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My husband and I have been told more than once, in our short time as real estate investors, to NOT work with a real estate agent. How do you do that? And is that legal? How do you avoid a real estate agent without appearing shady? (Recently I approached a homeowner of a vacant home/abandoned home with an offer and she felt suspicious. I even gave her a heads up, informing her that the fronts doors were wide open just waiting for any vagrant to make it a home during the winter. She is an out of town owner and I thought she would appreciate being forewarned. I was quite cordial and put everything in writing for her. I was surprised that she felt I had an angle.) And, how do you gain access to homes that are padlocked with a code? Only real estate agents can show those homes, right?
Well any advice regarding this would be great. My husband and I look forward to making better investment decisions in 2010.
Thank you so much.
My husband and I have been told more than once, in our short time as real estate investors, to NOT work with a real estate agent. How do you do that? And is that legal? How do you avoid a real estate agent without appearing shady? (Recently I approached a homeowner of a vacant home/abandoned home with an offer and she felt suspicious. I even gave her a heads up, informing her that the fronts doors were wide open just waiting for any vagrant to make it a home during the winter. She is an out of town owner and I thought she would appreciate being forewarned. I was quite cordial and put everything in writing for her. I was surprised that she felt I had an angle.) And, how do you gain access to homes that are padlocked with a code? Only real estate agents can show those homes, right?
Well any advice regarding this would be great. My husband and I look forward to making better investment decisions in 2010.
Thank you so much.
1. It is certainly legal to buy and sell property without an agent.
2. Many investment "gurus" tell you not to work with agents. Too often that is because the "gurus" work in a shadow world where good ethics and the law are barriers to stealing properties. A good agent will run away from investors like that.
3. Many property owners are suspicious of any unsolicited interest in their property. They feel like their privacy and security have been violated. That is true whether you are working with an agent who makes the overture or you approach the property owner yourself.
Assume that by the time you have located a distressed property that the owner may have been approached by numerous scammers with sketchy low ball offers who have managed to aggravate the property owner and spur the owner's defenses.
It is a numbers game for the investor, to approach as many owners as possible and to let rejection go like water running off a duck's back.
You have to be confident and resilient to make it in real estate investment.
5. And to answer your topic question: It depends. It depends on the investor, the agent, and the deals available.
1. It is certainly legal to buy and sell property without an agent.
2. Many investment "gurus" tell you not to work with agents. Too often that is because the "gurus" work in a shadow world where good ethics and the law are barriers to stealing properties. A good agent will run away from investors like that.
3. Many property owners are suspicious of any unsolicited interest in their property. They feel like their privacy and security have been violated. That is true whether you are working with an agent who makes the overture or you approach the property owner yourself.
Assume that by the time you have located a distressed property that the owner may have been approached by numerous scammers with sketchy low ball offers who have managed to aggravate the property owner and spur the owner's defenses.
It is a numbers game for the investor, to approach as many owners as possible and to let rejection go like water running off a duck's back.
You have to be confident and resilient to make it in real estate investment.
5. And to answer your topic question: It depends. It depends on the investor, the agent, and the deals available.[/quote]
Thank you so much. Item #3 was really helpful. I was so surprised by the homeowner's response. Now I can really understand their response.
I also appreciate what you said about a "numbers game" because I bought an albeit worthless vacant lot of .05 acres for $100.00, and I found it by looking at the overdue tax list. So, I appreciate knowing that it's okay to still seek out unwanted/distressed properties and contact the owners. I believe our skin is thick enough for it.
Also, an investor needs a real estate attorney on hand, access to cash, of course, just in case a deal is found, correct?
Thank you so much.
Yes, get yourselves hooked up with a good real estate attorney.
And be careful with the cheap stuff at the tax auctions. You do NOT get a guarantee of clear title.
Good way to buy someone's IRS lien or environmental disaster on the cheap.
I'll also add that homes that have lockboxes on them do require an agent to gain access.
And a couple more things ...
A good agent who has experience working with investors and investment property is worth their weight in gold - especially to someone in your position who is just starting.
As always my #1 piece of advice to newbie investors - find a real estate investment club/group near you. Great for networking & education.
I'm pretty pro-FSBO under the right circumstances but in your case, I'd really find an agent who understands your target market for the investment property, what's a good and bad return rate/rent for the area, any neighborhood quirks or special assessment/tax issues that might blindside you (ie. home must be hooked up to county sewer at time of sale to the tune of $5K or more)
Give yourself some training wheel time as you gear up the investment, and since any house with a lockbox/MLS listing is going to have a seller paying commission in the process, you might as well have the seller effectively pay for someone to represent you on your side of the process as well.
My husband and I have been told more than once, in our short time as real estate investors, to NOT work with a real estate agent. How do you do that? ...
My husband and I look forward to making better investment decisions in 2010.
Thank you so much.
It's tough to answer a question like this without sounding like a self-serving mouthpiece for the real estate industry, but here goes.
The first, most important thing you have to do as an investor is decide who you are going to listen to. Anyone who has told you to avoid real estate agents is a moron, and you should stop listing to that person. Only about 8% of all real estate sales happen without an agent involved, and more than half of those are between family, friends or neighbors who made a transaction without marketing the property to the general public.
So your friend is advising you to limit yourself to a super small pool of candidate properties if you are going to avoid all agents. That's plain stupid. No other way to say it.
A good investor-oriented buyer's agent will help you avoid costly errors in judgment. To be fair, a bad agent will get you into deeper trouble than you might by yourself, but it's your responsibility to figure out how to pick a good agent to work with.
Attend some local investor club meetings and look for people who have accomplished what you want to accomplish, then ask if they'll help point you in the right direction. People generally want to share what they know and help others, so don't be afraid to ask. But I promise you that no seasoned, long-term investor will tell you that the secret to success is to avoid agents.
You need to first determine what "style" or real estate investing works best for you. One style is to make tons of low ball offers until a seller agrees to your offer. The other is to completely understand your market so that you know when a seller's offer price is an excellent price and you put in a realistic offer on that property. You also have to determine how knowledgeable you are at real estate investing. If you're fairly new at investing, I'd find a good real estate agent who also owns rental properties in similar areas that you're looking to invest.
Make sure that the agent you hire had done whatever type of investing you want to do. If you are looking for rentals, make sure they have rentals so they can not only show you the numbers but help you with "tenants and toilets" questions too.
I don't know what area you are in, but in my area (MI) there are so many repo deals out there right now, there are plenty of deals to go around.
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