Posted by Brent_IL on September 22, 2003 at 10:18:38:
The last time I looked at a HUD property was a few years ago, but it was the same thing in Illinois at that time. I doubt much has changed with HUD; it was that way for a decade.
Do you all use Realtors?? - Posted by Caron
Posted by Caron on September 21, 2003 at 08:56:04:
One more question - is it worthwhile to use a realtor? If so, can they be negotiated with to cut their % of the take after they have done a few deals with me and see that I am going to be worth their effort?
I just put a bid in on 2 HUD homes for $120k. If I get them, my realtor gets 3%, and then if I turn them, she gets it again. She will be making a pretty good amount for not much work!
Or, would it be best to just use her on the purchase and not the sale?
Thanks for your input!
discount agents - Posted by Scott Shubert
Posted by Scott Shubert on September 21, 2003 at 23:40:30:
If you had someone put a new roof on one of your houses you would expect to pay for that but for some reason people think that Realtors get paid for doing nothing and should therefor discount their fees. I would say that if you want an agent to work for you, and consistently bring you deals, you should pay them extra instead of asking them to give up their pay check. Do you want to go to work every day and then have your company ask you to discount your paycheck? If you don’t need an agent don’t use them but if you do then expect to pay them.
Re: Do you all use Realtors?? - Posted by Rob FL
Posted by Rob FL on September 21, 2003 at 21:19:45:
Like any profession there are good ones and bad ones. A REALTOR is a good person to have on your team. They make a living buying and selling real estate and know what the market is doing. Look for a Realtor who works with investors. Network with other investors and find out who they use. REALTORS can find you deals, help you sell your houses, get you comps, etc.
Re: Do you all use Realtors?? - Posted by Jerry Martin NC
Posted by Jerry Martin NC on September 21, 2003 at 17:43:43:
I use a local Realtor who places my listings in the MLS for $595. That means that I only pay the sale commission and not the broker’s. (3%)
Re: Do you all use Realtors?? - Posted by Linda Simms
Posted by Linda Simms on September 21, 2003 at 10:02:26:
As little as possible! HUD requires you to use them on HUD bids, which is probably illegal. The amount they are paid comes out of your pocket not HUD’s. You should find one that will do it at a reduced fee, as you have for the 3%, but on a $100,000 dollar bid for example thats $3,000 for just submitting the small amount of paperwork You should try to find one that will do it for a flat fee say $300 or $500 as that is about all it is worth. HUD bids in my area have been known to be accepted at as little as 80% of asking price. I never use them on a sale, they are just too expensive for doing little, although I have been getting advertisements through the mail from relators in the area to do it for 3%, 2% and even 1 1/2%. Competition must be getting tough. About the only advantage they offer is MLS listing of your place. I have used MLS several times before and I do not believe it is that much advantage.
Re: Do you all use Realtors?? - Posted by TH
Posted by TH on September 21, 2003 at 09:56:25:
“She will be making a pretty good amount for not much work!”
As a Realtor I must tell you there is a lot of work involved with foreclosure properties. Double the paper work compared to a conventional type sale. I am working with two clients who buy and flip or rent purchases. These people appreciate and respect my assistance with their real estates transactions and commission is the last thing they are worried about.
TH
Re: Do you all use Realtors?? - Posted by Houserookie
Posted by Houserookie on September 21, 2003 at 11:00:01:
Linda,
With all the discount brokerages popping up all over the place I don’t think listing agents will be too happy in the future.
Just spoke with a good freind and possibly one of the best flippers in the business. He says, “In the agency business it used to be that if you dont list you don’t last. Soon the table will turn, if you don’t find the buyers, you’ll have to work the fryers.”
You said, “HUD requires you to use them on HUD bids, which is probably illegal.”
I think you’re right! I’ve always wondered how HUD can require people to use a private organization like REALTOR.
Cheerz,
They’ve never walked a mile - Posted by BrokerScott (Mich)
Posted by BrokerScott (Mich) on September 21, 2003 at 15:17:14:
in our shoes. As I recall with Pre-licensing class, stste exam, local board initation fees, and materials, I was our about $3k before I took my first floor time.
Then there are Annual National dues, State dues, local dues, continuing education, additional classes, monthly MLS fees, giving 1/2 of your 3% to the broker or paying $2k a month in desk rental. Let’s not even get into vehicle and clothing costs. I found that my expenses usually ran about 1/2 my actual take so that “big” 3% turns out to be about 3/4% and that is why I dropped out of that rat race as soon as I passed my brokers exam. Now I am a full time investor that happens to be licensed due to Michigans’ “5 sales per year” requirement. Take care, Scott
Re: Do you all use Realtors?? - Posted by Tim
Posted by Tim on September 21, 2003 at 13:23:29:
I buy 2-3 properties every year from HUD or the VA. I check the websites myself, & then do a drive by. If I am still interested, I have my realtor meet me for a walkthrough. The realtor handles the 45 minutes of paperwork, & if the offer is accepted they show up for closing. I also get them to meet with the termite man, which takes maybe another hour. This works out to a grand total of 3 hours max, & you really expect me to believe that it’s worth 3%? I don’t worry about the commission, I factor it into my offer, but I still feel slightly hosed when I see the realtor collect for something I could have easily done myself.
I will admit that I use a realtor when selling retail. I hate spending my time with tire kickers, & would rather let the realtor deal with all that.
