Low Offers and Real Estate Agents Commissions

[Erica Quarles]

I would like to know how is everyone handling really low offers and real estate agents commissions. For example, a REO on the MLS is on the market for 170,000 the ARV is 200,000 and if you take 70% of 200,000 is 140,000 and the repairs will be 40,000. You might offer 100,000 for the property if you are trying to flip it. There is a seller agent and buyer agent do you ask for additional 6% to pay both agents. The bank is losing even more money. I would love to hear how people are putting in low offers and getting accepted while dealing with both buyer and seller commissions because all investors are not real estate agents.

Thanks for your feedback,

Erica

[Cara Lonsdale]

Sometimes it is not about the agent "Talking you out of making a low offer", but rather educating you on making a SMART offer that has a snowball's chance in HELL of being looked at, let alone considered.

I tell all of my investors that I will submit whatever offer they choose, however, if they expect to have any chance at winning the property, we need to come with a strategic offer, justifying our further discount of the list price. This can be accomplished by finding extremely low comps for the area and sending them with the offer. This can also be accomplished by putting together a rehab budget to submit to the lender with the offer. The more you can "chip away" from the value in the lender's eyes, coupled with the amount of COST the lender is facing to get the ARV they are seeking will be helpful in helping the Lender see how your offer makes sense.

This notion that Realtors are trying to keep investors from buying houses, or working against them in some way is just ludicris!  I love this BP community, but I get so tired of hearing all the Realtor bashing.  It always seems to come from the people first in line to seek RE advice from an agent, but then want to cut the agent out of the deal, or reduce their commission.  It's crazy.  There is a value to having an experienced Realtor on your side.  And keep in mind, THEY WORK ON COMMISSION!  Of course they want to sell you a house!  When you buy, they get paid.   A good agent will help you be STRATEGIC in order to ensure that you end up with the property.  There is a value to that.  I wish people would understand and acknowledge that.