“Pocket Listing” is o.k.?
I am NOT against RE agents who prove themselves trustworthy.
I do find folks in any field who are dishonest; we just happen to be talking about RE here.
I actually think there are more shady investors than agents.
I still think that many agents do NOT follow the standards by which they are supposed to be bound.
It is not a phobia.
I have just seen and heard of it happening.
I have been looking for property through an agent for months now.
After several showings with no offers from me the agent started sending better things my way. Properties and sellers that might actually work out with a little negotiating.
I told the agent to never be less than honest with me and they have not.
They have even offered up information about deals falling apart after inspections have been done.
I don’t want to argue for argument sake. We apparently are just going to see the opposite sides of the coin to some degree.
R.E.Agents Yelling: You Need License to Do That! - Posted by Sharon
Posted by Sharon on December 30, 2004 at 09:12:35:
Hello.
About 2 years ago, I use to frequent this more a lot to get educated on doing lease options. I learned so much and was ready to get started until I start procrasinating.
Now I’ve written down my real estate goals for 2005 and have begun to take action. My primary focus is to generate some fast cash by doing co-operative assignments where I use the sandwich lease option technique and assign the deal back to the seller…so I wont be in the middle. Simply collect the option money from the TB as my consulting fee.
I started advertising to get the phone ringing to find deals. So far, I have received calls from R.E. Agents pretending to be motivated sellers and inquired about how my program works? Once I explained the program to them, they yelled you can’t do that without a license! I will make sure to report you…blah blah…obscenities!!
No matter, how much I explained that I don’t need a license because I will be a principle in the contract…who have an option to buy as well as assign the property with the Seller’s permission…it’s ethical and legal…
Anyway, I’m getting frustrated already because the Agents have already put doubt in my mind that this technique CAN’T work here in St. Louis, Missouri.
IF you ask me, the R.E. agents are very “narrow-minded”…and was trained only ONE way of putting a seller and cash buyer together to collect a commission. So sandwich lease options, assignments, and other creative ways to “wheel and deal” in real estate is FOREIGN to them…
I’m still trying to find that elusive Real Estate Attorney who I can use to give me references and show credibility that what I’m doing is legal, and possibly ease the mind of potential motivated sellers I’lL come into contact with… Unfortunatively I haven’t been able to find a Real Estate Attorney that understands the basics of a sandwich lease option.
Careful about where you get your advice - Posted by John (OR)
Posted by John (OR) on January 05, 2005 at 09:51:50:
Two comments and maybe this was covered in all the other posts.
RE agent licenses are state regulated so what is legal can and
will vary by state.
Most agents deal with retail buyers and sellers. Few understand
investing. Many are part time. Few make serious money or consider
RE as anything more then a way to make a commission. Some are
very good at what they do.
All in all I would not get advice on RE investing from an agent until
I actually saw their portfolio of properties that they own. Never take
financial advice from poor people. Do not get RE investing advice
from people who do not invest in RE.
Have your seller buy you out… - Posted by MicheleCO.
Posted by MicheleCO. on December 30, 2004 at 23:49:41:
Instead of assigning your contact for a fee… Charge your seller a fee for releasing your contract. This is called a “buyout”. If your seller doesn’t have the money to pay you upfront, you can secure your position with a note and deed of trust or mortgage and be paid as a leinholder at the closing.
Posted by DP (ON) on December 30, 2004 at 23:04:49:
I suggest contracting with the seller and assigning to the buyer. This is the safest and cleanest way of doing a cooperative assignment and eliminates any hint of impropriety on your part. You simply negotiated a good deal and passed that deal on to someone else, nothing strange about that, and in NO WAY are you acting as a broker. Receive your profit as an assignment fee, not a consulting fee.
Posted by Mike-OH on December 30, 2004 at 17:47:13:
Sharon,
It sounds to me that you ARE acting like a real estate agent without a license and are subjecting yourself to whatever civil and criminal actions could be taken.
As for the responses to your question, I AM SHOCKED that people would advise you to not explain your program over the phone and to be evasive. WHAT BETTER PROOF IS THERE THAT YOU ARE DOING SOMETHING WRONG THAN NOT BEING ABLE TO DISCUSS YOUR DEALS OPENLY!
As part of my real estate business, I do rentals and lease options. I do everything completely legally and DO explain my program to potential customers on the phone. There is plenty of opportunity in real estate without having to resort to shady or illegal deals.
