Posted by Jim Kennedy - Houston, TX on May 11, 2000 at 14:18:51:
Posted by Jim Kennedy - Houston, TX on May 11, 2000 at 14:18:51:
Letters of Intent - Posted by Wendy
Posted by Wendy on May 09, 2000 at 16:46:02:
I followed Mr. Sheets advice and have sent out 1/2 dozen Letters of Intent to the listing agents to present to their client.
The response has been frustrating to say the least.
One agent said, what are you sending and why. Then, they said that the seller rejected it because it wasn’t on a contract.
Another agent said, why are you submitting an offer? Who is representing you?
Another said that a Letter of Intent was worthless.
What has been your experience?
Re: Letters of Intent - Posted by Bill Shwartz
Posted by Bill Shwartz on May 09, 2000 at 19:48:19:
Welcome to reality.
Understand that the concepts in the Sheets course are often completely worthless in the real world. It’s not just Sheets and it’s not really his fault. That letter of intent may have worked somewhere at sometime, but you now know it doesn’t work where you’re at and it doesn’t work in today’s world.
Frustrating, you bet it is. But now you know what doesn’t work and you go from there by listening to others who are successful locally, modifying your approach and giving it another try. If you stick to it you’ll eventually have a system that works.
No, it isn’t easy and sometimes you do end up looking foolish (just try running the discount bonds deal by those realtors), but it’s worth the effort.
Re: Letters of Intent - Posted by SteveA (FL)
Posted by SteveA (FL) on May 10, 2000 at 07:57:10:
I started with the Sheets course and while I agree a lot of his advice is thin, not all of it is. I do think letters of intent will work, but NOT with Realtors. Only when dealing directly with the owner’s. Realtors are too programmed to use only their contracts (which he points out.) I mentioned a letter of intent to my Realtor and she said her Broker wouldn’t go for it. Fine. I just put lot’s of addendum’s on their contract and let the Realtor do all the intitial time-consuming write-up (which is what the letter of intent is designed to help you avoid.)
Tell the Realtor what you want to offer and the terms and let them write it up. They may not really like it, but the possiblity of earning a commission will motivate them. And contrary to what Grandpa Carleton says, once you know the contract it doesn’t take “hours” to fill one out. I do them in 20 mins or so.
Remember (and he says this clearly in his course)…his course is not a be all to end all, but merely a beginning. It should be a spark to motivate you to learn more, read more and do more.
Re: Letters of Intent - Posted by Wendy
Posted by Wendy on May 10, 2000 at 12:38:17:
Thanks Bill and Steve for your input.
I think it is wonderful to have this site to rant, share and learn! Thanks to Ken H. who told me about it
I remember Mr. Sheets saying that the realtor must present any WRITTEN offer. And, supposedly, they are. However, I think they are presenting it to the seller in a negative light (telling them not to take me seriously). Also, I’m using email to send them. It is fast, easy to do and easy to copy my format and change the specifics. I think this throws them off, too.
The emailed Letter of Intent takes about 5 minutes to alter and review. It probably takes about 5 minutes for the realtor to fax or call the seller with the offer and get a response. So yes, I’m saving the listing agent lots of time - but if they would rather spend 2 hours meeting with me, showing me the property, filling out the contract and signing the representation agreement, so be it. I was just trying to save both of us time in case the seller has no interest in what I have to offer.
If I wanted to buy every property on the market, I’d offer full price +/- 3%. That’s not my goal. I want to buy a few exceptional deals. I’ve done it in the past, and I don’t see why I couldn’t do it in the future. However, I’m finding that agents don’t even want to be bothered writing the deal if it doesn’t have standard terms and a price very close to asking.
I have also tried to find a realtor to act as my buyers agent on an on-going basis. I’ve had only one agent offer to lower her fee to look over my FSBO contracts.
I find the properties for myself, I analyze the deal, I set the price and terms, I just want someone w/the license to write the contract (or give me one and I’ll fill it out myself) just so that the other agents pay attention. However, for this service, I don’t think the agent deserves 3% (I’m looking at properties from $90K - $300). They think they do - like some kind of entitlement instead of a negotiable part of a deal. I don’t understand this thinking.
If they were dealing with a homebuyer, they MIGHT sell one house. Period. End of sentance. Referral, maybe. Repeat business…in five years? I’m looking for an agent “on my staff”, so to speak. I intend to buy at least 3 properties during the remainder of 2000 and at least 4 next year. (And I have the credit and the income to do so w/o creative financing).
Are there any sane realtors out there in Texas?
(Realtors: Go ahead and blast me, I expect it. I just don’t see the logic of your stance and I want someone to explain it to me.)
