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Updated over 3 years ago, 04/28/2021
What am I doing wrong? All agents so far have been flaky at best.
So we have been actively looking for investment properties for 2 years now. Fortunately we were able to purchase one and are in the rehab process. But even getting the first one took finding 3 realtors. So here is the story.
About 3 years ago I was looking to purchase property in a small Idaho town that we want to retire to sometime in the future. We already have a personal residence there but we're looking for a few fixer uppers that we could buy rehab and then rent down the road. At this point in time I had NEVER watched a flipping show or heard of BP. My plan was to buy a few cheap to me properties and just pay the mortgage with my California bay area wages. So we won't even discuss my horrible use of my cash. Anyway I find a place 50k on zillow and click the contact agent button. We'll after a few text messages I finally talked to an agent. After about 15 minutes he says " hey I have to go I will call you right back." That was 3 years ago I'm still waiting. Flake #1
So my next tactic was to Google the agent listed on the property and call her direct. We met and few weeks later I told her I was willing to make an offer but needed to know if I could even get a bank loan on a property that needed some rehab. She said "no problem we will do owner financing" I said great I can give 20% down and Made offer for 45k. this property had been listed for 6 months so I thought that warranted a price reduction. So we go back and forth a few times and she told me the owners do not wish to carry and they want full price. I said ok thank you but if you have anything else come up please let me know. 2 1/2 years later I have not heard from her. Flake #2
So here is the best part about flake #2. She was the listing agent on the house we finally purchased but we used a buyers agent because honestly from my first experience and the fact she never called me made me scared to use her.
So for the house we bought I just happened to be walking by her office and asked her if she would be willing to show me a house I had found on zillow. She said yes and she did help us purchase the property. Her service however has been lackluster at best. The last time I was in town I told her I would be there for 2 weeks and wanted to see three property. And please let me know when she could fit it in her schedule. She never called me back. But I will take some blame for this since I maybe could of pressed her harder. On the other hand I am a proven buyer in a very small market.
Ok so fast forward a till the last month after I found bigger pockets and the small Multi family game. I found a triplex I was interested in called the agent went back and forth a few time. I told her I had bank financing approved but was interested in if the owners wanted to carry back the down. She told me she didn't think they would but would ask and get back to me. Guess what! That was 3 weeks ago and still have not heard from her.
So after reading about the cash flow opportunities in the Midwest I have contacted 3 listing agents all who have multiple small multi family rentals listed . With 1 response from a guy who told me he had a family function he was headed to and what would be a good time to call me the next day. I said great told him a time and still have not heard from him. The other 2 agents have not responded to my e-mail.
Sorry for the long post but am I wrong to judge these peoplez work ethic on their lack of responsiveness or should I be prodding them harder? I have no problem contacting 100 agents but want to make sure I am not judging them too harshly.
Thanks for reading my novella! Not trying to whine just be more effective.
@Chris Davidson So many agents are difficult to deal with because they are the flaky ones. I have been an agent for approx 25 years and in my experience Realtors are either 1) arrogant and don’t give a damn about you and your 1 little purchase or 2) they are ignorant flakes! I will say there are a few that are good and will be long term for you but you will have to either know them or build a business relationship with them. Good luck
PS. I invest in Texas, I have contractors, Realtors and total connections there now. If you have any questions contact me
Have a great day
Too much time writing novella. Just say what city you are buying in and people here can point you to a good agent.
@Craig Parsons a few thoughts on this. As an agent who specializes in investors.
Just right off the bat, I don't see anything you did explicitly wrong. So you may just have had some bad luck, or perhaps it's some sort of local custom you violated. Or maybe there was something unexpressed. Like something you may not have realized you said in that fifteen minutes of phone conversation that caused the agent to split. I don't know.
All that said, however, there are a few points that have been made that do carry some weight. The commission discussion certainly is one. If I'm not able to make a certain commission amount on a deal, I will charge an adjustment to my client. It can be substantial. That is to say, transactions under $100,000 almost always require an adjustment. Now, of course, an agent should discuss that with you and I presume you'd be understanding. But it's still part of an issue of the value of my time and effort.
