Posted by David Alexander on October 11, 2000 at 01:16:18:
Guess the reality is… I started a debate I had no way of defending and was only throwing out an opinions not neccessarily fact based. But thinks for the head stretcher… 
David Alexander
P.S. I still contend that if realtors would learn to work with us and learn more about there clients situations and needs instead of substituting there own that they would make more money.
Why are you so afraid… - Posted by Angela , COLDWELL BANKER
Posted by Angela , COLDWELL BANKER on October 08, 2000 at 12:04:09:
I really enjoy this web site. I am a licensed real estate agent in Alabama.I just wander why so many people have negative things to say about real estate agents. Where are you finding the agents that you deal with? Do you do research before you trust them to help you with your investing? Real estate agents have a tough job. They do not get paid until they close a sale. Now if you are just using them for information and not giving them business, shame on you. I don’t blame them.I don’t mind helping anyone, but I have to put food on the table like anyone else.The real estate agents that I know are good people, always willing to help. I would love some replies. It will allow me to incorporate your suggestions into my business. I know that it is people like you that can make my business a success.
Re: Why are you so afraid… - Posted by Jim IL
Posted by Jim IL on October 10, 2000 at 01:00:37:
Angela,
Not to rehash what others have said, but I agree.
I can tell you that I have taken the time to talk to several agents about what I do, and how we can work together, both making money without wasting the others time.
I’d say that 9 out of 10 times this falls on deaf ears.
I’ll give you an example:
I talked to an agent about my methods of investing and showed her how we could possibly work together.
I tried to get her to tune into a sellers real needs, versus their wants.
She seemed to “Get it”.
Guess what?
She agreed to do this, and ask me for help if she needed it, and possibly bring me some deals as a result.
She never did.
Then, one seller called me a while back.
They were losing there home to the Sheriff’s sale the next week.
They were still listed with this agent, and had not sold the home.
I listened to what they had told her, and what they had gone through.
It was too late for me to take on.
They listed with her when they were only 2 payments behind.
Had she called me right away, we could have done something, and gotten her paid.
This home went to the sale and the sellers lost there credit, and the agent did not make a dime.
I would have surely paid her for the deal, as well as listed it with her if she only would have called me from the beginning.
I talked to her once when I was at her brokers office later, seeing another agent, and she told me, “Oh, Jim, good to see you, sorry I never called you about any deals, I just have not come accrossed any sellers that fit your profiles.”
She refused to think outside the box, and lost this deal and any others that might smack her in the face.
Too bad for her.
I did two deals with an associate in her office instead.
My advice to agents who talk to investors is to work with them for 1 month, and if they do not perform, chalk it up to a learning experience, and move on.
But, if they do this and the investor can perform, they may have a good solid income maker in that investor.
Just my $.02,
Jim IL
Re: Why are you so afraid… - Posted by Mark (SDCA)
Posted by Mark (SDCA) on October 09, 2000 at 10:58:33:
I am not afraid of dealing with agents. I just dislike with the incompetent agents. It is a waste of time and frustrating. Here is a sampling of gaarbage I have gotten from real estate agents.
“You cannot fill that offer form out yourself. It is against the law.”
“My broker will not present any offer with an AITD in it. That is bank fraud.”
“Unless it is a FSBO, you (the buyer) must be represented by a buyer’s broker.” (This what she came up with AFTER she had to consult with her broker and after she had refused to fax me a blank offer so I could make her an offer because “she doesn’t do business that way”.)
The problem is that California’s economy has exploded. Real estate prices have exploded so there are so many realtors who have had their license for 5 minutes. I love to deal with competent realtors who learn to understand my needs and try to service my account. There are oh so few of those and oh so many of the 5 minute realtors.
