Are Real Estate Agents Clueless on how to work with Investors?

Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes

On numerous occasions, clueless real estate agents want to put me on automation where they send me searches from the MLS. They seem to be focused on morphing this into a buyer/broker arrangement.

I continue to scratch my head wondering why they haven't figured out that I just might be more interested in off-market properties and that a buyer/broker agreement is unattractive because we need a ton of flexibility in how we purchase properties and don't want to be handcuffed.

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Russell BrazilBusiness Member

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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

Are you offering them upfront fees?

I'm guessing not. So if you aren't willing to pay them upfront, and you arnt willing to enter a buyer/broker agreement to make sure they get paid when they close.....then why would they want to work with you?

It's a business. They got to get paid. If you arnt paying, then they arnt working for you.

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
2y
Are you offering them upfront fees?
I'm guessing not. So if you aren't willing to pay them upfront, and you arnt willing to enter a buyer/broker agreement to make sure they get paid when they close.....then why would they want to work with you?
It's a business. They got to get paid. If you arnt paying, then they arnt working for you.
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James McGovern
OP
Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes
2y
Quote from @Russell Brazil:

and you arnt willing to enter a buyer/broker agreement to make sure they get paid when they close
Always willling to pay for value created. Sadly, many want the agreement in place BEFORE they have shown a property or did anything other than attempting to add me to an automated search.
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
2y
Quote from @Russell Brazil:

Are you offering them upfront fees?
I'm guessing not. So if you aren't willing to pay them upfront, and you arnt willing to enter a buyer/broker agreement to make sure they get paid when they close.....then why would they want to work with you?
It's a business. They got to get paid. If you arnt paying, then they arnt working for you.

YUP the OP is the nightmare client.. he needs to just find his own deals.. agents that work off market do it for a very select group of buyers ( of which I am one in a few markets) we have to earn our way in not dictate our way in.. Buyers for off market are dime a dozen.. Agents that actually get off market and great deals are NOT they are to be coveted if you can get one to work with you.
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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
2y
Quote from @James McGovern:

Quote from @Russell Brazil:

and you arnt willing to enter a buyer/broker agreement to make sure they get paid when they close
Always willling to pay for value created. Sadly, many want the agreement in place BEFORE they have shown a property or did anything other than attempting to add me to an automated search.

It's literally the law nation wide now. If an agent performs work for a consumer before having an agreement in place, then they are in violation of the Sitzer/NAR settlement. They can be fined, or found in contempt of court for doing work without a written agreement in place.
The days of showing a property or doing work for a consumer with no written agreement are completely done. Youll need to adjust to the new reality. Have issues with it? Take it up with the Department of Justice and the Federal District Court of Western Missouri.
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
2y
@James McGovern Yeah, I agree with @Jay Hinrichs. Why don't you just find your own deals? Anyway, most Realtors will not have any 'secret' properties that you can't just find yourself in my experience. And the elite Realtors that might have some angles to help you will want some type of agreement in place so that they get their reward guaranteed....
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James McGovern
OP
Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes
2y

The days of showing a property or doing work for a consumer with no written agreement are completely done. Youll need to adjust to the new reality. Have issues with it? Take it up with the Department of Justice and the Federal District Court of Western Missouri.
I gotta ask, that was a court settlement, not a law. This distinction is important
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James McGovern
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Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes
2y
Quote from @Bruce Woodruff:

@James McGovern Yeah, I agree with @Jay Hinrichs. Why don't you just find your own deals? Anyway, most Realtors will not have any 'secret' properties that you can't just find yourself ..
Realtors may know who is in distress that could turn into a deal which is information worth paying for.
0 Reply
James McGovern
OP
Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes
2y
Quote from @Russell Brazil:

Are you offering them upfront fees?

Uncertain of what you are thinking about when it comes to upfront fees? I am more than willing to pay for results. If they brought me a property at a kick *** price, sure I would compensate them.
Don't want to sign any agreement where they could demand compensation on a property that they did not help me acquire.
1 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
2y
Quote from @James McGovern:

Well that's an easy agreement to set up....
2 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
2y
Quote from @James McGovern:

Quote from @Bruce Woodruff:

@James McGovern Yeah, I agree with @Jay Hinrichs. Why don't you just find your own deals? Anyway, most Realtors will not have any 'secret' properties that you can't just find yourself ..
Realtors may know who is in distress that could turn into a deal which is information worth paying for.

