Having trouble choosing a Realtor

[Nick R.]

I'm flipping my first house which will be ready to put on the market a week from now. Here's my dilemma; picking a Realtor! This house is located in a diverse area with about a 50/50 mix of Hispanic and Caucasian families.

Option One: A Realtor who works with investors and was referred to me by the wholesale brokerage that I bought the house from. She will charge me 1% for basically just listing the house on the MLS and handling negotiations OR she will charge me 2% and do an "email blast" to other realtors on a weekly basis and pay for a professional photographer to take pics of the house.

Option Two: A Realtor who sold my own personal townhouse and was very professional ad did a great job but will charge me about 2.4% commission.

Option Three: A Realtor who sold a nearby house to the one I'm flipping for slightly over the asking price, is bilingual and specializes in selling to Hispanic families. I've not discussed commission with him but would be willing to use him for 2%.

I figure that for each percentage increase in commission, it will cost me approx $1700-1800.

[Account Closed]

Paying a realtor 2% they are not much of a realtor. Let's flip this penny over are you willing to let someone tell you how much to sell your property for?

Joe Gore

[Huy N.]

I would go with the 1% option 1. Dallas and Houston market is very strong right now so if you fix it up nice, price it right and list on the MLS, you will get multiple offers.

[Chris Sweeney]

I think you can get full service and net more with the biggest hitter for your property. See if they will cut you a deal as you are an investor and will bring them more listings. Also, hitters will have off market deals you can pounce on. I think you could easily net less saving $1700 or $3400 going low budget than full service not considering future business with a hitter.

[Ben Hughes]

Don't they usually charge 5-6%?

[Mark Ferguson]

Are you just talking about the listing side commission? As @Ben Hughes said total commission would include the listing agent and buyers agent. My theory is to pick the best agent in the area even if they charge more. They more than make up for the extra money in expertise and marketing. Underprice or overpricing a property will cost you much more than that 1% savings.

[Martin Zawarski]

I don't know if I would use any of the three. I understand this is your first flip. I would try to use this situation into a long term relationship that is beneficial to you on not just this one deal. You need someone in your corner to help you with your next and your next and your next deal in both BUYING and SELLING. Find someone hungry who wants to form that kind of relationship. Post something on CRAIGSLIST that you are seeking a realtor to represent you in multiple deals and that you are an active investor. Get some resumes and then interview them and see how you click. forget the 1% OR 2% OR 3%. How can you parlay this opportunity to help you out in the long run??? They will make you more than the 1% savings many times over.

[Mark Updegraff]

Option 3.
Sell that house & move on! You know the neighborhood & he'll get you the buyer.

[Account Closed]

option 4, burn the place to the ground, collect the insurance money....don't forget the Picasso you had the was in the house

[Patrick T.]

@Nick R. as a recovering realtor I have to say that @Mark Updegraff is right to a point.

But @Martin Zawarski has a long term vision in mind that will pay off in multiples. It is so easy and typical to get caught up in the "emergency" of the moment. Kick back and take a breath, you are in control. How are you going to build your future in this business...certainly not on one transaction. Cultivate relationships. Create future partners and referrals. Be a Pro, and be good to the other Pros.

[Jamal White]

Do you have a buyers list? If you do I would contact your cash buyers before you deal with a realtor.

[Account Closed]

"Option Two: A Realtor who sold my own personal townhouse and was very professional ad did a great job but will charge me about 2.4% commission."

I assume that this is the listing side only. Cheapest is not always cheapest. A good agent will usually bring a higher selling price as much or more than their commission. I believe relationships are very important in business. If the agent did a good job for you before, why wouldn't you use them again? I would ask the agent if there is anyone in their office who speaks Spanish that they could co/list it with.

As an agent, the email blasts often gets annoying. Most agents block them. If you do choose a new agent: Ask how many listings they have sold in the area in the past year? Ask for previous MLS listings and references. Look at the "professional photography". What were the days on market? If high, why? List to sale price? It's not always the agents fault, sometimes you have unrealistic sellers. If you are unhappy, can you cancel the contract without paying them a commission? Length of contract?

A couple of things to look out for that I have run into by a few less than honest agents: "The interested buyer". I have a buyer who would be interested in buying your home. I just need you to sign the listing agreement before I can show it to him. After signing the contract, he brings the buyer over, who decides the home isn't right for him. The "buyer" was a friend or coworker used to get you to sign a listing contract that you can't get out of. "Buying a listing". An agent brings you an inflated CMA with bogus information. The seller picks him/her just because they brought the highest number, and signs a long-term contract. The agent knows that the property will never sell at that price, and soon starts to advise the seller to lower the price. The property sits on the market and becomes "market worn", until the seller lowers the price to were it sells, usually less than if it were priced correctly to begin with.

Good luck.

[Eric Blanchard]

Got to go with @Martin Zawarski on this one. A good realtor is worth finding and keeping. I kissed a toad or two, but I'm happy with my current realtor (BP member Stewart Fox).

[Dev Horn]

Price not important? What if you can get the best people working for you at the best price? (2% is easy) That's certainly what I would want before I would concede on price in order to get quality (the best agent). This is the listing side - unless it's a high-end property that will be aggressively marketed, let's face it, it's about getting it on the MLS. One of the largest investors I know just pays a broker a flat rate to post his properties to MLS. The bilingual stuff, all that is more important on the BUYING side.

Your best opportunity to save money with RE agents/brokers is on negotiating the rate/fee on the listing side. Once it's on MLS in Dallas, it'll show & sell if it's nice and priced right.

[Nick R.]

Thanks all for the replies, they've been VERY helpful and informative! (I should have clarified that this is for the listing commission only) After taking everything into account, I've decided to go with option #1 and use the Realtor who was recommended by the wholesale brokerage and who charges 1% commission. If this Realtor does a good job, then hopefully this is the first of many deals I'll use her. Also, as some have pointed out, the DFW area is pretty hot and this house is completely updated and will be aggressively priced so it should *hopefully* not need much marketing behind it other than the typical MLS listing (I will also be paying to have it professionally photographed).

[Dev Horn]

Good decision. Now, just make sure there are plenty of high quality photos - once on the MLS, that stuff shows up in Trulia, Realtor.com, etc. Lots of great photos on massively popular websites sell listed properties WAY more than listing agents. ;-)

[Account Closed]

@Nick R.,

Can you provide the agents name that is chargibng 1%?

Joe Gore

[Nick R.]

@Joe Gore,

I can email you some info if you'd like, just provide me with your email address!