Regards,
Mark
Re: Why are you so afraid… - Posted by Rob FL
Posted by Rob FL on October 08, 2000 at 21:57:55:
I agree with a lot of what Ron said. Most of the problem with agents and investing is that the agent is really in the way of the investor. For creative offers the seller and buyer need to be dealing directly with each other, without agents acting as fiduciary middlemen. Most investor buyers have one way of writing up offers and most normal Realtors expect offers to be written up a totally different way except on junkers and listings where the seller indicates otherwise. I am a broker and I work with a few investors so I completely understand some of the struggles here.
After years of searching the MLS for deals I have come up with three categories of properties that the MLS is good for (1) Properties that are priced below market value. Usually these are fixer-uppers or foreclosures. (2) Properties where the seller is offering some type of seller-financing, lease option, assisting with costs, etc. and (3) Expired or about to expire listings.
Almost every other kind of creative or lowball offer on listed property is pretty much a waste of time in my opinion. All that ends up happenning is that the seller and the seller’s agent get pi$$ed off and the buyer’s agent looks stupid. At least that’s my experience.
I have listed a few services I provide to investors on my website. Feel free to look at it. It might give you some ideas. Sand Dollar Realty Group, Inc. The "investor friendly" Realtors. Take care.
Re: Why are you so afraid… - Posted by JoeS
Posted by JoeS on October 08, 2000 at 21:38:22:
I think Ron hit it on the head. Agents are usually nice people, and their fiduiary is to the seller, not us the lowball buyer. So they are apt to get a little testy at times with us, it’s probably after being skated by a client on a $200,000 sale!!. We should give them a break. But, on the other hand, there are agents out there who think they are experts in all fields, and they want to tell us how to run our business. What I do is interview agents until I got 4 or 5 who knew what I was going to do and would be willing to work with me under those terms. They are just trying to make a living, and it is not easy hustling houses the way they do it.
If I were an agent, I wouldn’t work with me - Posted by Ron (MD)
Posted by Ron (MD) on October 08, 2000 at 19:52:49:
I buy one or two fixer-uppers per month to rehab. I buy most of them through MLS and they cost between $15,000 and $35,000. My agent’s commission (after splitting it with his broker) is usually between $200 and $500. Then, when I fix up the houses and sell them for $70k - $80k, I find my own buyers – my agent gets nothing. Given those circumstances, what agent who is any good is going to chase fixer-uppers for me?
I do these cookie cutter (all cash) deals, not the creative deals that are often talked about here. If I were a “creative” investor (which probably also means I have no money – or, I don’t want to use any of the money I do have), I would be looking for realtors who want to spend a lot of time spinning their wheels making very low offers, or “creative” offers (which means that the seller, and probably the agent, aren’t going to get paid any time soon because “that’s not the way we operate”)?
We investors also say that there are no rules. We don’t have to put down a “customary” deposit. We don’t have to show proof of funds. We do want to assign our contracts who the seller knows absolutely nothing about. However, we do think realtors should follow by their rules. Our buyer’s agent should be happy to make lowball offers and not worry about being labeled an unrealistic lowballer in the market. The listing agent should perform his duty and present our “creative offer” as if it is in the seller’s best interest (when, in fact, it’s only in the best interest of the most desperate of sellers).
There are many, many wannabe investors tripping over themselves trying to make the big bucks. Why? Well, because big bucks can be made in real estate investment. If similarly big bucks could be made being a realtor who works for investors, you would find many agents tripping over themselves to work for us. The fact is, we are not a very profitable niche for the large majority of realtors.
When I get a deal, it usually means about $20,000 to me. I am very motivated and I know I’m going to run into dead ends before I find that deal. It’s worth it to me because I don’t need many of these deals to make a very good living. Realtors, on the other hand, don’t have the same kind of profit incentive per deal. They’re smart enough to go where the money is --at least the good ones are.
By the way, I solved this problem by getting my own RE license.
Re: Why are you so afraid… - Posted by phil fernandez
Posted by phil fernandez on October 08, 2000 at 16:51:46:
Angela,
I commend you for hanging around this site. I never work through realtors mainly because as David said below, our time is valuable to us.