That would be rare IMO. You'd do better just driving a neighborhood (a lot) to get the feel. Find deserted, run down looking houses and contact the owners, etc....
2 Reply
Bruce Lynn
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
2y
I agree a random/generic MLS search doesn't help most investors. Really needs to be curated to be helpful.
It probably doesn’t surprise you that twice as many flips are bought on market as off market. But those are clearly bad deals... right? As it turns out, the profits are nearly identical.
Off market is just a marketing term, most of the wholesale properties are very much ON Market, just not on the MLS perhaps, unless they were bought off MLS. That happens in my market all the time. Investor sends me "wholesale" property, when they ignored the same address I sent to them direct without all the mark ups a week before and a "wholesaler" remarketed to them as a "wholesale" deal. 1/2 the time not even under contract, so the chances of that deal blowing up are good.
After today, your agents will be required to have some kind of agreement with you before they show you homes. For many investors I just limit the agreement to homes I show or alert them to. Just ties us together for those homes, and you are a free agent to buy other homes on your own if you want to do that.
You just need to find the right agent who is a valuable member of your investment team. No need to go at it alone. Find one that adds value.

8 Reply
James McGovern
OP
Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes
2y

That would be rare IMO. You'd do better just driving a neighborhood (a lot) to get the feel. Find deserted, run down looking houses and contact the owners, etc....
You are now describing a scenario of why no one needs agents any longer where Bird Dogs and Wholesalers are of more value.
0 Reply
Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
2y
Quote from @James McGovern:

The days of showing a property or doing work for a consumer with no written agreement are completely done. Youll need to adjust to the new reality. Have issues with it? Take it up with the Department of Justice and the Federal District Court of Western Missouri.
I gotta ask, that was a court settlement, not a law. This distinction is important

A court settlement enforced by the Federal Courts and Department of Justice. The DOJ has already notified brokerages they will be auditing their records for compliance with the settlement. It's not a choice. Like any other court approved settlement, it has the full force of law.
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4 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
2y
@Russell Brazil @Bruce Lynn and the education process begins !!!
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4 Reply
James McGovern
OP
Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes
2y
Quote from @Bruce Lynn:

I agree a random/generic MLS search doesn't help most investors. Really needs to be curated to be helpful.
You just need to find the right agent who is a valuable member of your investment team. No need to go at it alone. Find one that adds value.

Your first statement is spot on and a better way to articulate why I find agents painful.

Your second sentence is also good but more difficult to be successful at. Finding the right agent is very painful. In my market, many investors aren't using agents except for commercial deals and often result to selling via flat fee broker MLS listings.
0 Reply
James McGovern
OP
Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes
2y
Quote from @Jay Hinrichs:

@Russell Brazil @Bruce Lynn and the education process begins !!!

It is my understanding that that particular constraint is placed on agents who are members of NAR. In my state, you can be a real estate agent and not have to pay fees to a membership organization and still proide value.
0 Reply
Bruce Lynn
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
2y
@James McGovern I see you are a home inspector. If I contract a home and use you as my inspector, since I have never used you before and don't have a way to judge your work, would you be willing to do the inspection without any signatures or agreements and let me see if I appreciate the quality of your work enough to pay you? Are you willing to risk not getting paid?
Maybe this settlement agreement is a good thing for buyers agents. Forcing them to explain how compensation works and getting that in writing up front before they do much work.
11 Reply
Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
2y
Quote from @James McGovern:

Quote from @Jay Hinrichs:

@Russell Brazil @Bruce Lynn and the education process begins !!!

It is my understanding that that particular constraint is placed on agents who are members of NAR. In my state, you can be a real estate agent and not have to pay fees to a membership organization and still proide value.

