Making offers on multiple properties with realtors - Posted by Jason

import · December 26, 2007, 3:41pm

Posted by David on March 17, 2009 at 16:40:00:

tricie,
My niche is bank owned foreclosures so that the agreement I use is a broker agreement which can be used for either single family homes or multi family

import · December 26, 2007, 3:41pm

Posted by Jason on December 26, 2007 at 16:41:31:

I’ve thought about making offers on properties through the MLS with a Realtor. I’d like to make very low offers on multiple properties and see if any are motivated. Is there a way of doing this without putting up earnest money with each offer?

Is it possible to put an inspection contingency in a Realtor’s contract so that the offer could be less or canceled if there are multiple repairs to be done?

Let’s say that I get lucky and get a few positive responses. Is it possible to assign the deal to another investor using a
Realtor’s contract?

Thanks for the help

Jason

import · December 27, 2007, 4:45am

A Different Perspective - Posted by Jimmy

Posted by Jimmy on December 27, 2007 at 05:45:15:

I almost never buy listed properties. which means I almost never have to deal with brokers.
When I do want to make an offer on a listed property, I DO IT ON MY TERMS. I might allow a broker (to whom I owe a favor or to whom I want to throw a bone) to be included in the offer as my rep. But I’m gonna write it up and send it over. and I will always have a termination option in there if my inspections turn up things I don’t like/want. and I will offer the price I want to offer, with minimal input from the agent.
Sometimes, I am not in a sharing mood, and I write up the offer all by myself, without a buyer’s rep. I put in a special provision that says the seller will throw me a 3% rebate off the final sales price. I then cite a General Counsel’s Opinion from the Texas Real Estate Commission which allows exactly this: since I am a principal to the deal, I CAN tak the buyer’s side commish. Younger listing agents will freak out and scream and holler. But once they talk to the gray-haired boss, they shut the he!! up.
Bottom Line: Don’t let brokers control how you do business. and don’t let them influence the way you do biz. If you think a property is ripe for a lowball, you should absolutely send in a lowball.

All of this assumes you know what you are doing, however !!!

import · December 27, 2007, 1:20am

Re: Making offers on multiple props with realtors - Posted by GS

Posted by GS on December 27, 2007 at 02:20:59:

I must be the oddity here.

I work with a realtor all the time and put in several offers each month.
I do however buy a couple of them a month and buy with cash.

He sends me daily MLS searches and has even gotten me in contact
with an auctioneer that works in there office.

Now I have had to cultivate this relationship as well. But once he saw it
was worth his time, he gives me 110% of his time when I need it.

The main problem when working with realtors, they are not familiar
nor are they comfortable with being creative.

But I have had great success working with my realtor.

If you plan to work with one, I would recommend one that gets fished
REO’s. They are usually lazier, but are more open to creativeness.

As far as EM goes, all of my contracts state that EM will be deposited
upon exceptance of contract.

If you do not have enough cash to hold 2 or 3 properties at one time,
then you may need to reconsider.

import · December 26, 2007, 4:57pm

Making offers on multiple properties with realtors - Posted by george

Posted by george on December 26, 2007 at 17:57:02:

You’re going to have to find a new, naive realtor who will work with you on fishing multiple low-ball offers. This is usually a poor use of time for the realtor. Experienced realtors like to work with more selective buyers who have money. Sounds like you’re short there. Your realtor would have to be awfully green to work with someone who didn’t have the ability to close if an offer was ever accepted.

You can work with one earnest money check made out to the title co. and a ‘subject to inspection’ clause is common in most contracts.

I would also get educated on wholesaling and contract assignments specfic to your state.

import · December 26, 2007, 4:53pm

making offers through Realtors - Posted by David MacGown-MI

Posted by David MacGown-MI on December 26, 2007 at 17:53:58:

Jason,
What is your exit strategy? do you plan to wholesale or rehab and sell retail? You really should try a few deals on your own before you searh for a Realtor. (driving for dollars) You get some experience under your belt so when you approach other real estate professionals you come across as professional rather than a seminar graduate. (They are a dime a dozen)
During this time look for an attourney that understands wholesaling and simultaneous closings. When dealing with fsbo’s on your own they can really be a great benefit. BTW, if you are wholesaling, you should be building your buyers list first, before you start looking for houses.

If you do decide to find a Realtor, I would recommend one that specializes in fixer uppers and REO’s but you really must educate yourself otherwise you will burn bridges with people that can help you in the future. To answer your EMD question…write a check and hand it to your attourney to be held in escrow. Insert in contracts, “Earnest money deposit is held in escrow with buyers attourney and shall be released upon acceptance of offer.”

There is usually an inspection clause built right into Realtor contracts (usually 2 weeks) This gives you ample time to have a home inspector do a thourough inspection to make sure the property has the right things wrong with it and then get a more accurate repair estimate from your contractor.

Don’t put any weasel clauses in your contracts, the only contingency you should insert is…“Offer is contingent upon buyer aquiring financing through blah blah blah hard money lender, a pre aproval letter from such lender is submitted with contract.”

