How do you use Real Estate Agents?

Question

I have bought 3 properties “off market”. I have tried to use 2 different agents. First one had rental properties. This was when I first started buying. Weird is that all the advice I got from him seem to be completely wrong. I had no idea at the time. Anyways, after a while he just kinda fizzled out on me and I wound up buying 2 off market.

Now I have another one I went to that handles a lot of foreclosures. He showed me one that he had listed and I made a cash offer over asking price but still too low. He said wait till May/June and we should see a flood of forecloses. Never heard from him again.

I turned in a sealed bid last week on a property from a flipper that was listed on Zillow by owner.

So…. Does a buyer’s agent usually help you find property? Or should I keep looking the mls myself, and notify my agent? Should I use “my” agent when I bid off market? Is it bad to contact the sellers agent? I did that once and she was really tight lipped and not friendly. Called me right back and said there was a contract. I’m betting now she bought the property herself.

Jonathan Greene · Answer

It's hard to tell what you are bringing to the table for the agent in these scenarios. Did you pinpoint an area and a kind of investment? Did they know what you were looking for? Most agents are lazy (sad but very true), but good buyer's agents are absolutely invaluable, even when you know a lot, because they know other agents and those agents know doing a deal with a good agent and a seasoned investor is way easier than trying to do a deal with a newbie investor and new agent. You want your agent looking for you, but you have to give them exactly what you want. And to others' points, most new or mid-range investors treat agents like rotating bobbleheads and call and say I have X money, find me an investment that works. That's like someone telling a moving company they are moving and just take me to a nice town.

Ruth Ann Manison Prince · Answer

For what it's worth, very often investors unintentionally burn up a lot of a real estate agent's time by making impossibly low offers and/or expecting perfect purchase circumstances before they are willing to act, so everybody ends up being exhausticated... Look for properties on your own and bring them to your agent. Be good to work with. Be responsive. Be specific in what you want as far as location or property type or budget. Be prepared to make a strong offer and provide the funds timely. It's a team effort to meet your goals. Remember time and expertise are a Realtor's commodity, so loyalty and action are rewarded with more loyalty and more action. An agent could spend all day looking for great deals for a dozen investors who want to be spoon-fed opportunities, but they don't have their money in order or they are too unsure. Meanwhile their other clients who actually pay the bills and have urgent needs are neglected and nobody ever gets to make a move. With regard to the unfriendly agent, she was in a representation agreement with the seller. In some states it is illegal to represent a sign-call buyer. I hope that gives some perspective. Hang in there!

David M. · Answer

@Steve DockinsMany times now sellers have been choosing from the offers received in the "first round." Maybe its a disconnect.... From the seller's side, trying to engage a bidding war runs the risk of the offerors getting weary and go away. Also, the seller can sometimes appear to be greedy. Also, many times the sellers are happy with the offer and its "good enough." Meanwhile, I've had clients with a mindset similar to you: 'what do you mean they aren't asking for more offers? I would have offered more...' Don't forget that for many this is a "single transaction" for them. Its a not a "business" as many investors view their purchases. The decisiion process can be different...Good luck.

Steve Dockins · Answer

Hey, thanks everyone. I guess I’m still pretty green and wet behind the ears. Still seems odd that I call the morning after a property hits the mls wanting to make a cash offer above asking price. They make a contract that afternoon without me getting a chance to make an offer. Doesn’t make sense to me a seller would sign a contract knowing a cash buyer was coming to offer above asking price. I guess things can move that fast. Maybe too fast for me. But, you experienced professionals have probably seen it all.

Rebekah Hitt · Answer

@Steve Dockins following!

Ruth Ann Manison Prince · Answer

@Steve Dockins, Being a cash buyer in this market certainly helps. Being a cash buyer in this market who is willing to make a winning offer helps even more. Talk to a few agents and see who listens AND hears you. It's long-term business arrangement that gets easier for both client and agent over time as your relationship develops and you get to know each other's habits and preferences. Keep looking until you find someone to partner with who is in your corner. And taking a day or two to run numbers doesn't work any more. Unfortunately that may be the biggest problem.

David M. · Answer

@Steve DockinsThis goes towards what do you want out of your agent? if you want one to spoon feed you listings, I'm sure that sort exists. With the market moving so fast and information being widely available, I personally don't see the point. Also, everybody has their own "opinion." I end up "working" with a good number of investors once they find out I am one and we get to talking. So, every so often they drop me a question about a property and I go look up the details. As its been discussed on BP, if you know how to handle a real estate transaction AND have the time, then you probably don't need an agent. That seems to be the big divide I've seen on BP. The people who know what they are doing don't see the value in the agent, while the people who either don't have the time or need some help would be benefited.As for picking an agent, that goes to the general advice on forming your "team." I spent two years going to Open Houses to meet agents and find one that I could work with when I started. In your case, you might just have to just "pick one." Depending on your State's laws, the listing agent may or may not be able to work as a dual disclosed agent. I know its said a bunch of times its better to use the listing agent since they will be incentived to take your offer, blah blah blah since they are getting both sides of the deal for the commission. Yeah.. well that just blatantly says they will act in contradiction to the Realtor Code of Ethics on a number of fronts for starters.The buyer's agent is working for you whereas the listing agent work for the seller. A dual disclosed agent, in NJ anyway, now works for both so it limits the agents responsibilities (or increases depending on your point of view). Another major factor is time. When I was working full time, my agent would make calls and run around for any little errands. I do the same thing now as an agent --- to me its my job.As for your questions:--its bad form to contact a seller's agent if you are already working with an agent--if you find a property off market, get an agent involved if you need one. Since you have purchased 3 properties off market and hopefully correctly, then you may not need an agent's expertise.--I have no idea what happened with that listing agent you called. For better or worse, your "betting" only inflames the poor perception of agents or perhaps reinforces realty. However, I think its pretty well agreed that this market moves REALLY FAST. So, not necessarily she bought it herself. For one, if she was going to buy it herself she would/should have entered the listing and immediately marked it as accepted offer or something --- assuming the sellers accepted her offer and didn't want to entertain others. Remember, the sellers are the clients who are running the show, the agent is guiding. Yes, as an agent I am trained to keep in contact with potential clients. Many to most of them don't return my calls or messages. The #1 feedback from buyers and sellers is that agents don't call them back and keep in touch. I don't know... Honestly, I only know when somebody wants to work with me if they contact me and, well, works with me...Surprisingly, I've had some "clients" contact me 6mon later with a listing that they have seen. I have no idea if they have been trying out other agents in the meantime or just didn't see anything they liked (that wasn't already under contract).Hope this helps. Good luck.

Steve Dockins · Answer

Hey thanks Ruth. I know it’s a sellers market and buyers are a dime a dozen. I guess being a CASH buyer helps, just not that much. I take it your coming from an agents point of view. Right now I see new 2 properties on mls. I guess I should use a buyers agent and not use the agent that has it listed? I just pick one at random??Not sure I need spoon feed, but advice that I can count on is nice. I generally need a day or two to run some numbers and double check myself.