Help - Is the RE agent actually hurting me?

[Daniel Vroman Rusteen]

I started interacting with a RE agent months ago when I began looking for an Airbnb investment. The agent has been communicative the whole time (something that I can say about 5% of agents in my limited experience) so I'm a fan!

But as I've read more about the process, including a BP published book by Brian Green 'Long Distance Investing', I'm wondering if not only is a RE agent not needed for me, but is likely to work against my favor.

Why? 

First, in terms of negotiating, I have experience buying a home outside the USA and I noticed the RE agent, who I assume was a negotiating expert, didn't negotiate very well. I lost that deal, and ended up buying another home directly from the listing agent. Negotiating is about what words you use, when you say it, etc. Back to today: I got off the phone with my agent, where I communicated how I wanted to present my offer (in summary: if the seller rejects my original offer, I hope they'll make a counteroffer, but if I decline that counteroffer, I will move on to make an offer on the next property of the few I am interested in the market - this is to avoid a back-and-forth and the property had been listed for a year with a 25% price cut in that time). At the end of the conversation with my RE agent, I asked them to repeat back to me how they'll present my offer, and nothing. So then I repeated and the agent still missed some points of how I wanted the offer presented.

Second, coming from the BP book, I am coming in with an offer well below asking as an investor. If I deal with the listing agent directly, they'll get 2x the commission, so even if my offer is below asking, they'll be on my side to get it accepted. Or is that not how it works in reality?

Regarding security with buying the property, I can't say I'm too worried about that. I'll still have a lawyer review everything plus the title company. Or, is this not a good idea?

I feel bad telling my RE agent that I will negotiate directly with the listing agent now after all she's communicated with the listing agent already. Is this a very bad idea? Would the listing agent not want to do business with me because I've done this? Obviously, my agent will not be happy, is there something I can do for her to make her whole?

PS The reason I went this far with my current agent is that I am investing out of state and my rationale was having an extra person out there who could possibly help me. I don't know if the agent would help me, or would be done with me after the close. I'll also have a cleaner, handyman, and anyone else I can form these relationships with while I'm out there.

Thanks in advance with any help and reading this lost post!

[Mike Dymski]

I would work with an experienced agent where good negotiating skills were table stakes and that's their value proposition (they do it all day, every day).    My agent has been doing this for 20+ years...I could not do her job as well as she does it nor could she do mine.

[Daniel Vroman Rusteen]

Quote from @Mike Dymski:

I would work with an experienced agent where good negotiating skills were table stakes and that's their value proposition (they do it all day, every day).    My agent has been doing this for 20+ years...I could not do her job as well as she does it nor could she do mine.

 My current agent is part-time...a consideration that I didn't mention in my original post.

[Lynn McGeein]

I think most real estate agents won't waste time on buyers who are "coming in with an offer well below asking" with their main justification being they want to pay less, fishing for that rare seller who will randomly accept a much lower offer before dropping list price first to generate competition. I, personally, wouldn't continue to work with a buyer who tries to dictate how I negotiate, especially one who wants me to "repeat back ... how they'll present." Our local market is still very competitive if in good condition, good location and priced right. I've helped buyers learn our market, send them closing prices on ones they've looked at or lost so they can see the difference in their offer and what it actually sold for. I send them info on homes where experience tells me they may get a low offer accepted, but usually they aren't interested in those. If you really don't value your agent's ability and think you can do it better, it's likely best that you 1) interview more to find one that you do trust, 2) go through the listing agent, directly, if you're that comfortable with handling your side on your own, or 3) maybe get your license so you can control your side of negotiations with the proper tools needed (MLS access with agent info, showings, contracts, tax records, uploaded listing docs like surveys, disclosures, broker assistance for questions, etc.).

[Paul Stagg]

If you don't trust your agent, you should find another one.

[Michael K Gallagher]

@Daniel Vroman Rusteen I think there's just a general misunderstanding of the value an agent or local expert brings to the deal that you either do not wish to see or simply don't find value in it.  Which is fine.  But unless you are a market expert and know exactly where the neighborhood cut off, and what a tenant in that area would expect etc, then you'll likely have a hard time without an agent or local rep of some kind.  

from your comments above I also think there's a basic misconception/misunderstanding of fundamentally how negotiation works in the open market, and that again is likely an area an agent can help you. But again if you don't see the value and believe the books you've read are enough then have at it.  