In my experience it’s amazing how narrow minded realtors are. Often problems can be solved better other than waiting a year to find a bank qualified cash buyer. David mentions several scenarios where it would be in the seller’s best interest to take the sure deal on the table.
In the past I have tried to explain my creative offer to the realtor and why it would be a good deal also for the seller only to get a blank stare after my presentation and I’ve wasted my time.
Why work with a realtor who does not understand nor wants to learn the world of putting deals together creatively. Instead of putting two deals together per month, they could be putting another four together per month with me and make more money. But it just doesn’t register in their minds. Go figure. LOL.
Re: Why are you so afraid… - Posted by Tom
Posted by Tom on October 08, 2000 at 15:33:53:
Angela:
As you already know, 90% of the real estate agents that get their license are out of the business after two years. On the other hand my guess would be (just my opinion) that 95% of the people that try investing never buy more than one house. If you put those numbers together you have a whole bunch of failures.
Investors are trying to buy with little or NO funds. Agents are trying to represent what the agent thinks their seller wants, or (as David said in the previous post)their commissions. The two don’t play well together.
I am an agent who also invests, and I deal with investors as well as normal buyers and sellers. Most of the time the investor wantabes just aren’t worth the time that you waste with them because they can’t buy anyway. It’s much easier to go list a home and sell that home conventionally than it is to deal with an investor.
Now having said that, that doesn’t mean there isn’t a place for investors, I call inveators all the time for properties that don’t work well for convientional type stuff.
BEWARE, I have had investors buy fix-up properties, with full discloser of structural problems, do make shift repairs, without permits,than try to list them with out disclosing. What a great way to lose you license if you list it.
Re: Has nothing to do with being … - Posted by David Alexander
Posted by David Alexander on October 08, 2000 at 14:44:05:
Afraid… it’s what is the best use of your time.
Everytime I find a realtor I think understands what I’m looking for and that wants to look around the box to make some I’m usually sorely mistaken.
When I talk to realtors I tell them that I want the deals that arent their bread and butter deals, and that I would generally like to talk to the sellers to find out their needs. That’s where the conversations usually end because the realtors always feel that the “best needs of a client are served by getting the highest price”. That isnt always the case. Consider someone in foreclosure, divorce or making two house payments… sometimes it would just be better for the client to be rid of the house for peace of mind. Realtors in general only go after cash and highest price… most everything else is shut down.
To me it’s funny because they say they have a responsibility to the seller but yet only work on their needs … the highest possible commission.
Other thoughts… I have a realtor that at certain times picks up the phone to tell me about a house (motivated seller) I call and am able to put a deal together and the realtor gets a quick commission if a I buy the house and in a some instances a listing. These deals are usually easier because I have a greater ability to close than most JOE Borrowers out there. I mean the realtor doesnt have to pull teeth to get the deal closed. But even so after making the easy money they continue working on the deals where they are harder to close, shaving commissions etc.
At least with Investors as they are putting the deal together they are going to know upfroont how the deal is going to exit and how, and how much they are going to get paid and very often with little effort. Me I like my money to come to me with as little effort as possible.
I just dont understand, myself… If someone tells me they would buy 6 houses in the next month or two and I knew they had the proven ability to close and I was only closing 2 deals or so a month I’d give the Investors my attention.
David Alexander
Re: Why are you so afraid… - Posted by Lynn Hahn
Posted by Lynn Hahn on October 08, 2000 at 12:26:17:
Hello Angela,
There is good and bad in any profession, including investors. Just that fact that you are participating on Creonline shows that you are above average.
Investors often have problems with real estate agents because the investor is making creative, or very low offers and the agent does not understand creative real estate. “Most” agents are taught to handle plain vanilla transactions. Some agents even refuse to present creative offers (although we know they are supposed to present “all” offers).
Many times the problem is with the investor. The investor constructs an offer that doesn’t have enough cash to pay the realtor’s commission. Investors also usually put little or no earnest money down with a contract which makes realtors wonder whether the investor is serious. Investors often waste a Realtor’s time by asking them to do several CMA’s etc. without ever buying a house from them.
