Attention: Agents Who Invest (long) - Posted by Sharonda

Posted by Tim Fierro (Tacoma, WA) on April 10, 2002 at 17:19:23:

Not any longer. I think most independent type firms will take anybody now-a-days. I have seen newbies enter our office with no experience and I have also seen recruitment notices from other independent firms looking for agents that said they didn’t mind experience. My thought is that the broker (company) is more concerned with income being generated from monthly fees as their primary reason for having as many agents as possible. As long as you are paying your ‘shingle fee’, they don’t care if you do 1 deal or 100 deals; their cut is still the same at a 100% office.

I even heard of a company who would take $1500 up front and no other fees. They would only take 3% of all business brought in. If you bring in a $5k check, they take 3% of that for their portion and you get the rest. This sounds pretty good for a newbie. They get 97% of everything they bring in but they have to put an up front money of $1500 to be a part of the broker’s agents. Newbies may have mentoring deals when they start where they would lose 25% to a fellow agent which would easily cover that first $1500 instead. They didn’t have a requirement of experience so they may accept newbies in the field.

Attention: Agents Who Invest (long) - Posted by Sharonda

Posted by Sharonda on April 10, 2002 at 07:53:48:

These questions are mainly for the realtors/investors but anyone should feel free to add any comments.

1-Did you become an agent to increase your effectiveness as an investor? It seems that while agents can use MLS to learn about different markets in their area, run comps, and see listed bank foreclosures, they still need other agents to present offers and may have to forgo a commission when purchasing properties.

2-Did you begin investing when you first received your license or did you list and rep buyers as a traditional agent before beginning your REI business?

3-If you began looking for deals the minute you got your license, how did you get your managing broker to cooperate re: avoiding extensive (i.e. weekend) desk duty, marketing (paid for by you) aimed at getting listings/buyers, monthly sign fees (some cos. just bill all agents for listing signs), doing other people’s open houses, office voicemail, mentoring from experienced agents etc.? Did you just tell him/her directly that your primary interest is to invest in RE yourself and that the volume of deals you will consummate will produce $ for the office (especially listings from other investors)? If so how did she/he react?

4-How do you deal with the additional disclosure required and potential liability that comes with being an agent and a creative investor?

5-Do you work with investors? How do decide between keeping a deal for yourself and passing it to one of your investors? Do you have your investors sign buyer agency agreements? Aside from leads for listings (unmotivated sellers), or listings on homes that the investors might sell, what “compensation” does the investor give?

6-Aside from advertising in the newspaper, what other methods would you suggest someone use to find a creative RE agent? I find that there are plenty of investors that say they need a creative agent, but few who actually are agents.

7-Given the associated costs of NAR and local entities’ dues, MRIS subscription fees, desk duty etc., as a non-traditional agent that mainly does his/her own deals, if you could either REI from home full time (spouse holds down fort) or become an agent that REI, which would you do?

I apologize for the length of this post but the answers would really help me and probably many others on this site.

Thanks,

Sharonda

Re: Attention: Agents Who Invest (long) - Posted by eric-fl

Posted by eric-fl on April 11, 2002 at 10:18:55:

  1. Yes

  2. The former

  3. “Referral Associate” pitch - (search archives)

  4. The way I see it, there is no additional liability, since I’m not doing things different either way. If I’m doing something as an investor that an agent couldn’t do on their own account anyway, that should raise a red flag. The standards agents are held to are actually pretty minimal. Know the law, treat people right, and don’t try to hide anything, you don’t need to anyway. As far as disclosures, just do them. All of them. I often had people sign stuff I’m not sure they needed to sign, but I did it anyway. It’s just another piece of paper to them.

  5. No, not as an agent. As a principal, sure, but never as an agent. Too many seminar-grads and tire kickers. I eventually stopped working with other people altogether - either I’m a principle, or I’m out of it (see Referral Associate, above).

  6. Local investor clubs. There’s usually a handful at every meeting, many eager to work with investors.

  7. REI from home full-time, if I understand your question correctly. Real estate investors make more than agents, period. You get 168 hours a week, period. You can spend that time buying & selling to increase your own wealth, or representing others who are doing their own buying & selling. Guess which pays more?

Re: Attention: Agents Who Invest (long) - Posted by Tim Fierro (Tacoma, WA)

Posted by Tim Fierro (Tacoma, WA) on April 10, 2002 at 11:06:48:

  1. I became an investor to increase my effectiveness as an agent, not the other way around as you suggest. I do like the tools available to help identify comps and research. I do not need another agent to put in offers for me, and I never let a commission go.

2)Started as a traditional agent, then found the error in my ways of thinking that left too much out there for others, and not enough for me. I had the scraps (commissions), but the meal was still there for someone else; the investor.

  1. I work as an independent and pay fees to my broker per month for hanging my shingle, and per deal to pay for miscellaneous fees, and a few dollars per month in office supplies. This does not include MLS dues/access and other tools of the trade that I need. In setting myself up this way, I am not at the will of the broker to work desk duty, phone duty, or what ever would be required of a broker who split fees with their agents. 1 deal a year pays for all that year’s fees; the rest are all 100% profit. As an independent, I am at my own pace to bring in any deals and there is no difference if I bring in a retail client or I bring in a deal for myself.

  2. Disclosure. Disclose up front that I am investor and write everything down in the contract. From there, it is fully understood that I intend to purchase and then to make profit on this deal.

  3. I work with investors. If I can’t do a deal or can’t solve the problem, I will pass it on to another. I never have any one sign buyer agency agreements for a fee or exclusivity. I am not sure what you are getting at with the last line of this paragraph.

  4. Locally network with other investors will help guide you to an agent who works with investors. Talking to agents 1 on 1 to find out if you click with them and they understand what you want from them.

  5. You write long sentences like I do. :slight_smile:
    If you are an investor, you do not need to be an agent. If you are an agent, you really should be an investor too.

Hope the above helps out your thought process.

Re: Attention: Agents Who Invest (long) - Posted by Sharonda

Posted by Sharonda on April 10, 2002 at 14:07:10:

Thanks so much Tim!!! Greatly appreciate your comments. I think that the “hanging license” deal would be easier to negotiate with some traditional experience. What do you think?

-Sharonda