Buyer's Agent - Says I'm asking for too much - Posted by Lette


#1

Posted by Mark (SDCA) on October 22, 1998 at 11:02:00:

This simply isn’t the case. If it were, then realtors would have no idea where to set the listing price. If the market is changing rapidly then realtors may have less of an idea of actual value. But in general, pulling up a list of comps and walking through the basic appraisal methodology of comparing square footage, bedrooms, bathrooms, neightborhood etc will give the realtor and/or investor an excellent idea of what value is. Otherwise, no one would ever buy property because they would have no idea until after the purchase if they were getting a fantastic deal or were getting cheated.


#2

Buyer’s Agent - Says I’m asking for too much - Posted by Lette

Posted by Lette on October 19, 1998 at 13:39:24:

Yesterday, I searched the web and found a list of Buyer’s Agents to whom I sent a list of questions and criteria. I’ve learned from this site that it is very important to have a buyer’s agent (if you want to work with an agent at all). I figured that they would be a good source for obtaining properties, not to mention comps. One of the agents just called me up and flat out told me that for the list of things that I’m asking for, my best bet would be to get my license to become a broker myself. That way - he explained - I would have access to comps, pre-foreclosures, distressed properties, etc. He was really kind, but he basically told me that I was asking too much. I then asked him in what way. The only thing he specified was that I wanted properties too far below FMV. (I asked for 12% below ). Briefly, I’ll list some of the criteria that I sent to the agents:

  1. 2 to 5 BR Single family residences. No condos.

  2. For sale by lending institutions [banks, mortgage companies, loan companies, etc.], Estates, FSBOs, distressed properties and especially anything by motivated sellers.

  3. Preferably vacant properties, but not necessarily.

  4. Decent neighbrhoods [no “War Zones,” graffitti, etc.]

  5. Asking price at least 12% below Fair Market Value after repair.

Also here is what I asked in the beginning of my letter to them.

I am looking for an agent who will research the MLS for properties that meet my criteria and fax or email me a copy of the listings. Since I live in the city and don’t have access to a car as of yet, I will only do a drive-by (on weekends via friend’s car) and present offers only on those homes that interest me. Since I plan to flip some properties to fellow-investors, in many cases I may have them to do the actual drive-bys. Of course if they are interested in the property I will put together a deal that will benefit them, the seller, myself and of course you, as my agent. I frequently visit the FSBOs sites on the internet and may ask you from time to time to provide the comparable sales on properties.

The agent also said that he didn’t like the idea of me having other investors do a drive-by of the property. But I don’t understand why when I know that this can be done.

Anyway, reading over my letter, I guess I can see why he would tell me to get my own brokers license. But I copied most of this from one of the members on this site. Obviously it must’ve worked for somebody.

I’d appreacite any help or comments in this area.

Lette


#3

Here’s my Realtor ad - Posted by John Behle

Posted by John Behle on October 20, 1998 at 01:58:38:

The ad loses it’s formatting when dropped in here. It’s an attractive one page ad I fax out to all brokerages.

Investor Buyer - Needs property

We are looking for a few good - or bad - properties. Our group of private investors work with foreclosures (before foreclosure at the sale, or after - with the bank), re-hab properties or good rentals. We have cash, institutional financing, private financing and buyers for seller financing. If you have a property that needs work, an anxious seller or a financing challenge, call us.

We also have reasonable lenders that may be able to help your clients out of foreclosure. This can be accomplished through a loan against the property and may include debt consolidation. In some cases, we buy the delinquent loan from the lender and then re-negotiate the terms to help your client keep the property. If your client wants to move on, we can also purchase their property outright and even sell or lease it back to them.

If you have a property or client - or know of one, please give us a call. All commissions will be honored and we will work with a buyer’s agent on un-listed properties.

Representative for buyer is a licensed real estate broker working on his own behalf and for selected clients. With over 20 years of real estate investment experience in Utah and California, we can put together workable transactions in some of the most un-workable situations you may have ever seen.

