Real estate agent and cheap homes

[Melanie Jones]

Hi bigger pockets world, this is my first post. Yay me! Lol. I've been wondering for a while now how willing real estate agents are with helping you buy a property that's 50,000 or below? I'm a registered nurse and I've been putting in work by pulling extra shifts in order to be able to buy a house using cash and utilize the BRRRR method. But since this will be my first property, I feel I need an agent there to guide me through. Would appreciate the feedback or any suggestions.

[Derrick E.]

@Melanie Jones most of the properties I buy are less than $50k. With that in mind, I do not use a realtor to represent me. Most are not willing to put in the work for such little commission. Also, I feel that the selling realtor is more willing to work with me knowing that they will get to keep the full commission for themselves. 

Main things to look for in this price range are updated electrical wiring/breaker box. Don't want the old fuse boxes or the knob/tube wiring. Obviously look at the roof and decide whether it will need to be replaced soon or not. I always try to find homes with metal roofs or at least a decent shingle roof. You also want to know if the home is/has been vacant, if so how long. If it has been vacant a while then you want to check the plumbing. If it has the iron/metal drain pipes under sink then they tend to corrode with rust and then collapse when you get water turned on, which means you now have to replace all of that with PVC. 

These are all things you can look for yourself. I also find that things move much faster this way. I hate waiting for my agent to play middle man with the selling agent. Especially in this price range, you are not a priority for either agent. 

Just make a little check list to take with you when you go look at the home. Never make an offer on the spot, always re-evaluate after looking at it. My wife will take her phone and take videos of the house. We will go back and watch those. She does that while I ask the realtor questions.

Most importantly find out when the current owners bought the house, and how much they paid. This will tell you how much wiggle room you have to make a low ball offer. All of this info is free through your court house and you can access most of this online through the county assessor's office. Sometimes Zillow will have it listed as well. This is VERY important info. If they are asking $40k for the property and paid $42k for it 2 years ago then you don't have wiggle room. Have to decide if you are willing to pay full asking price or close to it. If they are asking $40k for a house they paid $25k for back in 2004 then you have a ton of wiggle room and can throw out low ball offers. Remember, it is hard for people to get a loan this low so the sellers are almost limited to cash buyers. Don't be afraid to low ball when paying cash. In this low of price range you make your equity when you purchase. If your first offer isn't offensive then it wasn't low enough lol.

Only thing to keep in mind is the selling agent is contracted to represent the seller. No matter how nice they are to you, they DO NOT represent you. Having said that, in this price range for my area, it is a buyers market, so the selling agents are usually working with me pretty well. Knowing they get to keep the full commission truly helps with this imo.

I have bought so many over last few years that the selling agents will sometimes reach out to me to make sure I saw their new listing. 

One last thing, make sure you get a title search and always tell the agent your all cash offer is contingent upon the title search coming back clean.

Best of luck to you. Sorry for the long post, but I get excited when I hear someone has worked their butts off and saved so they can go pay cash for their first property. My wife and I did the same thing. I know the grind is hard, but I promise it gets MUCH easier after you get that first rental.