It is also placed on MLS subscribers. So they need to not be a Realtor and also not be an MLS subscriber.
Are there agents who are not part of both? Yes. But that's a tiny tiny fraction of overlap.
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2 Reply
James McGovern
OP
Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes
2y
Quote from @Bruce Lynn:

@James McGovern I see you are a home inspector. If I contract a home and use you as my inspector, since I have never used you before and don't have a way to judge your work, would you be willing to do the inspection without any signatures or agreements and let me see if I appreciate the quality of your work enough to pay you? Are you willing to risk not getting paid?

Honestly, much of the value in home inspection comes from the document created which many buyers receive a copy but are otherwise clueless as to the items often missed in an inspection. There is no one keeping that profession to a higher level of integrity.
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
2y
Quote from @Russell Brazil:

Quote from @James McGovern:

Quote from @Jay Hinrichs:

@Russell Brazil @Bruce Lynn and the education process begins !!!

It is my understanding that that particular constraint is placed on agents who are members of NAR. In my state, you can be a real estate agent and not have to pay fees to a membership organization and still proide value.

It is also placed on MLS subscribers. So they need to not be a Realtor and also not be an MLS subscriber.
Are there agents who are not part of both? Yes. But that's a tiny tiny fraction of overlap.

I am one of the few Brokers who is not or never been a member ( in CA at least) of nar and MLS. Although when I was a broker in Oregon and Mississippi I was a member of both as I wanted MLS access and in the day you had to have nar to get MLS.. CA you dont need Nar and never have had to to get MLS.. But my CA Brokers license is for lending money not selling RE.
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0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
2y
Quote from @James McGovern:

Quote from @Bruce Lynn:

@James McGovern I see you are a home inspector. If I contract a home and use you as my inspector, since I have never used you before and don't have a way to judge your work, would you be willing to do the inspection without any signatures or agreements and let me see if I appreciate the quality of your work enough to pay you? Are you willing to risk not getting paid?

Honestly, much of the value in home inspection comes from the document created which many buyers receive a copy but are otherwise clueless as to the items often missed in an inspection. There is no one keeping that profession to a higher level of integrity.

for sure half the home inspectors are bozo's who have no clue what they are doing. bane of the industry in my mind.. I get them coming through my new builds and its insane the stuff they call out as not to code and they are dead wrong.. And we simply push back and tell the buyer dont care what your inspector said they are wrong.
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2 Reply
Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
2y
Quote from @Jay Hinrichs:

Quote from @Russell Brazil:

Quote from @James McGovern:

Quote from @Jay Hinrichs:

@Russell Brazil @Bruce Lynn and the education process begins !!!

It is my understanding that that particular constraint is placed on agents who are members of NAR. In my state, you can be a real estate agent and not have to pay fees to a membership organization and still proide value.

It is also placed on MLS subscribers. So they need to not be a Realtor and also not be an MLS subscriber.
Are there agents who are not part of both? Yes. But that's a tiny tiny fraction of overlap.

I am one of the few Brokers who is not or never been a member ( in CA at least) of nar and MLS. Although when I was a broker in Oregon and Mississippi I was a member of both as I wanted MLS access and in the day you had to have nar to get MLS.. CA you dont need Nar and never have had to to get MLS.. But my CA Brokers license is for lending money not selling RE.

There's a number of states I do not belong to their MLS systems, but my NAR membership still binds me to the settlement in those states anyways. And vice versa. I have many friends in Boston who are not NAR members, but they're still bound to the settlement because they are MLS subscribers.
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0 Reply
James McGovern
OP
Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes
2y
Home inspectors get a lot of their business via agent referrals. Many of these agents wouldn't want an inspector ruining the deal. Home buyers see the inspection often as a checklist on a long list of items that satisfies some cheesedick lenders criteria and nothing more.

Home inspectors may have knowledge gaps that are not acknowledged when hiring. Some are better at new builds while others are better at older legacy homes. In the scenario of a new build, the agent will often take whatever the inspector says and be bulldog with it. The process enables those bozos to remain unscathed.
1 Reply
Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
2y
When I was a SFR investor, my agent was the linchpin of my investing. We would walk properties and make offers on the spot.
4 Reply
Account Closed
Property Manager · Northeast Indiana · Member since 2013 · 46 posts · 38 votes
2y
Yes
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