This ad seems like you are trying to assist people in selling their houses. It appears as if you are looking to sell their houses for them (the job of a RE agent). It does not reflect that you intend to act as a principal (as you should). Some real estate agents may interpret the ad this way and immediately become hostile and vengeful.
The ad also seems to be targeting those who have been trying to sell their houses and cannot. Most likely their houses are listed. Again you are messing with RE agents and their customers. You dont need to do that.
Why do you even mention your “lease option program” at all? What program are you talking about? You should have no specific program. Quite simply you are looking for people who want to sell houses with issues. They come with different problems. They come with different stories. So you ought to have different tools in your tool kit. People want their problems solved period. They dont care what you call what you eventually did (sub2, l/o, seller carry, or whatever).
You should start advertising as a principal. What does a principal look to do? You buy houses! Simple. When prospects call, and after listening to them, tell them that you can offer to buy at 50% LTV, or offer to lease/option the property (which was your intention all along). You will acheive the same result.
Sharon, change your ad. Start to sound like a true principal, and you’ll be alright.
One more thing, when a prospect calls, after listening to them for a while, ask them if they are an agent. If they say “yes”, yell “GET OFF MY PHONE!!!” and slam the phone down! Actually dont do that. I was just kidding, but you get the point. Politely explain to them that you are not interested in agent deals and that you are only looking to deal with principals. Be polite, but be curt and brief. Revenge is sweet.
Re: R.E.Agents Yelling: You Need License to Do - Posted by Jason (SC)
Posted by Jason (SC) on December 30, 2004 at 17:02:55:
A real estate agent’s job is to bring together a buyer and a seller and in return they get a commission or a fee for consulting.
so i’m sure they all look at you as competition. Since your basically doing the same thing? you are uniting a seller and a buyer and taking a fee? If you are advertising heavily be prepared to deal with this. A lot of creative RE investing falls into the gray area. A lot of agents see this as practicing without a liscense.
I’m an agent I will tell you from my experience working with agents, a lease option and a lot of creative ideas are foreign to the majority of them. A lot of agents know how to work conventionally and thats about it. There really should be a lot more training or education involved with being an agent, but instead in most states its $400 and a 2 week course. Then a lot of offices give you a phone book and tell you “start calling, good luck”
You always could go get a RE liscense? In most states within 3 years you can be a liscensed broker then its all legal?
Posted by Anne_ND on December 30, 2004 at 12:23:41:
Hi Sharon,
I lived in St. Louis for 7 years and loved it. What a wonderful city. And how I wish I’d known about real estate then, because my impression is that it’s a great town to be doing CREI.
It sounds to me like you are walking a very fine line here with what you are doing. Calling the option money a ‘consulting fee’ is what’s getting these agents mad at you. Stop that right now. If you’re a principal then you’re not consulting.
Why have you chosen sandwich lease options? Why not flipping or mobile homes? So many new investors re-invent the real estate wheel when they get started. St. Louis could be a great place for flipping, that’s where I’d start if I were you.
Scientific fact: 99% of agents are morons - Posted by DP (ON)
Posted by DP (ON) on December 30, 2004 at 12:15:27:
Sharon, the simple fact is 99% agents have no clue what the law says. They’re just repeating what they’ve been brainwashed into believing. Obviously if everyone knew they could buy and sell all the property they want WITHOUT paying for a license, brokers wouldn’t have a functioning business model anymore.
As has been stated, DO NOT explain your program when someone asks, instead go straight into qualifying them. You will quickly weed out the agents because they don’t really have a house for sale and will soon trip themselves up in their own lies.
As has been mentioned, you don’t need an attorney who understands the concept. If you want to you can have any real estate lawyer look your contracts over to make sure they comply with local laws.
What you do need is a good mortgage broker/loan officer who can run your prospective buyer’s credit and set them up with mortgages when the time comes. You can use them as a reference.
Motivated sellers don’t care if what you’re doing is legal, they care whether you can do what you say you can. YOU are the one who needs to set their mind at ease about any questions they may have.
