Time to find a new broker?

Question

Through my current broker I just purchased my first SFH for a long-term rental. She and her partner showed me about 10 homes. In the end, I was the one who found the house I wanted on Zillow and ask them to show it to me.

I ended up buying that house that I found on my own.

I'm ready to buy another and I'm literally getting no leads from either broker. I'm getting the MLS emails they have me set up on, but it seems like no work is being done for me. I don't hear from them that they're actively searching for my next investment. I actually found a great deal on Facebook and took them to it. They were surprised at how I found the deal.

I guess my question is, what should I expect them to to for me? Am I expecting too much from them to be actively searching for me and sending me deals? I feel like they're getting paid to just fill out the contracts.

Eric James · Answer

I'd say don't use an agent. Call the listing agents directly. If they don't have to pay a buyer's agent commission the purchase price might also be a little more negotiable.

Julie N. · Answer

@Clint G. Most buyers “find” their own houses now a days with so much of it being internet based. If it’s listed then part of the deal is the agents earn commission. If You find a deal that’s not listed and are represented by an agent, then you might owe them a commission even though it’s not on the MLS and you found it.  Always check your buyer rep agreement so you know what you are responsible for, regardless of how much you think the agent has worked, or hasn’t worked for you.

Steve Hall · Answer

@Clint G.

• They are not brokers, they are real estate agents who work for a broker.
• You wasted their time looking at 10 homes, and then bought one you found elsewhere. Can you blame them for not bringing you any more listings?
• In most states, the buyer does not pay the agents, the seller does. If you are buying listed properties, then why not use an agent?  It's free, and dealing directly with the listing agent is usually a hassle anyway.
• Real estate agents work in the residential sector. You are buying SFH (which is residential stuff.) Once you start buying commercial, then you can use a CRE agent or broker and they will bring you stuff faster than you can keep up with it.
• If you are buying off MLS, then DO NOT use an agent.

Joel Owens · Answer

What price range are you buying in?

If you are looking for 125k junkers and the regular home buyer price is 299k than it's understandable why they might not be interested. If an agent they have a split with their brokerage. So 125k x.03 = 3,750   After costs they may not get anywhere close to that.

It's like me with commercial. The lower the price goes the harder it is to find anything at all in that range. Example 1,000,000 commercial property is like a 50k house. I usually have a 2 million dollar minimum to take on a client. Maybe if the buyer looks for 1 year they find something but I can't go on a wild goose chase and run a business on a low return, low probability transaction.

Now if someone is looking for tough property to find but 6,8 10 million in price then I will put some time in to try and find it between my other deals. I am an investor myself and principal broker. Those in the brokerage business and established want to make the highest return for their time just like any other investor. It's typically the new agents that have nothing going on that will go to the ends of the earth, finding the needle in the haystack property, to make peanuts.

For finding deals on your own likely have to spend money to find unlisted stuff with marketing. If you can get in with a volume residential lister then they might have access to what you are looking for. Do not expect them to show you umpteen houses though. They likely will want to see proof of funds before they send you properties and let you be in their inner marketing circles for the good properties.

Good Luck. Trying to give one brokers perspective 15 years in on the commercial side.

Clint G. · Answer

@Eric James

Great point!

Clint G. · Answer

@Julie N.

Agreed.

The particular house I bought was listed. The other that I found on FB was not but I brought them in on it to earn potential commissions. I'd make sure they got paid if I had them in on it as well.

James Wise · Answer

They've set you up on an MLS feed with your criteria. If you are finding deals outside of your feed you either need to adjust the feed's criteria or you are finding properties that aren't listed by an agent. They aren't gonna be looking at unlisted properties for you. That would make no sense. When an agent finds an unlisted property their job is to list it. This is how "off market" properties get "on the market."

Clint G. · Answer

@Joel Owens

That's for that side Joel. I think you have a very valid point. I know I'm not a big player so I shouldn't expect all the time and attention. I think this is part of the learning process for me.

As for the homes I'm looking for, they are all pretty much turnkey or close to it. I don't have time for rehabs. My price range is middle of the road for my area...nice starter homes but not high end customs (most around 160k range...3/2's). They know I have the money for another so I figured I'd be getting properties pushed at me.

In all honesty, like you mentioned, they have a lot of clients/investors pulling them a different direction as well. This leaves me with much more time on my hands to search for the next property that's right for me.

One of the agents has been a good mentor for me as well so I take that into consideration too.

Clint G. · Answer

@Steve Hall

To clarify, yes, I found the home but they showed it and made commission on it. For showing 10 homes (maybe less) they did well with that commission, even if I didn't pay it.

As for your suggestion to not use an agent when buying from MLS, where else are you finding deals not listed on MLS? Why wouldnt I use an agent in that case if I'm not paying them?

Tom Aiello · Answer

Find a different broker, for sure.

It sounds like they are just not going to work for you as an investor.

Time to find a new broker?

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