Real Estate Agent Fee

[Derek Caffe]

I've been searching for an RE agent to make an offer on my first investment property. I found a great agent that says he works with investors exclusively. After talking on the phone once, we meet at a 4plex I picked out to make an offer on. We view the property and I decide to make an offer of $55,000 (asking price $129,900). Here's the email that followed:

I think that a $55000 offer is OK. If you intend to occupy as a primary resident, then FNMA likes that.

Cool?

If so, then I will draft a brokerage agreement and write up the offer, OK?

Now, I'm a newbie in both investing and purchasing a home in general, but for multi-family homes that range from $150,000 - 50,000 a $3,000 agent fee aside from other closing costs seems a bit outrageous. Could I get a word of advice from experienced investors?

[Elizabeth Colegrove]

@Derek Caffe

Personally I would find another realtor. If all you he is doing is writing the offer after you have found the properties and vetted them. Than no,no other value is offered.

That being said, with the relationships I have with my realtor I would think about it, if that is there request. To date, I have never had this request. The arrange has simply been to refer them any business and use them exclusively.

My realtors use their mls connection, networking and area knowledge to find and close the deals. I have gotten many deals simply because they knew the sellers agents and were able to either find a "pocket listing" or write the strongest offer because we knew the what motivated the seller. I have found houses/put offers on a house because my realtor (who has become my friend) was over having dinner/drinking wine and a house I had been watching came up. I mentioned it was over price and she mentioned the local "trick". If I get the house at the price I want (its still a process) it would be because of the dinner/wine. We have also spent a day looking at houses and never found anything.

In your particular situation for this one house, I recommend you just use the listing agent in this case. I recommend you keep looking for an agent that wants to create a "relationship". With 2 out of 3 of our realtors we have bought 2+ houses. The other one we have referred a bunch of people. If all goes right, by the end one of our agents will have help my family and I close on 6 houses. Yes your buying a cheap house now, but if all goes right you will continue to invest with them overall and it will even out.

Just my 2 cents