When to find a new Realtor?

Question

I can give the full story here, but in effort to keep it somewhat short my questions are as follow.  I have a 30-unit property listed with a Realtor and I’m curious how often one should expect interaction with the realtor.  I have been told 3 times now that he has a showing coming up, but nothing ever materializes.  It has now been about 33 days since I have heard from him.  Is this normal, or should I be getting regular communications?  Also, if there is no interest in the property, how long should I leave it on the market?  I question how dedicated the guy is to selling the property since when he was selling two other properties for me to 1031 into this 30-unit he was communicating weekly if not multiple times per week (a good amount of commission was involved).

David Monroe · Answer

@Ron Fiscus Fire him! The listing agreement should have a clause allowing you to let him go with notice.

You should be getting communication from him at least once a week, or whatever he promised in the listing presentation, good bad or indifferent. If he's not communicating, he's not working on the property.

Start interviewing new brokers right away. Disclose to them that you're firing the current broker and will be released from the listing agreement in ?? days. Do not sign a new listing agreement until the one you're under is void.

Good luck and let me know if you need help in the process with letting him go or finding a new broker, I know allot of great brokers in the multifamily space.

Christopher Lombardi · Answer

Check out www.mytrustedagents.com.  The website does all the vetting for you and matches you up with a good realtor in your area.

Michael Ablan · Answer

@Ron Fiscus  I think a lot of it depends on the expectations set at the beginning on the partnership.  When I take on a new client, I let them know that I'm always available for questions and to chat.  However, I'm not going to call them unless I have a legitimate update or suggestion.  I don't make phone calls to let people know that there's nothing to report. I make sure they know this before we enter into business together.

As for your property.  Showing 30 units is no easy task.  What kind of due diligence is your realtor doing on prospective buyers before he will show it to them?  I'm working a deal right now where the seller refused to even let me see the units until I showed proof of financing, down payment and made an agreeable offer.   He's terms were very hard to deal with, and would turn away most buyers.  But on the flip side, he's eliminating 99% of the tire kickers.

Have a sit down with your realtor and express your feelings and concerns.  Lay it out on the table and tell them what you want.  If they can't work with that, then find someone who can.

Hope this helps.  Good luck!

Joel Owens · Answer

Hi Ron,

Biggest thing is if you rents are at,above, or below current market?

Any deferred capex?

Hopefully in 2016 you did not overpay for the 30 unit. What is your goal after selling the 30 unit to 1031 exchange into something else?

Do you pay any landlord utilities for the units? How old are the buildings?

What is current list price and stated cap rate?  Quick and fast eval is I usually take if no landlord paid utility 50% off the top of gross expected income. If landlord pays utility then I take 60% off costs to arrive at NOI. Offering memorandums that have unrealistic stuff like 4 to 5% annual rent growth and costs of 35% I laugh at. Historical over decades of time multifamily is about 1.5 to 2% rent growth. 35% opex I have only seen on buildings that are brand new or buildings that were gutted and a stud up renovation. If a seller has numbers saying 35% opex in other situations then usually they have not kept up the property and has lot's of deferred capex.

Example a brand new building the costs the first 5 to 7 years should be minimal. The cost from year 6 on tends to be more as machines and equipment some start winding down their useful life expectancy. The buyer has to plan for what costs they are likely to incur during their ownership and not the previous owners when everything was brand new.

Definitely you should be getting more contact than once a month. I am generally in contact with my clients on commercial retail at least every other day or so. Sounds like the listing company might have given up on the property selling it. Your price might not be realistic which is why it could be sitting on the market.

Ron Fiscus · Answer

It makes sense to me.  I will start looking for another agent, I appreciate all the input.  I sure wish I knew about BP before I made this purchase back in 2016.  Thanks and I wish all a healthy, happy, and prosperous 2019.

Brian Ploszay · Answer

If the property is priced within reason, the realtor should have had multiple showings by now, despite the fact we were in the holiday season.

If a realtor is not getting showings, they should communicate it.  In a sales career such as real estate, there should be weekly communication.  Email will suffice;  Often, it is a more succinct way to communicate.

I think you might send the realtor an email, asking why there haven't been any showings.  And request for a weekly update - where they reach out to you.

If... the realtor cannot comply to that request, to communicate weekly, then time to switch.  You probably are under a listing contract, so ask to be released, or let it expire and find someone else.

Ron Fiscus · Answer

Thank you for the input, that’s what we were thinking too.  I appreciate your time to comment.

Doug Shapiro · Answer

Hi @Ron Fiscus,

If I were you I would find someone else.  I'm assuming you are paying this agent a commission if a deal closes?  The commission is meant to pay for the time, effort, marketing, negotiating, etc. that your agent will do for you.  It is for the value they provide in closing a deal.

When your agent is not communicating with you, then how are you supposed to know if they are doing any work?  Maybe they are and just haven't been letting you know.  But for a 30-unit property you should expect weekly updates as to what is going on (# of showings, # of interested parties, feedback from showings, marketing efforts, etc.).

I'm sure it won't be difficult for you to find other agents who would happily work very hard and provide you updates to list your property.

When to find a new Realtor?

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