Posted by JohnBoy on January 21, 1999 at 11:50:57:
LOL. Not if I can help it!
SOME realtors don’t know - Posted by Ted(OK)
Posted by Ted(OK) on January 20, 1999 at 13:11:48:
I have seen many messages on this board dealing with realtors and using them versus not using them etc and just thought I would share something that happened today.
I was just amazed today when I was talking to a realtor on a FSBO house that I am selling. This realtor is working for the buyer and collecting a fee from them. Anyway I was talking to the realtor and was asking her if she dealt in investment property and about any other properties that she had for sale and that I was interested in doing a 1031 tax free exchange and she did not have a clue what I was talking about…this lady has been in real estate for 20 years.
Oh well that my steam for today and I won’t be looking for her to find any deals for me…
Tens of thousands - Posted by John Behle
Posted by John Behle on January 20, 1999 at 23:51:14:
How many tens of thousands of agents are there? Yet, there are only a few hundred that have much of a clue about 1031 exchanges. For a nice site about exchanges, check out www.infoville.com/nce for the National Council of Exchangors.
not only Realtors ! - Posted by Laure
Posted by Laure on January 20, 1999 at 23:10:20:
I have had large CPA firms doint my taxes for years due to the complexity of owning another business. I am constantly disappointed at having to pay so much and not getting advise. Like why wasn’t I encouraged to form a corporation for my real estate years ago? I just realized through this board how much money I have thrown away to the Big Uncle through extra taxes I didn’t have to pay !
Re: SOME realtors- Multiple Choice - Posted by Bill Gatten
Posted by Bill Gatten on January 20, 1999 at 19:44:09:
I agree, and it’s a shame how little some professionals actually know about their professions.
A Realtor’s not knowing about Like-Kind Tax Deferred Exchanges could cost their clients millions; as well as costing them, themselves, their licenses and careers: not to mention their homes, cars and many thousands of dollars in law suits. It’s a little like a cook at Carl’s Jr. not knowing where the Secret Sauce is kept (or a cop not knowing knowing how to shut his siren off).
Consider this: A Realtor sells a commercial property for a million dollars that was purchased 20 years ago for $150,000, and which now has, say, $750,000 in loans against it. The million bucks comes in; the Realtor and his/her broker pocket $100,000 in commissions, the loans are paid off; the closing costs are paid; and the seller walks away with $135,000. Then at the end of the year, the seller gets hit for $250,00 in income tax, to be paid immediately out of the $135,000 “profit.” The seller is now short about $115,000 bucks, and perhaps gives a teensy weensy bit of thought to the fact that his broker made $100K, and he, himself, didn’t make a cent and is in the hole $115K.
He is then asked by his accountant why he didn’t consider a 1031 tax-deferred exchange. He says, “I don’t know… I asked my Realtor about that, and she said she didn’t know what that was, and that it would probably hold up the deal [and her commission] anyway; and that I’d be better with a straight sale.”
Multiple Choice question: If, in the above scenario, somebody gets their buns sewn shut in a lawsuit who will it likely be? A) The Realtor and her Broker B) The IRS C) The Buyer D) JPiper
Re: SOME realtors don’t know - Posted by Gary Huron
Posted by Gary Huron on January 20, 1999 at 19:08:56:
To find out about 1031 exchanges only takes one or two phone calls to either a real estate attorney or accountant. A 1031 exhange can save you thousands in tax dollars and give you move bucks to invest. The best thing about a 1031 exhange is that it is not complicated at all to understand.
Being a REALTOR/Investor I find how much very little knowledge most REALTORs have when it comes to real estate investing. Most of them don’t have a need for that kind of knowledge. Still, use them for finding deals and you take over from there.
Just my opinion.
Re: SOME realtors don’t know - Posted by JPiper
Posted by JPiper on January 20, 1999 at 13:54:18:
Most Realtors don’t know anything about 1031 exchanges…not too surprising since most of their sales involve owner occupied property which would not be subject to a 1031 exchange.
What’s equally surprising is that most investors know little or nothing about it as well.