PS the book you read is by david greene not brian green, as a point of clarification.  

[Jay Hinrichs]

Quote from @Lynn McGeein:

I think most real estate agents won't waste time on buyers who are "coming in with an offer well below asking" with their main justification being they want to pay less, fishing for that rare seller who will randomly accept a much lower offer before dropping list price first to generate competition. I, personally, wouldn't continue to work with a buyer who tries to dictate how I negotiate, especially one who wants me to "repeat back ... how they'll present." Our local market is still very competitive if in good condition, good location and priced right. I've helped buyers learn our market, send them closing prices on ones they've looked at or lost so they can see the difference in their offer and what it actually sold for. I send them info on homes where experience tells me they may get a low offer accepted, but usually they aren't interested in those. If you really don't value your agent's ability and think you can do it better, it's likely best that you 1) interview more to find one that you do trust, 2) go through the listing agent, directly, if you're that comfortable with handling your side on your own, or 3) maybe get your license so you can control your side of negotiations with the proper tools needed (MLS access with agent info, showings, contracts, tax records, uploaded listing docs like surveys, disclosures, broker assistance for questions, etc.).

YUP nightmare client would tell them to find someone else.. not loyal thinks they know it all and what kind of real estate coach makes this kind of absolute rookie sounding post. weird.

[Daniel Vroman Rusteen]

Quote from @Michael K Gallagher:

@Daniel Vroman Rusteen I think there's just a general misunderstanding of the value an agent or local expert brings to the deal that you either do not wish to see or simply don't find value in it.  Which is fine.  But unless you are a market expert and know exactly where the neighborhood cut off, and what a tenant in that area would expect etc, then you'll likely have a hard time without an agent or local rep of some kind.  

from your comments above I also think there's a basic misconception/misunderstanding of fundamentally how negotiation works in the open market, and that again is likely an area an agent can help you. But again if you don't see the value and believe the books you've read are enough then have at it.  

PS the book you read is by david greene not brian green, as a point of clarification.  

Re knowing the market, which is one of the reasons (I've read up on that) you'd want a RE agent, esp if not from the area, which I am not, my agent is from about 2 hours away and as the listing is an existing Airbnb for 3 years, I see the prior numbers, and based on that, reviews, and market data, have made an estimate of what I believe it will make under my ownership. I'm not sure if her local expertise would add any value.

Another commenter boldly assumed that I think I know it all, which is not true. I thought that was obvious, and why I am posting to this forum with such detail. I've never purchased a home in the USA before, and I don't KNOW what I'm doing is correct, but I think it is and looking for any clarifications and insights from the good people here.

ps thanks for the clarification on author name! whoops! I'll try to edit after posting this reply if I can

[Gino Barbaro]

@Daniel Vroman Rusteen

In multifamily, it is customary to go directly to the listing agent. Most big commercial brokerages do not share commissions, so if a deal is sent to you by an agent who is not the listing agent, you may have to comp them.

That being said, your goal is to network and meet every broker in the market, so when a deal hits their desk, you are one of the first they call.

Tell your real estate agent to bring you off market deals, or any deals that they list. Other wise, they are not providing you with any value.

[Matthew Irish-Jones]

Quote from @Daniel Vroman Rusteen:

I started interacting with a RE agent months ago when I began looking for an Airbnb investment. The agent has been communicative the whole time (something that I can say about 5% of agents in my limited experience) so I'm a fan!

But as I've read more about the process, including a BP published book by Brian Green 'Long Distance Investing', I'm wondering if not only is a RE agent not needed for me, but is likely to work against my favor.

Why? 

First, in terms of negotiating, I have experience buying a home outside the USA and I noticed the RE agent, who I assume was a negotiating expert, didn't negotiate very well. I lost that deal, and ended up buying another home directly from the listing agent. Negotiating is about what words you use, when you say it, etc. Back to today: I got off the phone with my agent, where I communicated how I wanted to present my offer (in summary: if the seller rejects my original offer, I hope they'll make a counteroffer, but if I decline that counteroffer, I will move on to make an offer on the next property of the few I am interested in the market - this is to avoid a back-and-forth and the property had been listed for a year with a 25% price cut in that time). At the end of the conversation with my RE agent, I asked them to repeat back to me how they'll present my offer, and nothing. So then I repeated and the agent still missed some points of how I wanted the offer presented.

