Brokering Off Market properties for Investors and Builders

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Brokering Off Market properties for Investors and Builders

Rich Hupper
Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes

Hi fellow agents and brokers.

Most of my work is finding off market properties for myself or investors. When cold calling an off market decision maker I let them know I have a buyer for their property and ask if we can set up a time to see it. 

I do not ask for a fee from the buyer or the seller in order to keep the net high for the seller and the costs low for the buyer. Trying to keep things as simple as possible. In full disclosure to both parties I let them know I am compensated at the end when the final product is realized and brought to market.

If the deal comes together I always make sure the sellers have their own attorney in the mix to hold deposits and represent them on the sale.


What I am finding is sellers are hiring their own brokers and paying them commissions for doing next to nothing. 

If the seller has attorney counsel why would they feel compelled to pay a commission to a broker for doing nothing when I have already produced a ready willing and qualified buyer that can close quickly and keep the transaction very straight forward?

I had one seller inject a seller side broker and pay them 35k commission for doing nothing except holding deposits. 

What am I missing here?

I position myself as a facilitator for both parties. My investor buyers are fine with that. Perhaps the sellers are not?

Should I be looking for a fee from the buyers when a seller injects a broker into the deal, that does nothing?

Thank you

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  • Obed Calixte
    Real Estate Agent · St Petersburg, FL · Member since 2019 · 321 posts · 182 votes
    1y

    What responses have you received from the sellers in response to them procuring a broker to represent them in the deal?

    That's the only way you'll get real answers. 

    I can list a number of assumptions but they will hold no water. 

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    • Rich Hupper
      OP
      Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes
      1y
      Quote from @Obed Calixte:

      What responses have you received from the sellers in response to them procuring a broker to represent them in the deal?

      That's the only way you'll get real answers. 

      I can list a number of assumptions but they will hold no water. 

      I have not asked the sellers for their logic behind the decision, I just go with it. Do you see this happening in your experience procuring off market deals to your investors?
      0Reply
  • Aaron Lawrence
    Real Estate Agent · Los Angeles · Member since 2024 · 17 posts · 5 votes
    1y

    Could be that the sellers are still suspicious you have some ulterior motive or bias (not saying you do). 

    Have you considered charging some small fee to both sides to further prove to the seller you're not in the business of taking advantage of them? If I were in the seller's shoes, it would be reasonable to think "no one works for free... what's this guy's angle" and then go out and hire my own agent.


    Could be % or flat. The main idea is maybe you could head these inefficiencies off and proactively build trust by putting skin in the game by formalizing your relationships and position in the deal. 

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    • Rich Hupper
      OP
      Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes
      1y
      Quote from @Aaron Lawrence:

      Could be that the sellers are still suspicious you have some ulterior motive or bias (not saying you do). 

      Have you considered charging some small fee to both sides to further prove to the seller you're not in the business of taking advantage of them? If I were in the seller's shoes, it would be reasonable to think "no one works for free... what's this guy's angle" and then go out and hire my own agent.


      Could be % or flat. The main idea is maybe you could head these inefficiencies off and proactively build trust by putting skin in the game by formalizing your relationships and position in the deal. 


       You could probably be right with this. Charge both sides a small fee and just act in the facilitator capacity I already do. 

      I do disclose to the seller I make money when the final product is done that is why I am not charging a fee to either side. However perhaps some sellers feel a bit of comfort having a broker on "their side".

      1Reply
  • Marian Huish
    Real Estate Broker · DC MD, VA & NV · Member since 2014 · 515 posts · 293 votes
    1y

    Since no Agent receives compensation prior to the deal closing, I don’t follow how what you’re doing as any different @Rich Hupper?Are you disclosing what that compensation will be at the end of the day as a percentage? Are you assigning contracts and taking your cut there? Different states have restrictions against wholesaling by brokers. Whom are you representing? Not sure what the agency laws are in MA but generally, you need to represent one party or the other or perhaps both if dual agency is allowed. Also, regarding the NAR Settlement outcome, as a broker, you are required to have a buyer agency agreement prior to showing any property in order to receive compensation at closing. Maybe I'm misunderstanding your question? It also just seems you are discrediting listing agents without knowing the full extent of what services they are providing to their clients. I also find off marker properties, find buyers and help the clients to prep the property, including clearing, cleaning, dealing with tenants, handle showings, inspections, qualify buyers and connect them with a title company who holds this deposit handles, title, work, etc.

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    • Rich Hupper
      OP
      Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes
      1y
      Quote from @Marian Huish:

      Since no Agent receives compensation prior to the deal closing, I don’t follow how what you’re doing as any different @Rich Hupper?Are you disclosing what that compensation will be at the end of the day as a percentage? Are you assigning contracts and taking your cut there? Different states have restrictions against wholesaling by brokers. Whom are you representing? Not sure what the agency laws are in MA but generally, you need to represent one party or the other or perhaps both if dual agency is allowed. Also, regarding the NAR Settlement outcome, as a broker, you are required to have a buyer agency agreement prior to showing any property in order to receive compensation at closing. Maybe I'm misunderstanding your question? It also just seems you are discrediting listing agents without knowing the full extent of what services they are providing to their clients. I also find off marker properties, find buyers and help the clients to prep the property, including clearing, cleaning, dealing with tenants, handle showings, inspections, qualify buyers and connect them with a title company who holds this deposit handles, title, work, etc.


       I disclose to both parties I work as a facilitator and present the agency disclosure. I also disclose to the sellers I make money after the buyer renovates the property because they give me the listing, so there's no need for me to charge the seller. 

      It still baffles me that some sellers want a sellers broker when I already have a buyer for their property, and they have their own attorney representation. 

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