Re: Do you all use Realtors?? - Posted by Linda Simms
Posted by Linda Simms on September 21, 2003 at 10:13:18:
Bank foreclosures maybe, but not for the HUD bids. They are very simple and only a few pieces of paper. Your assistance to find properties may be worthwhile, if you consistantly find them way below market prices for purchases, otherwise they can can spend some time and do it themselves and save a lot of money. They can even use professional wholesale flippers, if they can find ones that leave a sufficient margin to make the profit worthwhile. If you use a relator that is also an investor, you also run the risk of not getting the really good ones as, as an investor they will most likely take those themselves. If commissions are the last thing they are worried about, they are not likely very astute investor.
Re: Do you all use Realtors?? - Posted by Jay Compton
Posted by Jay Compton on September 21, 2003 at 22:23:51:
I personally don’t use realtors to sell my properties. To me it makes no sense…If we’re going pay out someone, let’s just say 7% on a $100,000 deal, that’s $7,000. I can promise you this…Take that $7,000 and use it to pay the purchaser’s closing costs, and give them a “moving allowance”…You’re house will sell 10 times faster than having a realtor place it on the MLS and then forgetting about it.
Just my opinion, though.
Jay Compton
Birmingham, AL
Re: Do you all use Realtors?? - Posted by Rob FL
Posted by Rob FL on September 21, 2003 at 21:13:26:
HUD doesn’t require buyers to use a REALTOR, which is a private orginaztion, the National Association of Realtors. But they do require all buyers to use a real estate broker, which is a person licensed to practice real estate. There is a big difference because only about 1/2 of all brokers are also REALTORS. Although most residential brokers are REALTORS simply because of the power of the MLS.
This makes a lot of sense for HUD to require this. If they did not, any old buyer could submit a bid even if they didn’t have a clue about anything regarding buying a house. This is the same reason you don’t see bank REO departments selling their own houses anymore. It’s all done through brokers. The house buying transaction can be quite overwhelming to inexperienced people who are dealing with bank financing and HUD knows this.
Re: Do you all use Realtors?? - Posted by Robert Campbell
Posted by Robert Campbell on September 21, 2003 at 11:45:07:
Linda and HouseRookie,
I believe you both make valid and important points.
Taking it beyond listing agents, those real estate brokers (and agents) who represent buyers are also under competitive pressure to reduce fees.
Brokers, for example, who can also arrange the financing for buyers, can offer up to a 50% rebate on the commissions.
This may or may not be important to savvy real estate investors. John and Mary Q. Public, however, are likely to find this offer quite compelling.
The only defense a broker has against the cut-throat competition that is growing stronger in the real estate business is to be smart, truthful, and 100% trustworthy.
Deservedly or not, most real estate agents have the reputation of used-car salespeople. That’s why trust and credibility - now more so than ever - will be the keys to long-term success (and survival) in the industry.
Robert Campbell
Well at least you get 5 sales per year… - Posted by Houserookie
Posted by Houserookie on September 21, 2003 at 22:54:35:
we get 5 TRANSACTIONS per year. Anything over that requires either a salesperson’s license or what the state calls a “limited brokers license.” Most investors apply for the limited brokers license since there is no classes or exams required but a $160 fee.
I am considering getting a salesperson’s license for MLS access and to do net listings which are still legal in Minnesota.
Cheerz,
“Agent” from the Latin verb … - Posted by Doug Pretorius
Posted by Doug Pretorius on September 21, 2003 at 18:12:37:
…“idiotus moronicus”.
Not only do you run the risk of not getting the best deals, but like I’ve mentioned before, you run the risk of them turning into your competition when they see how lucrative your style of investing is.
Of course, in my 7 years in this game, I’ve only met 2 agents with a brain. Wouldn’t you know it; they both make more money as investors than they do listing and selling.
relator, oh please. It’s “Realtor” - Posted by BaldRepublican
Posted by BaldRepublican on September 21, 2003 at 11:34:31:
“If you use a relator that is also an investor, you also run the risk of not getting the really good ones as, as an investor they will most likely take those themselves”
Re: Do you all use Realtors?? - Posted by Doug Pretorius
Posted by Doug Pretorius on September 21, 2003 at 22:42:34:
Love it Jay! A big grin came across my face when I read the end of your post: “…place it on the MLS and then forgetting about it.”
I called an agent this morning about a listing of his that I wanted to make an offer on.
Me: “Hello, yes, I’m calling about xyz property, I’d like to make an offer on it.”
Agent: (long pause) “Oooooh yeah… that house on xyz street.”
I agree. Im not a fan - Posted by Houserookie
Posted by Houserookie on September 21, 2003 at 22:37:46:
of paying 3% to list a property but I will consider paying the selling agent for the right buyer.
I’ve closed 20 some deals this year and have only paid three selling agents.
Cheerz,
Re: Do you all use Realtors?? - Posted by Houserookie
Posted by Houserookie on September 21, 2003 at 22:15:37:
Rob,
I am familiar with the difference between a REALTOR and a licensed agent. Thank you for the clarification.
In your area, how many licensed agents also have codes to lock boxes that REALTORS use? In Florida, are codes for lock boxes issued by the state licensing board or the Realtor Association?
If HUD requires codes to unlock those boxes, I suspect buyers must go through REALTORS. Maybe things are a bit different in your area.
Cheerz,