Second, coming from the BP book, I am coming in with an offer well below asking as an investor. If I deal with the listing agent directly, they'll get 2x the commission, so even if my offer is below asking, they'll be on my side to get it accepted. Or is that not how it works in reality?

Regarding security with buying the property, I can't say I'm too worried about that. I'll still have a lawyer review everything plus the title company. Or, is this not a good idea?

I feel bad telling my RE agent that I will negotiate directly with the listing agent now after all she's communicated with the listing agent already. Is this a very bad idea? Would the listing agent not want to do business with me because I've done this? Obviously, my agent will not be happy, is there something I can do for her to make her whole?

PS The reason I went this far with my current agent is that I am investing out of state and my rationale was having an extra person out there who could possibly help me. I don't know if the agent would help me, or would be done with me after the close. I'll also have a cleaner, handyman, and anyone else I can form these relationships with while I'm out there.

Thanks in advance with any help and reading this lost post!

 LOL brother.  You asked your agent to repeat back to you?  Sounds like neither you or your agent really know what they are doing. 

A good agent knows the market and provides analysis with rental comps, sales comps, projected maintenance expenses, projected CapEx... The data should be transparent so you can verify what supporting data was pulled.

If you worked with our brokerage.  I would be telling you how many registered offers there were, and what percentile your offer falls into with chances of winning.  If its a competitive situation and you wanted to submit an offer with a sub 20% chance of winning I would submit a verbal offer, I would not waste my time writing up a contract. 

A good investing agent is going to present hard data to work off of.  There are no secret negotiating tricks, low ball offers with love letters, or highly intelligent investors from afar that can win bids due to awesome use of language.  Sellers are sophisticated enough to pick the best offer, they only see the price and the terms, any other negotiating tactics are a waste of time.  

Your agent is very responsive because you may be their only client.  I whole heartedly disagree with everything you said about negotiating.  It has nothing to do with words, or when you say them. 

[Matthew Irish-Jones]

Quote from @Gino Barbaro:

@Daniel Vroman Rusteen

In multifamily, it is customary to go directly to the listing agent. Most big commercial brokerages do not share commissions, so if a deal is sent to you by an agent who is not the listing agent, you may have to comp them.

That being said, your goal is to network and meet every broker in the market, so when a deal hits their desk, you are one of the first they call.

Tell your real estate agent to bring you off market deals, or any deals that they list. Other wise, they are not providing you with any value.

Yeah but he is trying to buy an AirBnB property. That is going to be a single family or a double. Those are listed similar to residential properties through the MLS and most list agents don't want to take a call from an over sea investor who wants a below list price (no offense). This is hardly commercial investing.

[Gino Barbaro]

@Matthew Irish-Jones

He can still go directly to the listing broker. I think agents are willing to take calls from any investor in this part of the cycle. I agree that agents don't want to take a call from a tire kicker, especially outside the U.S., but if the buyer can show me they have deals, are serious, can speak the lingo, and have capital, then they will have much higher rate of success

Gino

[Daniel Vroman Rusteen]

Quote from @Matthew Irish-Jones:

Quote from @Daniel Vroman Rusteen:

I started interacting with a RE agent months ago when I began looking for an Airbnb investment. The agent has been communicative the whole time (something that I can say about 5% of agents in my limited experience) so I'm a fan!

But as I've read more about the process, including a BP published book by Brian Green 'Long Distance Investing', I'm wondering if not only is a RE agent not needed for me, but is likely to work against my favor.

Why? 

First, in terms of negotiating, I have experience buying a home outside the USA and I noticed the RE agent, who I assume was a negotiating expert, didn't negotiate very well. I lost that deal, and ended up buying another home directly from the listing agent. Negotiating is about what words you use, when you say it, etc. Back to today: I got off the phone with my agent, where I communicated how I wanted to present my offer (in summary: if the seller rejects my original offer, I hope they'll make a counteroffer, but if I decline that counteroffer, I will move on to make an offer on the next property of the few I am interested in the market - this is to avoid a back-and-forth and the property had been listed for a year with a 25% price cut in that time). At the end of the conversation with my RE agent, I asked them to repeat back to me how they'll present my offer, and nothing. So then I repeated and the agent still missed some points of how I wanted the offer presented.