We prefer to deal with Realtors who are also investors. These Realtors have a better understanding of what we are trying to accompish. We currently do several “creative” transactions through a local Realtor every month. We love our realtor and she loves us. We know that we are very lucky to have an agent that truly understands what we are doing. We still run into snags with the actual broker who the agent works with, but we always get them worked out.
The bottom line is that if you want to work with investors you need to learn as much as you can about the way investors do business. You should even become an investor yourself (if you are not already).
There are many bad apples in the Realtor world, and there are many WANNABES in the investor world. Don’t waste you time with investors who waste yours, but pamper the ones who are serious.
Our realtor makes a lot of money from us and we make a lot of money from her.
Happy Investing!
Lynn Hahn
Re: If I were an agent, I wouldn’t work with me - Posted by Jim (Alaska)
Posted by Jim (Alaska) on October 08, 2000 at 20:44:31:
You say you solved the problem by getting your own RE license. This may work where you are, but here your license stays with the brokerage, you cannot hold it on your own. If you are not going to be productive and actually sell properties, no broker will allow your license to stay active. Here you cannot just “hold a license”. I suspect that because of MLS, this is the situation in many states. I am told by Realtor friends that it is MLS policing that has brought about this situation.
My wife got her license and worked for a broker for a while, but when she went inactive, her license did also. She can only be inactive for two years and then she must take the classes and test all over again.
Success,
Jim
Re: Has nothing to do with being … - Posted by Mark (SDCA)
Posted by Mark (SDCA) on October 09, 2000 at 11:08:09:
David,
Here is my perception as to why the realtor went right back to what he is doing. Sure, you may buy 6 houses in the next month or 2. The other side of that coin is 99% of the houses in the MLS will not work for you, right off the bat. That means a lot of wasted time for the realtor. That is not necessarily true for the retail buyer. It is much easier for the realtor to screen based on desired area and price range, print out a list and boom. Then it is just a matter of buyer taste. And that can be screened as well. So while it may be easier for you to close, I believe it is also more difficult to find what you are looking for, especially if your market is anything like the seller’s markets I am in…
Mark
Illinois Real Estate Licensee - Posted by Chicago Steve
Posted by Chicago Steve on October 08, 2000 at 23:11:46:
David’s hit it on the head.
Most realtors I know are pretty full of themselves and don’t make an effort to learn what a client’s NEEDS are. They just assume the need is top dollar and never ask about outside influances such as foreclosre or multiple mortgage payments. They often respond with something like thats none of thier business.
If as a realtor, literally or otherwise, you think your job is to sell property, with the growing popularity of the internet and other avenues for getting the word out by the average Joe, your days in the realestate business are numbered. We are in a service industry and the service we provide is problem solving. Yes, sometimes the problem is as simple as we need another bath or bedroom but the problem is increasingly becoming “I’ve been promoted and I have to be in Dallas in 3 weeks” I can’t handle 2 payments. Often this seller is more interested in speed than money. He might make an extra thousand or two but he’s probably suffered a great deal of anxiety not to mention extra expense in the process.
I could ramble on but I’ll get off my soap box.
In short if your not addressing the NEEDS of the client…your an order taker. When your through taking orders in your blue blazer… you can always take orders under the golden arches.
Good to talk with you this weekend David!
I don’t know about other states, but… - Posted by Ron (MD)
Posted by Ron (MD) on October 08, 2000 at 22:06:44:
I can’t speak for other states, but there is no such pressure here from the MLS service. Since MLS collects a flat quarterly fee from every active licensee, I’m not sure why they would discourage low volume agents.
There is often pressure from brokers to produce or move your license. They don’t want to clutter up their office. There are, however, smaller brokers who would be delighted to collect a percentage of even infrequent commissions. Also, some small brokers are happy to have you hang your license there just so they can say they have one more agent – it makes them sound like a bigger operation than they really are.