R.E.Agents Yelling: You Need License to Do That! - Posted by Mike (WA)
Posted by Mike (WA) on December 30, 2004 at 12:13:52:
What recently got my phone ringing off the hook was an add I placed with a lower than normal price on a 4 bed house (median price would be around 210,000) - something like
City Name - 4 Bed/1.5 Bath, huge yard, 5 min to city. $199,950 or Rent to Own! (425) xxx-xxxx
Very cheapy, but my god I got 7 calls yesterday of which only 1 was an agent (not looking to scalp a seller.) I made about 4 good contacts with people looking to buy a house with me yesterday
Re: R.E. You Need License to Do That! - Posted by gerald(tx)
Posted by gerald(tx) on December 30, 2004 at 10:43:42:
Sharon, you don’t need to be explaining your program over the phone. All you need to do is to find out if the seller is motivated or not.
If you are getting calls from realtors, it sounds like you are advertising a gimmick in your ad copy. If so, you are getting too detailed up front.
Now having said all this, — when you can assign the contract back to the seller, a judge could very well interpret this as acting without a RE license.
You are just getting started, yet you are more clever than the typical newbie, so you want to introduce a new invention/plan that no one has ever thought of…
R.E.Agents Yelling: You Need License to Do That! - Posted by Clair-MO
Posted by Clair-MO on December 30, 2004 at 10:37:51:
Sharon, Please don’t doubt yourself because of some narrow minded agents in your area. I keep telling myself, “How many agents do I know who are millionaires?” In the 10 years I have been in business I have met only two brokers who were millionaires so I ask them what they do themselves and I was surprise my their answers.
They delegate the agents under them to do what ever they need to do to get the deal done. Even offering their commission if the buyer needs it to make it a deal. If you understand the basics of lease options why do you need a real estate attorney? I do lease options all of the time and don’t use an attorney. Once you do a lease option with a tenant buyer ask permission to use them as references that should give you the credibility you need with sellers. I’m from Springfield, Missouri.
Re: R.E.Agents Yelling: You Need - Posted by Rob FL
Posted by Rob FL on December 30, 2004 at 10:33:49:
As John said, don’t tell anybody about your program. If someone asks a question like that, I normally tell them that I have several different programs and I need to try to feel out their situation in order to figure out what will work best for them. Ask them about their situation and property and let them do most of the talking.
As for practicing real estate without a license. If you have buyers you are working with to find properties to put them in, you are probably violating the license (or at least skirting it) even if you eventually put the property under contract. On the other hand if you have properties already and are trying to sell buyers your properties, then you are acting as a principal and should be alright.
R.E.Agents Yelling: You Need License to Do That! - Posted by John DFW
Posted by John DFW on December 30, 2004 at 09:28:07:
When someone asks how your program works… don’t answer them… or say ‘there is no program’ and start asking them about their house and situation… Always answer a question with a question…
Posted by Philip on December 30, 2004 at 16:24:56:
I want to more fully understand flipping.
Can a mere mortal do a simultaneous close?
It sounds convoluted to me.
Also, what is your shortest explanation about how to keep a stream of motivated sellers calling you. Homes or MH’s.
I am starting to get my toe in the door as far as Park owners in my area(very few have managers in my neck of the rural woods) so the mh thing is coming around.
I want to know about site built homes.
The RE agent I have has not shown me anything that was not at LEAST low retail.
What is your favorite reading on these subjects.
I trust your judgement a great deal.
Philip
Posted by Sharon on December 30, 2004 at 13:02:00:
Hi Anne, please to meet you.
I’ve lived in St. Louis all my life, and I agree; it’s a wonderful city for creative real estate investing.
It’s just “this situation” with the negative R.E. Agents responding to my ad; It’s really starting to get on my nerves! I’m learning quickly, that I can’t let “negative-ill-informed” people get next to me. I simply must “brush it off”, and keep pushing myself to do this business and be successful.
The reason why I picked sandwich lease option because I’ve read on this board that it’s relatively an easy way to get into real estate investing and make some quick cash. With “co-operative assignment” it’s easy for me to get in and out of the deals. I don’t want to stay in the middle of sandwich lease options. Just simply trying to generate some fast cash. I plan on doing short sale deals, too. Properties are going into Foreclosure at an all time HIGH here in St. Louis, and I see a way to “cash-in” utilizing the short sale technique.
You’re absolutely right about me “walking a fine line” by bringing up consulting fee. I will stop doing that because as you’ve said I’m a principle in the deal and its very ethical what I’m doing in helping others, and make money at the same time to take care of my children and pay bills.
Thanks for your advice, and much success to you in 2005!
