Do I need an agent for an off-market deal that came to me direct?

Question

Hey everyone,

I was introduced to a friend of a friend who is selling a small multi-family unit. She is listing it on the MLS and therefore has an agent, but sent me the deal directly in case I want to purchase it.

I suspect this deal will go for asking price, if not more, due to demand.

I have an agent I have been working with in this market (its out of state for me). Its a non-exclusive agreement, he has just been sending me deals that come across his desk...I like the agent though and he'd be a good contact long-term. However, he didn't bring me this deal as it came organically.

Is it beneficial for me to rope in this agent? Or is that not needed? What value-add do agents provide outside of sourcing the deal?

I would love to reward this agent with a deal, but I'm just not sure if roping him into the deal for the sake of making him some money makes sense. Especially because I think this property MIGHT get bid up, and "not" having an agent on my side would save the seller money (aka she is likely to go with my offer).

Any advice or feedback you have would be great. Thanks!

Bruce Lynn · Answer

Sourcing the deal is about 10% of the value the agent provides.

#1 If your friend has an agent, that agent is representing the seller, not you.  You want someone in your corner.

#2  A great agent may save you money on the deal, repairs, financing, or a whole host of other places.   They should give you the best inspectors and attend the inspection if you can't be there.

#3  You may want them to go do a quick visual inspection of the house before you make your offer....they may be able to keep you out of trouble before you even get started.

#4 They can provide you comps for both the purchase and rents, and perhaps verify rents for you of current tenants.

#5  They may be able to provide location expertise and inside knowledge of the area for you....the good, the bad, the ugly.   They should be able to tell you target markets of renters, local market conditions of purchasers/sellers....who is paying for what closing costs, etc.

#6 Not having an agent on your side typically does not save the seller any money....just means her agent gets probably double.  They get buyer and seller commission.....and in almost every deal I see like this, you'll pay for things you wouldn't have if you would have had a great agent on your side fighting for you.

Wayne Brooks · Answer

As@Caleb Brown mentioned, the seller doesn’t save anything with you using their agent and you have no local knowledge/help.

Tom Fidrych · Answer

A good agent adds more to your purchase then sourcing the deal. They can help identify good neighborhoods from bad, identify potential problems the property may have(such as neighborhoods that may have subsidence issues), identify improving areas,  and have a list of competent contractors and inspectors.

When I was purchasing out of state properties, the agent I worked with would often talk me out of properties based upon such things as proximity to soup kitchen. He also had inspectors that were great at identifying a host of issues to chip the property price down.

Neel P. · Answer

@Caleb Brown

Ah I see, thanks for the feedback. So if I don’t have an agent, it wouldn’t benefit the seller? Only her listing agent?

If that’s the case and she wouldn’t get any benefit, I don’t particularly care to make her agent more money.

Caleb Brown · Answer

If it's listed in the MLS then they have already set aside the commission amount for the seller/buyers agent.  Doesn't cost you extra. Seller will not net anything more. Going unrepresented will only pocket the LA 6% rather than splitting it. If it was to stay off market then that's up to you. Having an agent helps you go through the process but if you are experienced you don't need one

Harry Gamble · Answer

@Neel P. Your own agent can be helpful in so many ways. I was under the impression that the LA, if he or she desired, could reduce their commission to say 3-4%, to help make the deal go through if it made sense and wouldn’t otherwise go through, since in most cases they would only get 3% anyway. But based on the responses here, and I’m not an agent, that doesn’t appear to be the case.

Matt Buroni · Answer

@Neel P. You are basically giving the agent representing the property 100% of the commission rather than just 50%, which isn't bad but means that you will not have an agent representing you which can be beneficial. Also, if you are looking to grow relationships with real estate agents and want them to keep sending you deals, bringing them in on stuff like this is a great way to do it! Speaking as a former real estate salesperson :) but no you would not be saving the seller money if they already have a listing agreement with the listing broker, which it looks like they do.

Alex Paiz · Answer

^ I agree with Bruce completely and would highly recommend having an agent represent you on this particular deal, especially, because it is listed on the MLS. Another bonus of having an agent represent you is that they will help you prepare your offer and will deal with most of the paperwork (You'll just have to review and sign).

Neel P. · Answer

Thank you for breaking this down! Very helpful to know everything that the broker can do to help. I'm relatively new so having someone in my corner to do those potentially awkward negotiations seems beneficial. I'll definitely be roping him in then.

Caleb Brown · Answer

Right, use your go to agent. LA would love you because they'd make double. In the listing agreement it has verbiage about the commission if the buyer is unrepresented.

Do I need an agent for an off-market deal that came to me direct?

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