I am with one of the top brokers in my area. I’ve only been with them for two years, but they’ve never complained about my very limited activity. Last year I probably bought ten properties through the broker – their total commission was only a few thousand dollars from these. I also submitted a few HUD contracts for friends (or friends of friends) that probably generated another couple of thousand dollars for my broker. I even listed a few of my re-sales bringing my total commission income to almost $10k – as the broker’s share. Certainly not enough for a real agent to live on, but my broker never complained.
My broker (the third largest in the area) was recently purchased by the second largest in the area. I was expecting to be shown the door because of my low volume. I found a small broker who was happy to have me and pretty much let me pick my own commission split. When I walked into my broker to tell them I was moving, they made a very generous counter-offer to keep my measly amount of business in the office – I ended up staying.
When I first got my license, I talked with three or four office managers at big companies. I told them each exactly what I intended to do (i.e., act as an agent only for my own transactions). I was expecting a very unfriendly reception. In fact, they all enthusiastically invited me to join them.
Again, I can’t speak about other areas, but here there is no problem finding a place to hang your license. I have no interest in take the extra coursework (60 or 90 hours) to get my brokers license.
Ron
Re: If I were an agent, I wouldn’t work with me - Posted by Rob FL
Posted by Rob FL on October 08, 2000 at 21:41:29:
It’s the same way in most states. If you are an agent you have to hang your license with a broker’s office. The only way to successfully invest over the long-term and have a license is to be a broker yourself.
Re: Has nothing to do with being … - Posted by David Alexander
Posted by David Alexander on October 09, 2000 at 14:09:12:
I dont believe that 99% of the houses on the MLS won’t work. Your still dealing with people and people still have problems. I simply that most realtors arent real salesmen… ie… they arent looking to solve their clients need and get their commission but only looking to get their commission and dont really know what the client is facing, why they are selling.
I’ve had realtors let a house go to the auction when my offer would have solved the clients problem, was the clients best interest served by the client losing not only their house but their credit.
If they new what was best for their client, not just assuming all cash and could solve more problems they would make more money.
For instance I get alot of deals from other folks (refferrals) because I understand how to structure transactions where people can make money and solve problems. Well if realtors started understanding that everything doesnt fit in a square box they would close more deals and get more refferrals. You cant use a Hammer for everything. And on those deals where all you have is a hammer why not refer it to someone with the expertise and still benefit. And to further that why not try to understand when the hammer (All Cash, highest price) is the best tool for the job… not just decide it is without asking questions.
David Alexander
Re: I don’t know about other states, but… - Posted by Jim (Alaska)
Posted by Jim (Alaska) on October 09, 2000 at 13:05:01:
Thanks for the response Ron,
Here there is the flat fee + A monthly fee of $50 + liablility insurance…in my case my wife would have to foot all of it, I don’t think the broker would be very willing to foot the bill and have little or no benifit from the deal.
Jim
It’s all about finding the right broker… - Posted by Nate Tyler
Posted by Nate Tyler on October 09, 2000 at 11:41:27:
You’re exactly right, Ron.
The bigger “franchise” offices are generally going to have higher expectations of their agents.
My wife just got her license a couple months ago. She interviewed 6 brokers before she found the perfect match…a very small local office with a broker that was more than happy to hang another license and make a few extra bucks.
Keep shopping around Jim…you’ll find one.
1/2 agree… - Posted by Mark (SDCA)
Posted by Mark (SDCA) on October 09, 2000 at 19:36:51:
Ok… The 99% may have been an exaggeration… maybe its 98 or 95. But it’s a LARGE %. That is why you hear these stories about sending out 100 letters at 50% of FMV to buy 1 property. Because a lot of people cannot or will not sell at 50% FMV. And that fact is, that all cash at or above the listing price IS in the seller’s best interest.
I totally agree with you about realtors not being salesmen though. They are listing takers. And that’s it.