This really is a requirement when working with Realtors and banks because without this contingency they will ask for proof of funds.

Most Realtor’s contracts are assignable but a lot of them cross it out (their contract their rules) especially if the property is bank owned. NO! you should not ask if you can use your own contact (screams newbie) and don’t push the issue about making the contract assignable, it don’t matter because you will do a simultaneous closing with your attourney or title company anyway, besides if you are planning on wholesaling you really do not want your realtor to know this, because once they get wind of it they will shoot the deal down. They can be ball busters if you don’t know how to play the game, but also your biggest asset once you know how to play. So really it is your best interest not to squabble about the and/or assigns in a Realtor contract.

While we are on this issue most Realtors will want to have their title company handle the closing including the title search. Don’t let it happen…stay in control! Just act like your doing them a favor (one less thing to worry about) especially if it’s bankowned. Say, “look it’s an REO so the title isn’t going to be an issue anyway, so why don’t I have my title company handle this. They are competent and professional as is everyone on my team. It will free your time up so that you can do the things you’d much rather be doing.”

David

import · December 29, 2007, 7:59am

Re: A Different Perspective - Posted by Natalie-VA

Posted by Natalie-VA on December 29, 2007 at 08:59:39:

Hi Jimmy,

Just looking for a clarification… You’ve mentioned before that you can take the buyer’s side of the commission in Texas.

Is this because you are an attorney, or just because you’re a principal in the deal?

–Natalie

import · December 31, 2007, 11:32am

Re: Making offers on multiple props with realtors - Posted by James-Ca

Posted by James-Ca on December 31, 2007 at 12:32:08:

Can you clarify what you mean by “get fished REOs”??

Thanks

import · December 31, 2007, 10:55am

Re: Making offers on multiple props with realtors - Posted by Yogi (WI)

Posted by Yogi (WI) on December 31, 2007 at 11:55:52:

What do you mean by ‘gets fished REOs’?

import · March 16, 2009, 7:34pm

should have read that article first - Posted by Tricie

Posted by Tricie on March 16, 2009 at 19:34:55:

HI, i am a single mom trying to get my realestate buisness of the ground wholesaling,I am new to this and i took a wrong step a head of my self with out doing my homework.i called a realtor with out doing more research.so as i began to read your article making offers through realtors which was right on point to read it in time,before getting ahead of myslef calling realtors and don’t no what i want and knowing the real ball game to say,i realize that i need to get a team together.such as title company,buyer’s list first,a funder to put on that pre-approval etc. i am really glad i read this so i don’t make mistakes and wasting peoples time.Thanks!!!1

import · December 31, 2007, 12:14pm

Re: making offers through Realtors - Posted by James-Ca

Posted by James-Ca on December 31, 2007 at 13:14:26:

David:

You have great points in the above post. When you make multiple offers, do you put in additional clause to safeguard the buyer if all the offers are accepted ? Do you put in a clause that states “Buyer has the final right of refusal ?” or other similar clause? Thanks

import · January 1, 2008, 7:42am

Re: Making offers on multiple props with realtors - Posted by GS

Posted by GS on January 01, 2008 at 08:42:20:

I mean realtors that receive REO’s on a regular basis. Most banks hire
asset management companies to sell their properties because of the
increase in foreclosures.

If you create a good relationship with one of the realtors that handle
alot of REO’s and begin to purchase them through them, they are likely
to let you know when new ones come out.

In my state, when a realtor receives a listing, they have 72 hours to list
it on the MLS. So if you become a good client, the realtor may let you
know about new property before it hits the MLS.

Ethically or not, this happens

import · December 31, 2007, 7:29pm

Re: making offers through Realtors - Posted by David MacGown-MI

Posted by David MacGown-MI on December 31, 2007 at 20:29:23:

James,

I don’t put too many contingencies in my contracts because I deal mainly with REO’s. There is a direct correlation with the number of contingencies and the chance of your offer being rejected.

Here are the clauses I put in my contracts:

inspection clause (built right into many broker contracts)
financing contingency
earnest money clause
performance clause
(This states that the only legal action they can take for non-performance is forfeiture of my earnest money,
so they can’t sue me.)
And/or assigns
(for non-bank owned properties, this allows me to assign the contract)

David

import · January 1, 2008, 9:37am

Re: Making offers on multiple props with realtors - Posted by James-Ca

Posted by James-Ca on January 01, 2008 at 10:37:40:

Ok, I agree with such relationship will be helpful. Thanks for clarification.

import · March 16, 2009, 8:02pm

Re: making offers through Realtors - Posted by Tricie

Posted by Tricie on March 16, 2009 at 20:02:37:

can i use this in a multifamily deal aggreement

import · January 1, 2008, 9:36am

Re: making offers through Realtors - Posted by James-Ca

Posted by James-Ca on January 01, 2008 at 10:36:12:

Thanks, David. This is helpful.