Any commission is negotiated between the Seller and the Broker, reductions of commission go into the Sellers pocket, which may or may not mean a reduced price to the Buyer. In my area it is illegal for the Broker to rebate a portion of the commission directly to the buyer. Sometimes a Broker in my area will accept a reduced commission from the Seller to make the deal work, but it doesn’t happen often.
Last, but certainly not least, the agent advertising the property is the Seller’s agent. They will help you with all the paperwork, but they are primarily looking out for the Sellers interests. In most cases this won’t matter, but I can assure you that anything you say to the Sellers agent will be passed on to the Seller.
is there some unwritten rule that a real estate investor should work with only one exclusive real estate agent in looking for properties?
my friend realtor is upset with me because I am not making her my exclusive agent whether I find the property myself or she does. should I work with only one realtor? I don’t think so, but I need advice from the experts.
thanks.
Roz
Posted by Bill Farrand on May 30, 2006 at 08:33:37:
I primarily work with one RE agent. If he brings me the deal I add $500 to his commission. If I find the deal with a different listing company I still use him to see the house but he knows he lost $500. I have found it to be much easier to work with one individual who knows exactly what I’m looking for. This is how I work and I’m sure others work different. Find what system works best for you in your local market and run with it.
You can work with as many agents as you want, I work with whoever brings me the deal. On the other hand, when I see an ad or sign for a listed property, I have one particular agent I call regardless of what company name is on the ad. This particular agent is a friend who also brings me the most deals.
When you say you are finding the property yourself do you mean you actually locate the owner, or do you mean you see another RE company advertising a home? If you locate the owner yourself there is no reason to bring a RE agent into the deal. If the home is listed with another company why would you want to cut your friend out of the loop? The commission is the same either way.
Absolutely NOT! Your agent friend is accustomed to working with home buyers and having lots of inventory to show. They do not want the competition of other agents. It is all about the commission.
You should have an agreement with an agent to represent you as an investor. You should instruct that agent on what types of property you want and expect him to bring you. Let the agents know what CAP rate you expect and the NOI you are looking for (they are both related).
I have a Fiduciary Buyers Agreement I use with agents when representing me. I want them to go beyond the call of the home selling agent. I expect them to work the expired and the FSBO market. I am not interested in the local listed market. I feel an owner is more motivated to listen to a reasonable offer after the property has been on the market and rejected by buyers for 6 or more months.
Your agreement with the agent says that YOU will pay his commission on any property he helps you buy. This makes his job of talking to unlisted property owners easier.
When talking to a seller, the agent needs to explain the ground rules; Mr. Seller, I am a real estate agent, but I am not calling for a listings, my client is paying the commission. I am calling to make an offer on your property subject to inspection. May I ask you some questions???.
I give them contracts and expect them to make offers for me on properties subject to inspection. You should also give them an advertising budget to run real estate wanted ads on your behalf.
Yes, work with more than one agents, this puts the odds in your favor of finding a good deal.
I locate properties in the newspaper and call the owner or realtor listed. I ask questions then I ask to see the property if I think it’s worth looking at… so I go by myself to see the properties. I am always asked if I’m working with an agent and I say “no, I will work with an agent who finds me the property.” I thought that if I did not work with an agent, the seller’s agent will be inclined to credit me part of his commission. I’m not sure if that’s the case, but one agent already offered me a rebate of $3,500 if I bought the property she showed me. Now, properties here in the San Francisco Bay Area are very expensive and $3,500 of a purchase price of a $300k condo is not much, but it’s money in my pocket at closing. for FSBOs I talk to the owner themselves. When I look at a property myself, I don’t call any agent to accompany me. Why should I give them the commission? I found the property myself and if the buyer’s agent is willing to look after my interest, why should I bring another one in?