Using an Agent for small apartments?

Question

Is it standard to use a real estate agent when purchasing small (12-unit specifically in my case) apartments? The info on the property is already available through the listing broker, I know how to run the numbers, and am familiar with the area. I understand it's good to have someone "on your side", but it seems like an unnecessary middle man when I have questions about the property.

John Warren · Answer

@Steven Kleppin if you are buying apartments off the MLS, there is no reason that you should not have a buyer's agent. If you work with the right agent, they will have experience and will bring a whole team that you can lean on (attorneys, lenders, contractors, etc). I often times represent my clients here in the Chicago western suburbs on 5+ units on MLS deals. You either have a buyer's agent representing you (for free) or you have the listing agent representing both sides (but probably representing the seller more... its human nature).

If your deal is coming from a commercial brokerage, however, they may not even allow a "co broker" on the deal. Some commercial brokerages prefer to keep the transaction in house, and do not have other agents show the properties. Part of the learning experience for me as an investor was that these deals still sometimes make sense, although many will not.

Cody L. · Answer

Big shock - I disagree. One of these days I’ll agree with others here.  I don’t use agents regardless of deal size.

Two reasons:

The agent will push your offer as (or if) they get the whole commission pie.

Tell the seller you can keep the 3% that would normally go to your broker. Depending on how his listing agreement is written he may only have to pay his selling agent fee and not the points baked in for a buyer. “Saving” you an amount equal via lower accepted price.

Third bonus reason: I like dealing with the seller myself. No middle men. It’s bad enough having to deal with a sellers broker. I don’t want another layer. And the sellers agent might be a friend/family doing it for a reduced fee just to help get it on MLS. In that case they won’t mind if you just work out a deal with the seller directly

Osvaldo Ray Orozco · Answer

your scenario is why I started to offer buyers a rebate on the commission for scenarios like this (I am in Florida) - as a buyers agent who represents you ( not a "transaction agent" or variant there of which is bogus ). I am an experienced attorney who has been doing real estate for over 20 years and an investor who has owned small buildings like this so I can help with many aspects of the deal.  I recently got my my license and am starting to let sophisticated buyer know about this. You should bid out for realtors to offer rebates of their commission to you ( price reduced ). If you go solo, other agent may score full commission and / or you pay more that you should have and you'll be going solo ( so you better know your stuff).  A good local agent will also provide advice that wont hurt.  Good luck

Ray

Bjorik Mutize · Answer

Having an broker will save you time and add value through advocacy during the transaction process. Especially a broker you interview that knows investment properties.

A lot of people opt out because they don't want to pay commission then miss key steps towards closing.

Get a broker.

Osvaldo Ray Orozco · Answer

@Aaron Gordy ..That's fine - I hear you,    but I have in mind people who often times buy cash, have their own contracotrs/crew and know their way around (local bldg dept, etc ) and they specifically feel that the commissions paid to agents in prior transactions have been excessive and try to find any way to strike what they feel is a fairer balance.  Trust me, I negotiate hard as well.  We usually know when we have reached the bone.  I dont offer the rebate automatically.. but this poster was a close call. I will look you up if  I am in Austin ..take care

Aaron Gordy · Answer

@Osvaldo Ray Orozco Not so sure about rebates... I make it a point to save my clients money and make them money by buying a heck of a deal/negotiating like a madman for them/pointing out added value plays/putting them in the contact with the right folks (mortgage, contractors, attorney's, city folks)  etc. and its usually considerably more than their savings. A good realtor will know who to contact for off market deals too. The seller's agent is going to represent the seller, He/she has no obligation to you except to treat you fairly.

Bjorn Ahlblad · Answer

Yeah I definitely use a buyer's agent when buying an MLS listed property-why be stuck with the seller's agent? I always use the same agent; she knows how I work, gets me information available only through premium resources. Sometimes properties have back stories, sometimes they will list on some MLS's and not others, listings appear as new-but they have in fact been on and off and made to appear new. The seller's agent would never let a buyer know anything about that; but a knowledgeable buyer's agent will sniff that and more out for you.

Michael Reyes · Answer

Although I don’t have a MF property purchased or under contract yet, I think that this may be unnecessary.  I would think that having a great PM on your team would be of greater value.  To me, a PM would have a better pulse on the local MF market, unless of course this realtor has experience with MF management, acquisition and disposition.  My $.02.

Would love to hear what direction you took.

Cheers,

Frank Procopio · Answer

Either way the seller will be paying the commission so it offers no savings to you. It is always a good idea to have someone fighting on your behalf and an extra set of eyes on stuff. You would want to make sure you had an agent that specialized in those types of transactions and was skilled. They are going to negotiate on your behalf and with that many units there is a lot of issues that can possibly arise

Using an Agent for small apartments?

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