For example, I have no shortage of clients who come with $20,000 and want me to make them a BRRRRillionaire. Essentially people who are just not serious (and they always think they are) or realistic about the market. I used to waste a lot of time on these buyers. Along a similar line, they're often asking for 90%+ LTV owner-financed deals, as if they're the only ones who'd want them. And it may be more common in your market, but a lot of owners where I am simply decline it. Other people say "well, I'd rather not go conventional, but I'm guessing you probably know of some private lenders who will do 30 year fixed for 0 down".
It's insulting to agents because they're basically asking us to "make" the deal for them. Usually because they can't do it otherwise. If it was within my power to "make" such a deal, I'd be giving it to one of my existing clients or keeping it myself. And to be clear, sometimes it is within my power to do that. But again, that's a privilege.
I don't have all the information, and I don't see what you did wrong here. But agents waste tons of time on tire-kickers who aren't serious. So we do have to be very selective about who we give our time to.
- Dan DiFilippo
@Craig Parsons
It’s all a big numbers game. You need to talk to more agents. Interview more agents. Call more agents. You will see all the patterns and the red flags of poor agents and you begin to identify the great agents. Having multiple contacts is helpful as well. Sometimes the agent you thought was a rockstar turns mediocre.
@Craig Parsons
Sorry for that experience! Honestly, the longer I work as an agent, the more I realize just how bad some of them truly are. Also there are a lot of “investors” out the that waste agents time, so they will be skeptical to work with one.
Most agents also have zero idea what makes a rental. The amount of times I see "high cash flowing property" or "cash cow" in the destruction when the rents can't even cover the PITI is stunning.
Just keep looking around or asking for referrals of people in the are. There is bound to be a good one!
@Michael Rutkowski
I agree 1000 percent. The market dynamics are being felt through the experience of obtaining an agent. Better to use BP and find investor groups to learn from through your first property. There are not many “investor friendly” agents and the good ones have plenty of business with big investors. Another option would be to find an agent who is an investor themself and partner with them on deals. Unfortunately new buyers need the most help right now but they are the lowest paying probability for agents.
@Rose Higgens is spot on with her responses and knows what she's talking about. I'm a busy agent in Myrtle Beach with plenty of investments of my own. I get 3+ emails/texts/calls a day from inexperienced investors who want a deal brought to them. That list is about 5000 people long at this point. What makes you special and why do you deserve the deal if it even becomes available? When you are an investor and first start working with an agent, you have something to prove because that agent has their phone ringing off the hook with tire kickers who claim to be investors who will never pay them anything. If the agent attempts to help all those people they will go bankrupt. I'll soon be changing my business to where I only work with investors on an upfront consulting fee basis to eliminate the tire kickers.
When you find an agent you want to work with as a beginner investor, you need to provide several things.
1. Proof of Funds or Pre-Approval
2. Your track record/investment history
3. Detailed criteria including numbers of what you're looking for
4. An example deal of what you're looking for
5. Lastly, for the first deal you should bring it to the agent, not the other way around. After you've worked with me before and proved that you can pull the trigger, I'm happy to spend more time on you and not the 3 other people that want hour-long phone conversations today that will never go anywhere.
@Jeffrey Long Wow just wow. Now I can completely understand not wanting to take on new buyers who say hey find me a house. But if you are an agent who has a house listed that is not under contract and you refuse to return the calls of interested buyers. You should not list the house. Now it looks to me as if you are the one who needs to prove something.
Every agent I have contacted except one was an inquiry about a listed house and all those listing were greater than 30 days. If I was an owner selling with one of these agents I would be extremely upset. How many of these guys tell the owner when they sign the listing agreement. Say "Oh by the way I don't return calls of prospective buyers until they prove themselves to me."
Trust me I do get the problem of the tire kickers but after all that's partly why a seller pays am agent anyhow.
Please everyone don't get me wrong I have learned tons from this thread and will approach listing agents in a different matter from now on. I just hope some listing agents can learn a thing or two as well here.
Originally posted by @Craig Parsons:
@Jeffrey Long Wow just wow. Now I can completely understand not wanting to take on new buyers who say hey find me a house. But if you are an agent who has a house listed that is not under contract and you refuse to return the calls of interested buyers. You should not list the house. Now it looks to me as if you are the one who needs to prove something.