Example One: Property going to sale in 2 hours. We bought the second and third loans and re-instated the first seconds before the sale. Re-sold the property to the tenant and made a truly win-win transaction.

Example Two: Property in foreclosure on second. We placed a private 5th trust deed loan on the property to bring it out of foreclosure. We re-financed the second and all of the liens to bring everything totally current. Cleaned up the owner’s credit and then re-financed them with an attractive new first loan.

Example Three: Lease Option Saved. The buyer had leased a property for a year and owed $240,000 on a property now valued at $300,000+. Buyer had no down payment, blemished credit and almost no verifiable income (yet $750K in trusts and overseas accounts). We placed a new first on the property and financed a property owned by one of the trusts in another state for the balance of the down payment and an extra $20,000 for the buyer to begin a new business.

We can’t do miracles, but some buyers, sellers, agents and banks think we do. Call John with your properties or financing challenges at (801) 374-NOTE or (801) 583-NOTE.


#4

Re: Buyer’s Agent - Says I’m asking for too much - Posted by The Baze

Posted by The Baze on October 19, 1998 at 17:35:43:

First thing I would do when looking for a Realtor is to say “I want to buy some houses. I’ll pay all cash.” Now you’ve got their attention. Then, as Joe Kaiser says, quit looking for properties and look for motivated sellers. Twelve percent below market is nothing. This Realtor you got just didn’t want to be bothered w/ a low baller. You find the motivated sellers and find a way to meet their needs, and you’ll put deals together. Tell the Realtor what area you want, what price range you’re looking for, and have him fax you anything that matches. Then YOU go through and find the motivated sellers of the bunch.

Tom Bazley


#5

Re: Buyer’s Agent - some are just plain lazy - Posted by PBoone

Posted by PBoone on October 19, 1998 at 15:13:04:

Lette,
I commend you on the letter. We did something similar (phone vs letter) Our response was across the spectrum, but it payed off. I now receive an emial a couple of times a week from an assertive salesperson of every property that meets my criteria.
We do lots of deals together and she makes alot of money. ( So Do I )
Keep moving forward
Pat


#6

Re: Buyer’s Agent - Says I’m asking for too much - Posted by Jimbob

Posted by Jimbob on October 19, 1998 at 15:09:59:

Lette,

The following is not to personally criticize you but are my observations of your letter.

You need to re-write your letter to the Realtors. Basically you are coming off as a demanding investor looking for specific properties, that’s OK if you have lots of money and can move on a deal within 24 hours. By stating you dont own a car and will only come out to see the properties at your convienience, comes across as being arrogant, if you can’t afford a car, you can’t afford to be arrogant. If I was the Realtor, I would call you up and say, “I’ve found what you want, now be here in two hours to make a written offer”. I would tone it down to looking for cosmetic fixers owned by motivated sellers, it doesn’t matter whether the owner is private or bank owned, and when one becomes available, you will tour the house at your earliest convienience.

Instead of telling them you want to send investors out to look at the house, tell them one of your business partners would like to see the house if it’s OK, just a quick drive by and we won’t disturb anyone. As far as stating the price range you’re looking for, don’t mention any numbers, simply state you’re looking for something you can fixup and make a profit, let the Realtor know if the deal is good enough, you’d be willing to list the property with him/her after it is fixed up, give them some incentive to stay with you on this.

In your mind, you know what price you want to pay, just keep it in mind when you’re looking at the house and the local comps on it, and if it’s not low enough, make an offer to your liking but dont make it insulting, put yourself in the sellers shoes and say “would I get upset with this offer?”

The bottom line is you need to be tactful and fair, and not be too demanding when you’re just starting out, once you’ve made tons of money, then you can get demanding.

Just my two cents worth…

Jimbob


#7

Re: Buyer’s Agent - Says I’m asking for too much - Posted by MichaelR (NoVA)

Posted by MichaelR (NoVA) on October 19, 1998 at 15:00:45:

A few comments…

  1. Don’t mention “investor” unless it’s followed by “all cash and fast close.”
  2. Don’t mention flipping.
  3. Don’t mention that you don’t have a car.

