Agent and I not on the same page

[Maxwell Milholland]

Hello everyone, I'd like to tell a story about a recent experience I had with my agent and would love to hear your input on it. So recently, as of two months ago, I learned about real estate. I quickly realized that I didn't know much, so I picked up a book. Then another, and another, and twenty more. Now I have a basic grasp on the fundamentals. However, I have no practical experience, so I decided it'd be good to get in touch with a real estate agent. So I did. We spoke for a while, I told him what I was trying to do (house hack a duplex), what kind of time frame I was looking at (6-12 months), the price range (70-100k), and many other things. We seemed to have been getting along just fine, as far as I could tell. A couple weeks later, I stumble upon a duplex for 100k. Nice house, pictures looked clean, good area, boasted high rents, low expenses, everything looked great, except the price. It was too high, and the numbers didn't work. At 100k, it had a negative cash flow of 200. So I thought to myself, well I really like this house and it's not that far off, so let me run the numbers at 90k. Much better. So I email my agent and say "Hey! I found something, what do we do now?" We ended up looking at it, and it was great. I told him I wanted to put an offer in at 90k. He says "Maxwell, that's way too low. If anything, we have to offer above list price. Its a sellers market, there's going to be multiple offers, and you are financing with a FHA backed loan. We should put the offer in at 105k". My first thought was "Are you freaking kidding?!!" but of course I didn't say that. I said, "Okay, well I've ran the numbers as thoroughly as I can, and the house doesn't make sense at anything over 90k. That's all I can do". We go back and forth for a few emails, and I eventually tell him to not make an offer. I'll find something else. A week later I did. Similar situation, similar outcome. What do I do? I don't want to seem like a jerk. But, the numbers are going to drive my decision. I'm not going to buy a property that is going to lose me money. At the same time, I'm new at this. I don't want to be a pain, I don't want to drag my real estate agent around for months and making low ball offers and looking at apartments if I know that we have very different approaches to determining the amount I offer. Do I need to let up a bit, get a new agent, or is there something else I am missing? Any advice greatly appreciated!

[Haider Alazzawi]

Ok....... 

90k on 100k property is not lowballing!! are you kidding me. Unless the property is really priced below market.  If it is on the market for more than a week or 10 days then it is not that below the market. Usually below market properties get accepted offer within hours, a day, or 2 days at the most. 

I really like how you were firm with your numbers. Great work. Most newbies dont. Buy what work for you and dont be afraid to put an offer based on that.

As far as your agent. Some agents, unfortunately, care about their reputation more than the principle. or I should say too much. They dont want be known for low offers. You do not need such an agent if you want to be an investor. Find Agent investor friendly. Someone who invest himself and has few rentals. He or she will understand you better. 

Remember an agent is working for you. Do not be afraid to tell them what you want or find different one. Just keep in mind if one agent show you a property, you should stick with him for that transaction or otherwise he could sue you. 

I am newbie too and went through the same situation as you. 

Haider