John Behle-Cash Commission to Realtors? - Posted by HankTX

Posted by John Behle on October 28, 1998 at 13:45:48:

I’m not sure which you are referring to, so I’ll address them both.

ON PROPERTIES I offer a cash commission to agents only through their broker. In the article I referred to on “A Million a Month”, I was the broker and their commission came through me. If I were not a broker, I would look for a broker that is part time, inactive or needed more business and build the brokerage around him.

As far as individual agents, they can be a wonderful resource if you just know a few things.

1 - DO DEALS WHERE THEY GET PAID. Of the hundreds of technqiues for buying properties, there are many that can get you a great deal, provide cash for the agent and still be nothing down. It’s just a matter of learning the techniques that work in this way. It is a waste of time to try and get agents to do many of the nothing down techniques. Many either provide no cash commission or incentive for the agents or leave them with ethical dilemmas. One of those dilemmas is when you are looking for deals that any bright (does weed out many) agent would buy for themselves. Most of my deals are ones the agent either lacks the technical expertise or resources to do themselves.

2 - TEACH THEM THE HOW TO FIND THE DEALS. Agents aren’t taught to recognize deals. Especially the more creative deals. Many of the deals I do, leave the agent totally puzzled as to what happened. Some sense I made a profit, but not how. They just know they got paid. With my brokerage, I held weekly sales meetings teaching the agents clues to look for in listings. Clues like low down seller financing, existing private loans, rehab properties (fixers) or potentially below market deals. Some of the best ones come through “White elephants” - in particular properties that are way overbuilt for the area. Foreclosures, bankruptcy and estate deals are always good.

Do not try to teach the agents how to do the deals, only the clues to spot. If they know you can close and they know they will be paid, then they will work for you and be a valuable resource.

3 - THE RIGHT AGENT. Most agents are marginally competent, set in their ways, under educated and focused on the act of selling residential property to owner occupants. I don’t argue with that. There’s more commissions to be made doing that in a normal market than working with potential investors.

My experience in finding the right agents is: the new ones that are not set in their ways, the mavericks that like to do their own thing and the ones trained and geared towards investments themselves. The average agent has no interest in dealing with investors. They - like many beginning investors - only see the agent as an obstacle in the deal. My ad that I shared in a post a couple days ago hits agents from all angles.

AS FAR AS NOTES GO - I do not offer agents commissions or referrals in note deals. First it is limited or prohibited in many states. Second - I don’t need to. Agents always have a commission motivation coming from another source. The note they bring me usually is a part of the deal they are trying to close. Sometimes it is an un-related note from an earlier transaction that the buyer wants to sell to get more cash to buy the deal the agent is working on. The agent or mortgage broker may refer this buyer to get more cash, increase their income (amortized partial) or do some debt consolidation through selling the note to pay off debts (and change their debt ratios) or hard money to clean up debts or problems.

Sometimes the agents are just referring the note seller because they are a friend or past client. Also, agents bring me their commission notes to cash out (SPECIAL NOTE - make sure that is paid through their broker).

John Behle-Cash Commission to Realtors? - Posted by HankTX

Posted by HankTX on October 27, 1998 at 22:31:59:

john, you said you were drowning in email, that everybody
should post on the newsgroup instead of private emailing
you. so here is my post.

You mentioned that as an incentive you offer a cash
commission to real estate agents as an additional
incentive to work with you. What is the process exactly?
Usually it takes a long time from the close of
the deal until the agent gets their commission
from their broker. Do you write up a contract
to buy their commission at a discount? Lots
of details would be appreciated. Thanks for
your intelligent posts and feedback.