Second, coming from the BP book, I am coming in with an offer well below asking as an investor. If I deal with the listing agent directly, they'll get 2x the commission, so even if my offer is below asking, they'll be on my side to get it accepted. Or is that not how it works in reality?

Regarding security with buying the property, I can't say I'm too worried about that. I'll still have a lawyer review everything plus the title company. Or, is this not a good idea?

I feel bad telling my RE agent that I will negotiate directly with the listing agent now after all she's communicated with the listing agent already. Is this a very bad idea? Would the listing agent not want to do business with me because I've done this? Obviously, my agent will not be happy, is there something I can do for her to make her whole?

PS The reason I went this far with my current agent is that I am investing out of state and my rationale was having an extra person out there who could possibly help me. I don't know if the agent would help me, or would be done with me after the close. I'll also have a cleaner, handyman, and anyone else I can form these relationships with while I'm out there.

Thanks in advance with any help and reading this lost post!

 LOL brother.  You asked your agent to repeat back to you?  Sounds like neither you or your agent really know what they are doing. 

A good agent knows the market and provides analysis with rental comps, sales comps, projected maintenance expenses, projected CapEx... The data should be transparent so you can verify what supporting data was pulled.

If you worked with our brokerage.  I would be telling you how many registered offers there were, and what percentile your offer falls into with chances of winning.  If its a competitive situation and you wanted to submit an offer with a sub 20% chance of winning I would submit a verbal offer, I would not waste my time writing up a contract. 

A good investing agent is going to present hard data to work off of.  There are no secret negotiating tricks, low ball offers with love letters, or highly intelligent investors from afar that can win bids due to awesome use of language.  Sellers are sophisticated enough to pick the best offer, they only see the price and the terms, any other negotiating tactics are a waste of time.  

Your agent is very responsive because you may be their only client.  I whole heartedly disagree with everything you said about negotiating.  It has nothing to do with words, or when you say them. 

Thanks for the insight! One point of clarification, I didn't have her repeat it back to me like a child. I wanted to ensure that she understood what I was trying to communicate. Words a crude device for what goes on in our heads, but they're all we've got!

Very interesting about the negotiating. I would venture to guess many RE agents would disagree with you on that. At least, I disagree. I assume(d) they think they are good negotiators, or is your thinking common in the industry that negotiating is null and void, what matters is only the money. In that case, you can text over or email an offer? Makes no difference.

[Matthew Irish-Jones]

Quote from @Daniel Vroman Rusteen:

Quote from @Matthew Irish-Jones:

Quote from @Daniel Vroman Rusteen:

I started interacting with a RE agent months ago when I began looking for an Airbnb investment. The agent has been communicative the whole time (something that I can say about 5% of agents in my limited experience) so I'm a fan!

But as I've read more about the process, including a BP published book by Brian Green 'Long Distance Investing', I'm wondering if not only is a RE agent not needed for me, but is likely to work against my favor.

Why? 

First, in terms of negotiating, I have experience buying a home outside the USA and I noticed the RE agent, who I assume was a negotiating expert, didn't negotiate very well. I lost that deal, and ended up buying another home directly from the listing agent. Negotiating is about what words you use, when you say it, etc. Back to today: I got off the phone with my agent, where I communicated how I wanted to present my offer (in summary: if the seller rejects my original offer, I hope they'll make a counteroffer, but if I decline that counteroffer, I will move on to make an offer on the next property of the few I am interested in the market - this is to avoid a back-and-forth and the property had been listed for a year with a 25% price cut in that time). At the end of the conversation with my RE agent, I asked them to repeat back to me how they'll present my offer, and nothing. So then I repeated and the agent still missed some points of how I wanted the offer presented.

Second, coming from the BP book, I am coming in with an offer well below asking as an investor. If I deal with the listing agent directly, they'll get 2x the commission, so even if my offer is below asking, they'll be on my side to get it accepted. Or is that not how it works in reality?

