Realtors being stand-offish. Any idea why?

Question

Hey guys, I’ve learned so much over the past couple weeks from you all. Thank you so much.

My situation, as a newbie, seems strange to me. I found a property on Zillow; 3.4 acres, 2 bed one bath, for 38k. The property is in fair condition and is certainly livable. I intended to take the plunge and pursue the property as my first rental. I called the agency and spoke to a realtor who said he wasn’t familiar with the property. He called back and said he found out it’s a repo and would gather more info for me. I never heard back. I called the agency again and spoke to another realtor. She informed me the property was a repo and the bank just wants to break even. We scheduled to look at the property. She called me back the next day and said the property had wasp in it so she can’t show it at the moment and would be in touch. I never heard back. The next day, the property was taken down from Zillow and added to Realtor (it wasn’t there before) and listed as pending. Does this sound typical? I assume with such a low cost the realtors aren’t fighting over who makes the sell as there isn’t much of a commission, but it seems highly unprofessional unless I’m missing something. Thanks.

Kristel Daugherty · Answer

@Jesse Aaron - sounds like you're good at finding properties on your own, and your needing a Realtor to just help with the paperwork / negotiation.Can I propose adding another step to your process? Contact local agents now to figure out who understands your strategy. Every agent has a slightly different skill set. With our economy being in growth for so long, not many agents know how to write and work with off-market properties (the MLS properties have been feeding them steadily for years). Get an agent that knows how to work non-traditional deals and get them on your team!I'm not in your area, but if you search the Bigger Pockets Member page, you should be able to find a few folks in your area. Start there, reach out if there's anything else you need help with, and good luck!

Jesse Aaron · Answer

@David ScoginThis is very interesting. I was actually tempted to write another post on this. Three properties that have been listed for months had status changes to pending after I inquired. This one is a SFH, the others were a triplex (175 k) and a 6 unit already filled cash flowing 2700 with an asking price of 196 k. I can’t be this unlucky.

David Scogin · Answer

@Jesse Aaron It’s simply a matter of ROI of the realtors time most likely. Just look at your own situation. Would you rather spend your time on a property that offers a 5 percent return or one that offers a 25 percent return. As a former realtor, I would be looking for the best use of my time just as we all do as investors. However, here’s a work-around that might help. Find out who the listing firm/agent is and go directly to them. They may be less likely, than other agents, to ignore you because they have a fiduciary duty to find a ready, willing and able buyer. After all, they agreed to take the listing. Also, the listing agent will receive more commission dollars if he/she brings the buyer because there isn’t another agent involved to split commission with. This might help them to be more willing to spend the time. Hope this might give you some insight into the realtors perspective.

David Scogin · Answer

@Jesse Aaron I wanted to make one further comment after re-reading your post. It’s possible that you generated some interest in the property when you inquired about it, and the person you contacted about the property might have wanted it for themselves or a friend or family member. There are a number of realtors out there hawking properties for themselves. Please understand, I’m not trying to disparage anyone. However, it is somewhat odd that it was suddenly listed on the MLS and is “pending.”

Salvatore Lentini · Answer

Foreclosure/REO properties are notoriously difficult to work with. The realtors representing them, in my experience and others I've spoken to, are not great at communication, and in general they make you feel like you are inconveniencing them. Maybe it's because the price points are so low and the properties are in such bad condition it puts them in miserable moods? Anyway, it's not just the Realtors, you have to deal with the glacial speed of banks. These types of properties take much longer to close on and are bigger headaches. And in this late stage cycle of the real estate market, the discounts can almost be nonexistent because everyone and their brother is looking to flip a property. So you're bidding against Dumb & Dumber. And the banks and the REO Realtors aren't realistic with their asking prices.... but I guess it's because they don't have to be.

Amy Fulbright · Answer

@Kristel Knittel I'm in a similar situation. Is it reasonable to ask a Realtor to be familiar with rental rates in their area? (For example, I'm in the market for houses with offer prices between $XX,000 and $YY,000 where rent is at least $XX0?) If not, then I can certainly do the math after they send me the results of my price range, but I wasn't sure if I was being unrealistic to want a realtor who would be willing to help me find that subset of houses.

Aaron K. · Answer

If it wasn't on MLS you would need to call the seller directly and make an offer. Making offers on off market properties like that is a bit different as they are more likely to be cash and have fewer if any contingencies and you aren't always allowed to see the property beforehand. If that is something you are comfortable with you need to find out how it is being sold and contact the seller or their agent. Zillow does not reflect the MLS; Realtor.com does and so does Redfin, but Redfin will make it clear if something is FSBO or on MLS.

Russell Brazil · Answer

Most agents are going to lose money servicing properties at that price point.

Jesse Aaron · Answer

@David ScoginIt does. And I appreciate the time. Turns out someone else made an offer. So I’ll continue my search.

Jesse Aaron · Answer

@Salvatore LentiniLol “dumb and dumber.” I couldn’t agree more. But being a newb I may be one or the other myself 😬