The lack of knowledge on 1031 exchanges on the part of the Realtor would not in and of itself disqualify them from locating a property for me…just an opinion.
Re: not only Realtors ! - Posted by JohnBoy
Posted by JohnBoy on January 21, 1999 at 24:58:34:
I know what you mean. I’m always having to point out things to my accountant. I even had to educate one once on how to take advantage of the “extra earned income credit”. He had to read up on it because he said he never done a return with one before.
Next time your out looking for an accoutant give him a simple pop quiz test. Ask him what 1 + 1 =???
Correct answer: What do you want to be? LOL
Re: SOME realtors- Multiple Choice - Posted by George
Posted by George on January 23, 1999 at 22:12:37:
Not that I’m defending the realtor, but why didn’t the seller ASK his accountant about it. To take the realtors word that he’d “probably” be better off with a straight sale is negligent on the sellers part.
Re: SOME realtors- Multiple Choice - Posted by JPiper
Posted by JPiper on January 20, 1999 at 21:35:54:
Pretty funny!! For those answering D) you should know asset protection has moved to the top of my priority list!
Re: SOME realtors- Multiple Choice - Posted by SCook85
Posted by SCook85 on January 20, 1999 at 20:42:12:
Realtors are paid to list and sell properties. They are not tax advisors nor legal professionals. In fact they could be taken to court if they gave you tax advice or legal advice. It is the investors job to know how to protect there buts as far as taxes are concerned. The realtor only needs to worry about there own taxes that they make on there comission check. There clients taxes are none of their business. If you find a realtor who understan exchanges that is a plus but not a requirement.
Re: SOME realtors- Multiple Choice - Posted by Rob FL
Posted by Rob FL on January 20, 1999 at 19:58:23:
Most of the commercial realtors I know are the creative ones. To sell a million dollar piece of commerical property (especially if you specialize in commercial) you have to know a lot more about creative deals.
The realtors who don’t have a clue on creativity are the ones selling mid-to-lower priced single family residential (about 70% of the realtors in other words).
Re: SOME realtors don’t know - Posted by Paul Belli (Stl MO)
Posted by Paul Belli (Stl MO) on January 25, 1999 at 19:49:32:
In talking with different investors and listening to advice given in various books and tapes, it seems that some investors like to have agents find the deals AND submit the contracts (thus avoiding having to deal face to face with the seller during “negotiations”) while other investors like to “take over from there” (as you put it) and meet with the seller themselves.
As a Realtor, do you think the average agent dislikes investors actually doing the face to face work that they typically like to handle on their own? I’m new to REI and want to work with agents within the confines of their necessary role but I don’t want to be subject to inflexible agents who never learned how to “draw outside of the box” or control freaks in areas that I wish to tackle myself. I just want to know my boundaries regardless of “tradition.” Thanks!
Re: SOME realtors don’t know - Posted by SCook85
Posted by SCook85 on January 20, 1999 at 15:29:04:
My realtor doesn’t know a thing about 1031 exchanges but I can’t hold that against her because neither do I. I have seen a lot about them on the board but have not taken the time to learn about them yet. I have a lot more to learn before I start worrying about them.
The point I am trying to make is that my realtor knows nothing about them yet she constantly finds good deals for me.
Re: not only Realtors ! - Posted by JPiper
Posted by JPiper on January 21, 1999 at 02:00:51:
You mean you still have earned income??
Re: SOME realtors- Multiple Choice - Posted by Bill Gatten
Posted by Bill Gatten on January 24, 1999 at 12:51:48:
I agree with you in principal (without a doubt). However, any comment or action by a Realtor, which would lead a client to loose money, is either: 1) proffering accounting advice (in the reverse), 2) giving the wrong Real Estate Agency advice, or 3) negligence. More importantly, however, is this: Was the Realtor professionally remiss in her understanding of tax law as pertinent to her specific (licensed) field of expertise (for which she charges a “professional” service fee), or not?
Analogy: Should a licensed surgeon know how anesthetic gases and neuromuscular blocking agents work in combination, and what their inherent interactions, risks and benefits are? or not: even though such agents are administered by another type of doctor with another type of license?