel in Florida? His employees surround him and demand what’s coming to them for their work –
employees: we wanna be paid!
groucho: (feigning shock) oh, you want MONEY!
employees: we want our wages!
groucho: (feigning greater shock) oh, you want MY money!
Anyway, once I start alluding to movies, no good came come of it, so...
IMHO, regardless of your strategy, if you view your investment career as long term – riches through volume vs. the one killer deal – and surround yourself with like minded people, no problem arises that you cannot handle. You will assemble a team that can facilitate that volume, and each must be rewarded with their share of the profits. And yes, the realtor is a valuable part of that team.
Quinn [ Edited by agent89 on Date 04/22/2004 ]
In the Army I recieved orders for Germany, I had to go fill out a bunch of forms for the move, I told the lady at the reassignment section the orders would be deleted and the paperwork was a waste of time. She laughed at me and made me fill them out. The next month I recieved orders for Korea, again i told her the paperwork was a waste of time, again I filled it all out. The next month she smiled when she saw me and asked if I needed to fill out the paperwork, I told her no and she believed me. For the next year I saw her once a month to say hi and nope, no paperwork for me. She about fell over when the day came I told her I was taking an assignment.
The point? It takes time to build a relationship and trust, then you will be awarded the treatment that goes with it.
You are correct that what you do with a property after aquiring it probably doesn't matter to your realtor. Mainly what will impact him I think is learning that you will be a serious buyer and on a regular basis. Once he knows you he will also know when a property is a good fit for you. Why would he doubt your ability to assign? He is a professional and has means at his disposal that you don't, you are telling him that you can sell it better than he can.
I'm not sure why you would want to cut the realtor out of the negotiations, unless you are very experienced at the game. My realtor has built a reputation based on years of experience, I want him presenting my offers. If he has the seller he's getting his commission, might as well have him earn it. Maybe that comes with building the relationship too, you learn to trust him as well.
In your post you are asking questions, but you come off to me as being negative towards realtors. Maybe that isn't an accurate reading. But if it is true, you will have to work on it before trying to work with one. He will read your disapproval and it will be difficult to establish a good relationship. You also tend to find what it is you are expecting to find, if you expect to find a realtor who will be a great asset you will probably find them, if you expect to find a realtor to be a waste of time then that will also likely happen.
Right now, I know about REOs that will hit the market as far out as August so I can plan accordingly. Noway can I get that kind of knowledge without help. And noway can an average guy even buy an REO without a realtor. The day mine retires is probably the day I quit buying houses.
Very well said, mykle.
Thanks again for all the replies. No mykle I am in no way at all negative towards RE agents. I feel that they can be an asset if you build a good relationship with them. And I know that that does take time. Not an issue. I was just trying to get a feel for the RE agent and how he could help me and vise versa. My questions were well answered. Thanks again!!!
These series of posts are the best advice I have ever seen on-line. Well articulated, thorough and absolutely on the mark.
I am a broker. I have clients who became friends.... then good friends. As the years (and the transactions) have gone by, they have invited me to their weddings. I am Godfather to their children. They have always "looked out" for my interests and I have made them small fortunes. We are all on the same team.
I would never be able to describe how to build a foundation to achieve such a scenario. However, I believe Mykle and Agent89 just did!
Very impressive posts.