From conversations I’ve had with several realtors in my area, they are bombarded with “investors” who they can identify pretty early on as being new. I’ve been told flat out that they just file their requests in the circular file. OTOH, if they perceive you to be a true “player” many will work with you.

Keep in mind, in the beginning, it’s the perception that counts. As time goes on, it will be your actions.

Hope this helps…

Michael


#8

Re: Buyer’s Agent - Says I’m asking for too much - Posted by Mark (SDCA)

Posted by Mark (SDCA) on October 19, 1998 at 17:18:06:

One small comment. If you don’t give the realtor an absolute # (eg 12% below FMV) then they may bring you properties that almost match your minimum (eg 8-10% below FMV) and then become discoouraged when you reject deal after deal the realtor brings you.


#9

Re: Buyer’s Agent - Says I’m asking for too much - Posted by Mr Donald (NORVA)

Posted by Mr Donald (NORVA) on October 19, 1998 at 17:10:32:

Work with a Buyer’s Agent, or simply an Agent whom you trust to do your bidding. Period.

After you’ve done one or more deals with the Agent, you’ll find that they be more than willing to provide you with everything you need to make an reasonable and informed offer on investor properties.

Here’s what you’ll need from YOUR Agent to get you started:

Short Listing - This is the listing that has most of the Property information
Listing Summary - These are the Comps (or Comparable Listings) with basic information to give you a guideline of current market value for the Property
Public Record - This should have the Tax and Sales information on file at the courthouse for the Property

Simple. Should take no more than 15 minutes for your Agent to pull this from the MLS for you. Yet, you’d be surprised how lazy or reluctant Realtors can be.

Case in point: Last week, for example, I followed up on an ad in the Washington Post, listed under “Investment Property”. No brainer here, I figure. So I call the Realtor, and ask for some more information. It was like pulling teeth!

His reluctance to provide any concrete information about the Property (a 4-plex in NE DC for $76,000) was astounding. He was quite defensive when asked: Do you have a copy of the listing available? “That’s my business, I’m not letting you see that!” I pretty much told him that he was wasting my time, and that if he had anything to offer for me to purchase to fax it to me, if he had the time. Yeah, right.

If you’re a Realtor selling investment property, as this one apparently was, you ought to have your proverbial stuff together. 15 minutes of work on the MLS would have given him a nice commission. Instead, he lost a potential customer for this AND future deals.

What a shame.


#10

Re: Buyer’s Agent - Says I’m asking for too much - Posted by Eduardo (OR)

Posted by Eduardo (OR) on October 19, 1998 at 18:29:59:

Mark–

Sorry, it doesn’t work this way. I was a broker for 15 years and on my local Board of Equalization (hears appeals on hundreds of property values from people who disagree with Tax Assessor) for several years. Here’s what really happens: In most cases (say, 95%) neither the Realtor nor the owner know that the fair market value (FMV) of a piece of real estate is any different from the asking (list) price. Basically, the Fair Market Value of a property is what it sells for in an arm’s length transaction (a transaction between unrelated parties where the property has been exposed to a wide market by advertising for a resonable period of time, bidding competitive and parties not under pressure). The sale of the property under these conditions establishes the value. Most listed properties have not been previously sold recently enough (within, say, a year) to establish a value. Similarly, most properties have not been appraised by professional licensed property appraisers recently enough to establish value (properties are usually appraised AFTER a sale agreement has been entered into, either for buyer or seller, or for lending institution). Consequently, although some properties may be THOUGHT to be under-priced or over-priced, no one knows ahead of time whether a property is in actuality priced 12% below FMV, 8-10% below FMV, at FMV, or over FMV–simply put, in most cases the FMV is what the property eventually sells for, whatever that may be (it can be argued that occasionally there are exceptions, but these are usually due to extenutating circumstances to the “arm’s length” rule). It is, unfortunately, a sign of ignorance by a would-be investor to a real estate agent when a request is made: “Show me only properties X% below market value.” This approach should be replaced by those suggested by the other replies to Lette’s posting. --Eduardo