A quick question I need advise for. What is the average/normal financial incentive given to realtors that provide you leads of distressed sellers that are willing to sell RE at a discount? The realtor of course will get paid 3% commission by the seller, but for us RE investors (buyers), can we just make the realtor our realtor as well, and thus pay the other 3% commission? So basically the realtor would be enabled to "double-dip" the commission. Or, is there other typical arrangement when you work with realtors under this mode. Looking to assure deal flow from realtors but for discounted/distressed properties.
Real Estate Agent · Surf City, NC · Member since 2017 · 648 posts · 597 votes
2y
Hey Luis, This is a great topic. There is a big difference between providing you leads or representing you throughout the purchase of the property. If all you are looking for is motivated seller leads, I would recommend not using an agent and building another pipeline via direct mail, cold calling, ect. If you are looking for someone to ehlp represent you through the process, I think there are a lot of ways to handle that. If it is an off market deal and the realtor does not have any contract with the seller, the seller might not be willing to pay any commission to the realtor. In that case, if the realtor brings you the deal and wants to represent you, they should ask you to pay their commission. Oftentimes, distressed properties are going to be a lot of work for an agent if there are lots of inspections and quotes to coordinate so it is smart to talk about this with your agent prior to finding deals. Different agents will work for different fees and I am sure if you offer to pay them more per deal, they will work harder for you.
Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
2y
You could do that, but some Realtors don't like dual representation, it can put them in a bad spot, so in those instances, you might have you own agent.
Also- you are talking about those agents who are already representing the seller, but there are agents out there who dig up deals for investors all of the time. I'd be sure to network and bring some value to them as well.
Hey Luis, This is a great topic. There is a big difference between providing you leads or representing you throughout the purchase of the property. If all you are looking for is motivated seller leads, I would recommend not using an agent and building another pipeline via direct mail, cold calling, ect. If you are looking for someone to ehlp represent you through the process, I think there are a lot of ways to handle that. If it is an off market deal and the realtor does not have any contract with the seller, the seller might not be willing to pay any commission to the realtor. In that case, if the realtor brings you the deal and wants to represent you, they should ask you to pay their commission. Oftentimes, distressed properties are going to be a lot of work for an agent if there are lots of inspections and quotes to coordinate so it is smart to talk about this with your agent prior to finding deals. Different agents will work for different fees and I am sure if you offer to pay them more per deal, they will work harder for you.
Sean, thank you immensely for your thorough response. I apologize profusely for my late response. I have been sick so did not have a chance to respond.