Regarding security with buying the property, I can't say I'm too worried about that. I'll still have a lawyer review everything plus the title company. Or, is this not a good idea?

I feel bad telling my RE agent that I will negotiate directly with the listing agent now after all she's communicated with the listing agent already. Is this a very bad idea? Would the listing agent not want to do business with me because I've done this? Obviously, my agent will not be happy, is there something I can do for her to make her whole?

PS The reason I went this far with my current agent is that I am investing out of state and my rationale was having an extra person out there who could possibly help me. I don't know if the agent would help me, or would be done with me after the close. I'll also have a cleaner, handyman, and anyone else I can form these relationships with while I'm out there.

Thanks in advance with any help and reading this lost post!

 LOL brother.  You asked your agent to repeat back to you?  Sounds like neither you or your agent really know what they are doing. 

A good agent knows the market and provides analysis with rental comps, sales comps, projected maintenance expenses, projected CapEx... The data should be transparent so you can verify what supporting data was pulled.

If you worked with our brokerage.  I would be telling you how many registered offers there were, and what percentile your offer falls into with chances of winning.  If its a competitive situation and you wanted to submit an offer with a sub 20% chance of winning I would submit a verbal offer, I would not waste my time writing up a contract. 

A good investing agent is going to present hard data to work off of.  There are no secret negotiating tricks, low ball offers with love letters, or highly intelligent investors from afar that can win bids due to awesome use of language.  Sellers are sophisticated enough to pick the best offer, they only see the price and the terms, any other negotiating tactics are a waste of time.  

Your agent is very responsive because you may be their only client.  I whole heartedly disagree with everything you said about negotiating.  It has nothing to do with words, or when you say them. 

Thanks for the insight! One point of clarification, I didn't have her repeat it back to me like a child. I wanted to ensure that she understood what I was trying to communicate. Words a crude device for what goes on in our heads, but they're all we've got!

Very interesting about the negotiating. I would venture to guess many RE agents would disagree with you on that. At least, I disagree. I assume(d) they think they are good negotiators, or is your thinking common in the industry that negotiating is null and void, what matters is only the money. In that case, you can text over or email an offer? Makes no difference.

 Its not just the money that matters its money and terms.  

1. Price

2. Contingencies 

3. Financing 

4. Deposit Amount

Those are the 4 items you have to play with that do the negotiating.  Besides that a good investor agent will come with some built in negotiating tactics on your behalf.

For example:  A well known and accomplished agent will be known to work with solid buyers who are capable of closing deals.  They 100% represent their clients best interest, but they will not over negotiate petty points on a home inspection.  When these agents come to the table with qualified buyers they can get the property for less than other inexperienced agents and buyers.

Negotiation is done with numbers and volume.  When I have a client from out of country who I have met for 30 seconds ask me to work for less than my going rate, I decline.  When I have a client who has given me millions of dollars of business and referrals ask for a break if I am a dual agent or if the sale price is in the millions I happily oblige. 

When I buy properties personally my negotiation tactic is to look like a sure thing to the seller and to have a reputation as a real investor who has the Capital and will close.  I also personally do not over negotiate during due diligence unless there is something unforeseen that comes up that I could not have caught on my walk through.  

Sellers and sellers agents knowing your agent is the real deal, represents real buyers, has great business systems in place and has done the analysis to justify the offer is the total package of negotiating.  

What you say, when you say it, and how you say it, is really not important.  

Please understand this is my humble opinion only! 

[Sean Hudgins]

I'm a little surprised no one else has mentioned this yet, but if your agent is in compliance with the new rules, they would have had you sign a buyer-broker agreement before showing the house, and I pray before starting negotiations for you. That could mean that if you were to bypass the agent in this case, you may still owe compensation to that agent if you close the deal. 

As for the rest of the conversation, I think you have demonstrated that you and the agent are not a good fit. If you are unhappy with the agent and do not feel like they are providing value to the process, then you should move on. If you want to do it yourself, cool, go for it, know that if you use the listing agent, the commission they are going to get is for just doing your paperwork because they are not going to be truly representing you. (side note: Dual Agency is not legal in every state. so it may not even be possible.)

Next time you do find an agent, you need one who is a local expert and FULL TIME. Being a real estate agent is not something that can be done well if you are only half-in.