Dealing with Real Estate Agents

The real estate agents have an important source of potential deals for the real estate investor - the Multiple Listing Service. Unfortunately, real estate agents have a monopoly on this information, so they may be an essential part of an investor’s game plan.

Dealing with real estate agents can be hard as an investor. Agents favor home buyers with cash to put down, fine credit and conservative buying power. Their interest is getting a charge with as little hassle as possible. Most agents have never done a creative real estate deal with an investor, so they are not often accessible to unusual offers. Most agents equate a “nothing down” offer with a buyer who is not grave.

Offer a Reasonable Earnest Money
You cannot there an offer with a $50 earnest money and suppose an agent to take you seriously. You can expect to pay at least $500 as grave money to get their attention. If you are presenting a firm cash offer, you should put up extra money. If you are concerned with losing your earnest money, think using a promissory note.

Offer a Short Closing Date
Another way to get an agent to take you critically is to offer a fast closing. Nothing makes an agent salivate extra than the thought of a commission check in ten days. If the agent has one more offer presented to him, he will usually advise his client to take the offer with a bigger earnest money and faster close than an offer which is senior in price.

Insist on Presenting Creative Offers in Person
If you present an original offer to an agent, it will not be represented to the owner in the same enthusiastic fashion. As affirmed above, agents do not like creative offers - they like straight offers from solid buyers. If you want the owner to hear all of the great profit of your offer, insist on presenting the present in person.

Appeal to the Agent’s Greed Factor
Let’s face it… real estate agents are in the game to construct money, just like anyone else in any other business. If you can offer the agent an inducement to make money out of the transaction, you will get his cooperation. If you present an offer which does not permit sufficient cash to come out of the deal to pay the agent, why would he assist with you? If you present a lease/option present on a listed property, how will the agent receive a commission? You need to find a way for the agent to get paid, even if you pay him out of your own pocket.

Do Your Own Comps
Sometimes you will get the conflicting of an unhelpful agent - an overzealous agent. Be suspicious of an agent who tells you what a contract you are getting on a property. If it is such an excellent deal, why didn’t he buy it? Don’t take his statement as to the value. Ask for a printout of comparable sales (not listed properties). Be aware that information contained in the MLS computer was entered by the listing broker and may be overstated. If a similar sale shows the same square recording as the house you are looking at, take a drive by and see if it is precise. Do your own appraisal of value.

Fax Preliminary Offers First
Don’t misuse your time filling out a contract offer until you have preliminary endorsement. Most agents are not this official and will take any offer in writing to the seller. Simply summarize your offer in writing and fax it to the listing agent. Once you have an oral support, and then take the time to fill out a contract and a serious money check. NEVER put up earnest money until the tender is accepted!

Don't be bullied by Uncooperative Agents
If you cannot finesse an agent, don’t be scared to stand up to him. Some agents are unprincipled and will decline to present your offer. Many times the agent will laze and tell you that your tender was rejected when, in fact, it was never presented. If this is the case, do not be scared to go over his head to the listing broker. If the listing broker is unhelpful, deal directly with the seller.