Every agent I have contacted except one was an inquiry about a listed house and all those listing were greater than 30 days. If I was an owner selling with one of these agents I would be extremely upset. How many of these guys tell the owner when they sign the listing agreement. Say "Oh by the way I don't return calls of prospective buyers until they prove themselves to me."
Trust me I do get the problem of the tire kickers but after all that's partly why a seller pays am agent anyhow.
You still don't get the numbers involved. I had one if those low priced listings recently, 135k. Lowest house in our market. I received over a dozen calls for showing per day for 60 days. If I showed the house to every unqualified buyer, the return on my time per hour selling that house would have been about 3 bucks per hour. I'd rather go swing a hammer for 20X that. I have to weed through the buyers for both my seller and myself so we don't waste time on the tire kickers who can't bother to prove they are serious.
@Jeffrey Long.Fair enough I get that but how do you reconcile the fact that maybe one of those buyers would be be offering 20% or more over asking price. Not to mention maybe a long term customer.
I'm sure it's been discussed here before how to put a system in ace on how to handle that kind of volume of buyers but from my point of view you and your sellers are cutting out 80% of your customers.
I do not have a solution for you but it seems there could be a better one. Even if on your website you gave buyers a tutorial on how to be prepared in a crazy market. IDK
This is an interesting thread and an absolutely PERFECT example of todays market in just about everything. Gone are the days where every potential customer was important. If it isn't over the top worth it to me, I'm not doing it... it is about me, not about anyone else. Same concept of getting $60/hour labor to fix your car and charging you for it, even if not fixed, when for lack of a better term "the good old days" the mechanic would make it right before you paid a nickel. I'm going to just guess, @Craig Parsons, but I assume you were born before 1980. Before every agent reading this goes completely off the handle, I completely understand what some agents are saying on here, about how much time and energy things can draw from you. The key to any business is putting time where it makes you money and not spending time on things that don't. I'd also argue the market right now is in agent minds is like "a flip" of a house vs. a "long term hold" rental. The market is moving so fast, it is about finishing transactions as quickly as possible, it isn't so much about building customer base. So if you are trying to build some connections, the market just isn't allowing that to happen very well. I'm not an agent, so I've never been on their side of this coin, these are just my observations and I'm likely just a person with ideals built for a different generation!
As an example, a good friend of mine is a high performing agent/broker in an area near me, I won't use him as an agent anymore. He moves stuff crazy fast, but he goes so fast he makes too many mistakes for my taste. I've left enough money on the table because he just wants to do the transaction, I just won't use him anymore, but his stats in regard to transactions closed and his marketing are a machine and he does very well. Don't get me wrong, he is still well above average as an agent, but I struggle with the agent who treats my transactions as just one of a zillion, instead of making sure all I's are dotted and T's are crossed-- just my preference anyway.
The other issue playing into this is how much real estate has been glamourized. You have TV shows showing realtors in their 20s, making hundreds of thousands in commissions. The days where the hungry new agent worked like a dog to build customer base and learn the business are really gone. It is go big or go home for many. Like has been pointed out, a realtor taking $50,000 listings is like not much of a performer. I will argue that contacting the agent listing the house directly and not getting response is inexcusable, but not uncommon. Like was mentioned, low barrier to entry in this realm.
People consistently make decisions based on what the market will bear. For example, the agent that mentioned an upfront fee for working with investors.... in his market or at this time, that may be very plausible, but in other markets or in different times, maybe no so much. Just like selling right now.... you might make an extra 15% on your home now, but may not in a year or two.
Admittedly I did not read every comment of the entire post but I agree with @Rose Higgens and @Dennis Pressey Jr in the fact that this market is something most of us have never seen and many we’re not prepared for.
We are investors in Lewiston Idaho and we have been able to secure several investment deals in the last two years. We do have an agent we work with who does understand investing and looks specifically for properties that meet our criteria (even some that don’t, he pushes us to stretch our vision). In addition I pound the pavement and drive for dollars and contact owners directly. We watch auctions and foreclosure lists.
If you are local let’s meet up for coffee and help get you connected with folks who can get your investment portfolio moving. There’s plenty of work here in the Valley and we could maybe use your contracting services!!