Re: Letters of Intent - Posted by Marsae
Posted by Marsae on June 05, 2000 at 15:46:32:
I am a sane real estate agent in Houston. I work with a lot of investors. I would like to speak with you further.
Re: Letters of Intent - Posted by Arlie Anderson
Posted by Arlie Anderson on June 03, 2000 at 03:29:05:
Iam a newbie but I have read alot and I mean alot on this board and almost finished the CS course. The reason I posted is I have had some some of the same predicaments with realtors here in Southern Cal. A guy replied to me by email and told me his strategy was to get the listings that are just about to expire from the MLS and then offer directly to the seller and take the whole deal over and into your hands.
After the realtor sees what you are doing and the volume you are buying they might become a little more interested in your approach if they can see the benefit. he doesn’t give them comission he just gives them a finders fee of $1,000. They (realtors) are glad to get some money and frankly will want to settle for the 1000 on all of these deals because a property may have 96-100% outstanding mortgage owed or Loan-to-Value (LTV) email me with your interest again and I can fax you the emails that we have exchanged because he does a lot better job of telling the story than I do. firstname.lastname@example.org
P.S. Haven’t bought a property yet but I am hot on the trail
Re: Letters of Intent - Posted by John
Posted by John on May 16, 2000 at 24:23:37:
Wendy, the Texas Real Estate Commision does not allow Real Estate Agents to use anything other than pre approved promulgated contracts or addendums for the sale or purchase of Real Properties in the state of Texas. This may be why your forms are not being used. Also most agents must split their 3% +- commisions with their broker, and after paying for State license, TAR and local Real Estate Board dues, not to mention MLS fees, Rent for their office desks, business cards, advertisement and required yearly continuing education classes etc. You can not seriously expect them to do it for free. Besides, they are also legally responsible and liable by litigation on any and all real estate deals they are involved in, and can be fined and lose their license by TREC for violations, and some fines in the 10’s of thousands of dollars. This is not a slam to you or your comments, just the way it is. Most buyers agents would be happy to assist you i am sure, but not for a heavily discounted fee. Good luck in your investment properties. John in Austin
Where in Texas are you located? (NT) - Posted by Jim Kennedy - Houston, TX
Posted by Jim Kennedy - Houston, TX on May 10, 2000 at 15:16:50:
Re: Letters of Intent - Posted by Wendy (Houston)
Posted by Wendy (Houston) on May 16, 2000 at 10:30:56:
Thanks for you factual answer w/o slamming me personally! I just have to respond to a few points below.
I’m not asking them to use my form, merely present my offer to their client. A contract could be written on the back of an envelope and still be enforceable. I’m not even asking for my letter of intent to be the contract (I specifically state that it is not a contract). It is merely the basis for opening a dialogue.
I’m not asking them to work for free. It is cheaper to keep an existing customer than to get a new one. What is the cost of all those ads they have to run to find a new owner-occupant (and run them all over town) who then MAY give them ONE sale, if they’re lucky? I just want one person to work with on an on-going basis w/o paying through the nose for every transaction since they aren’t doing the normal legwork involved. They can make more money selling me 3 deals than selling an owner/occupant one deal, with less effort on their part.
Can you tell me what sort of litigation you are referring to? I’ve only been involved in about 4 real estate transactions: 3 purchases (1 FSBO, 2 listing agent) and 1 sale; but I haven’t encountered any cause for litigation or involvement of the realtor after the paperwork was signed (or before for that matter). I had to educate the second listing agent and tell them everything to write down!
As an update: I just got a call from a realtor/investor who has a property for sale in my neighborhood. They called to say that my offer was not reasonable. I asked her what would be a reasonable offer in her opinion. She said she has it listed for a reasonable price. I asked if that meant she wouldn’t take anything below list price. She said that was not what she said, but that she was not going to negotiate with me. (Isn’t that what buying and selling is based upon? She doesn’t want to negotiate in writing or on the phone - what’s left?)
I told her that the house directly in front of hers which is almost identical (both ugly houses w/zero curb appeal and vacant for many months - but I didn’t say that part) is listed for $7K less. I said I made the offer based on what I thought I could rent the place for. (When taking into account the expenses, there wasn’t much room for profit even at my offer.) I said that perhaps my offer had been based upon incorrect figures and I asked her if she knew what that house would lease for. She said, “Of course I know what it would lease for but I’m not going to tell you” and she hung up on me. (She also doesn’t mention that she is the owner/agent - I found that out through the tax roles.)
Thanks again for educating me…that’s what I’m looking for…and exactly what I’m getting in the real world! I’ve been really impressed with the agents I’ve dealt with thus far. ;p
Re: Where in Texas are you located? (NT) - Posted by Wendy
Posted by Wendy on May 11, 2000 at 12:59:24:
I am in North Houston. Spring/Woodlands to be exact. You?