Buying 1st BRRRR all cash - do I need a realtor?

Question

Hi,

I found a possible deal (currently off-market), seller has talked to an agent but I was looking to buy the property for all cash and implementing the BRRRR strategy. Should I hire an agent to represent myself or try to complete an all cash offer without any buyer or seller agents (no commissions) to make it more appealing to the seller and get better negotiation power? Thank you!

Evan Polaski · Answer

If you aren't going to use an agent, then I would at least engage a real estate attorney. Before you engage an agent, since it sounds like you have already spoken with seller, you need to make sure that it is understood that your offer stands, and you expect the seller to pay agent commissions on both sides.

In Ohio, just because the seller uses an agent, doesn't always mandate that the seller's agent is getting the full 6% commission. Seller may be bringing agent in for only 3% (or less), since it is basically hand holding on docs and closing process.

The moral, to echo others, since you are fairly new to this, I would have a "mentor". If it is an agent, an attorney, or potentially even a seasoned investor friend. Having an agent, typically, costs you nothing, as long as both parties understand the seller is taking a 6% haircut on price. But you also don't want to spring this on them, if they are assuming no commissions or low commissions will be involved.

Jeremy Horton · Answer

For the first one I'd use an agent - why? You don't know what you don't know. You also likely don't have a network...do you know an inspector? Plumbers? Electricians? Handyman? Painters? My guess is no. Use the realtors network to help you. Get them to run comps so you have an accurate ARV. Ask about which lenders they like and why.

See their process, learn and understand it.

I used a realtor on my first one and have just used title companies since. I built a network of people I consistently use for rehabs. I actually found my realtor was more of a drag - didn't have my best interests first. He actually represented another buyer on the same property! Unreal.

A realtors value for me at this point is bringing me deals. I don't need a transaction facilitator. They get paid via commission and referrals for bringing me deals. No deals then I don't have a need nor want to use you

Marc Rice · Answer

If you know what you're doing from a purchase/sale agreement and have a good attorney then yeah go for it. If you're not confident on how to get it closed or local laws/closing process then I'd hire an agent or attorney.

Justin Hammerle · Answer

@Eric Chai - hiring a buyer's agent won't impact the sellers profit, you would be paying them directly and they could help facilitate the transaction.

JD Martin · Answer

Depends on how well you think you can guide the closing process on your end. If you've never done a RE deal before, I wouldn't recommend it. The seller isn't going to care if you have an agent if your offer takes that commission into account. In any case, you can make some serious errors that can cost you a lot of time, money and aggravation if you don't do the deal right.

Mark Mazzucco · Answer

So depends on the deal, technically the seller agent will just get the entire commission, so doesn't normally make much of a difference unless seller has no agent.

Having an agent definitely gives you much more control and helps guide you in ways that you might not know during your first deal.

Buying 1st BRRRR all cash - do I need a realtor?

Buying 1st BRRRR all cash - do I need a realtor?

Most Popular Reply

6 Replies