Can I bypass the sellers realtor?

Question

In my market it seems like there are a lot of sellers that are getting bad (too optimistic) pricing advice from their realtor and their house sits on the market for months. So, there are several houses near me that have been on the market for a while. I wanted to get the BP communities thoughts on bypassing a realtor to contact the seller directly. NOT to bypass the realtor in the contract phase and NOT to cut the realtor out of their commission...ONLY to offer and negotiate directly with a seller. I definitely believe that if the house is listed with a realtor and that is why I found it then the realtor should be paid their commission.

It is unethical or illegal to do?

In old days it may have been tough to find out who the seller was or how to contact them...well actually if it was an owner occupant it may have been easier when everybody's home phone number was in the phone book! Nowadays I can look up the owner online then typically use Facebook or other site to send them a message or even get their cell number.

I see 4 primary ways to contact:

Knock on their door
Mail a letter
Phone call
Online message (Facebook, etc)

I imagine the conversation or note saying something like "Hi, I am a real estate investor looking to buy properties in your area and I noticed that your home is listed for sale. If you are interested in selling your property quickly and easily please give me a call so we can discuss how I can help you. I want to ensure you that I am a buyer, I am not a realtor or wholesaler." Obviously expanded upon and formalized for a note or informalized for in-person or phone call.

I would then hope to meet with the seller directly, agree upon a price and then I would submit my final offer to their realtor.

Thanks for your input!!

My investment areas: Broken Arrow, Tulsa, Oklahoma City, Coweta, Bixby, Claremore, Wagoner

Russell Brazil · Answer

@John Lindemann The problem on the pricing is most likely not the Realtor but the seller themselves. The Realtor is incentived to sell the house, not to get the best price. Any Realtor does not want to have the house sitting for months. If it is the seller wants too much for the property, not the agent. So bypassing the agent is not likely to yield you the results you want, and will likely have the opposite affect, the seller holding a grudge agaisnt you.

Wayne Brooks · Answer

Yes, as @Russell Brazil points out, your logic is flawed. An agent has no incentive to over price a property. They only agree to take an over priced listing hoping the owner will lower the price at some point, or use that listing to find buyers and sell them something else more realistically priced. Trust me, it's the owner who wanted the higher price.

Kurt F. · Answer

Actually, Ned, I think you stated the fact of the matter clearly, but I'm not sure anyone else had actually done so yet -- I think your third bullet point gets to the main point, and some posters may not be realizing the implications of a signed seller contract. I think you are correct about such interference -- which, would seem to describe some of the above suggestions...

Ned Carey · Answer

I think others have made it clear already, I will just restateIf you are an agent, you must go through the other agent. If you are not an agent you have no obligation legal or ethical to go thought the buyers agent.You may not interfere with the listing agents contract with the seller. Suggesting selling to you directly and cutting out the agent could get you in big trouble.

Brian Gibbons · Answer

Business Card front, stick front door and car doors in drivewaysin Listeds, Expireds, FSBOs, FRBOs,Write on the back,I have a Buyer on Lease Purchase for you! Call Brian xxx-xxx-xxxx(Send to live answering service, not voice mail. Impress the seller!0

Kurt F. · Answer

Given your guesses at what the agent will say, it sounds like you're looking to lowball on a house within a mainstream market. Do you have reasons to back up what sounds like a deeply discounted offer? If you do, great.

Brian Gibbons · Answer

@matt Matt it's all about talking to the seller and seeing what they wantThe tools I use include the following-Taking over payments subject to, exit lease to own-Lease purchase assignment, assignment fee-Lease option assignment, assignment fee-Wraparound mortgage purchase with existing financing, rent out for spread-Land contract purchase, assignment fee or rent out@Matt Motil

Devon Garbus · Answer

Have an offer written up by buyer agent. Required by law to be presented to the seller.

Matt Motil · Answer

First thought is whether or not you are a licensed real estate agent (you said you aren't). If you are, then it's not OK, but if you aren't then it's a free country and you can go talk to whomever you'd like. The seller has the option to tell you to deal with their agent, that's what they hired them for; but if the home has been sitting idle for a while, they just might be interested in hearing a new opinion on the property, or they might be super motivated to cut it loose. If I had a sign in my yard and an investor knocked on my door I would think "GTFOOH and call my agent a-hole", but as long as you are prepared for that potential response, then go for it. One thing you might want to do is to let them know that you will work with their agent, but hoped you could help them move quickly to foster a win-win scenario for their situation. You want to be careful you don't come across as a vulture. A better approach might be to send a letter of intent to the listing agent with some options that you have been able to come up with for creative solutions you have used in the past to help foster win-win sales. Let them know you would like to work together to create a quick sale on their property. You might also consider adding a sentence in the letter about paying the listing agent's commissions, so they don't just put your letter in the vertical file next to their desk that gets emptied each night.

Kurt F. · Answer

I think you'd have to research what 150k neghborhood comps are selling for. If for some reason, that number is 20% under ask, then you're all set going through an agent anyway.It's also a difference in mainstream SFH real estate versus investment property -- in the latter, a an offer of 20% under ask can sound great to a seller. In the former, 20% under ask is something that most sellers would most definitely consider a lowball.