Use a realtor to buy a Short Sale?

Question

Long time lurker, finally getting serious about investing in real estate as an alternative to the stock market.

Question:  If I am looking to buy a severely damaged (flooded basement, mold, etc.) home on a short sale or right before it enters short sale, do I need a Buy-side realtor?  I've never had a good experience with a Realtor as I am a pretty smart person and have done a lot of house renovations/repairs/inspections and know contractors, etc. to do all the repair work or do it myself.

Are there any more short-sale / wholesale /investor minded realtors that will cost less to use, just to help me manage the short sale process?

Also, if there is anyone in Indianapolis or Fort Myers I can talk to that would be helpful.

Thanks

Jim Bartek · Answer

@Elena S  Thanks for the reply.  These are all good points. I have just seen other threads, mentioning especially in the <$100,000 range for short sales that you can be better off without your own realtor for a variety of reasons.

Joe Facenda · Answer

I am a Realtor in Northern Virginia so I obviously can not help but I can address the value add of buyer agent in a short sale.

First, let's back up to the value add of a buyer agent in general.  An active agent who negotiates dozens of deals a year just knows the how to make a deal happen better than all but the most active investors.  That said, I will grant you that there are deals that are so smooth that perhaps the agent does not add value.  But is your deal one that will be super smooth or one that will hit bumps in the road that only a great agent can work around?  Going in, you never know.

So what is the value of a deal getting done vs not getting done?  I know that I have saved many from the ash heap but there are others where, admittedly,  I just  stand by and direct traffic.  And then there is a 3rd group where I see turbulence and make sure I find a work around  before the plane starts to shake.  My clients often never even know there was trouble ahead.

On to the short sale.  I am sure you know that the listing agent represents the seller.  And I know you feel comfortable negotiating directly with that listing agent. Now a short sale involves so many delays, stops and starts, misdirections and minefields that if you have not done several of these, you will almost certainly be wondering if the listing agent is giving you the straight story. There is no one else for you to really call to find out.  The bank will never speak with you about the seller's situation.

A good buyer agent will let you know what is "normal" (if you can call anything normal in short sale) and what is not.

A good buyer agent will tell you that maybe you need to exit this deal and move on.  A listing agent will not.  There are important reasons the listing agent and seller want you to hang around as long as possible.  Mainly the banks only work on finalizing their numbers when there is a valid contract on the table.  Even if you eventually back out, if the seller can get the bank to show their hand, it is a small win for their side.

There are many more reasons I would want an agent on my side in a short sale particularly if I only have one or two under my belt.

That said, I do have a great investor friendly agent I can recommend in Indy.  PM me if you are interested.

Nick Schroeder · Answer

Hi Jim,

Im an investor, flipper and agent over in Cape Coral. If you need help with that purchase Id be happy to help you. Also since I've flipped multiple properties in the cape I'm sure I could refer quite a few good priced and good quality workers to you

Let me know.

Brett Goldsmith · Answer

Makes sense to have someone representing you in my opinion whether it be the listing agent or in finding your own agent. A competent agent to reduce liabilities or to go up for bat for you is important. Shouldn't affect your bottom line much or if at all depending on the investor or mortgage insurer. Generally makes no sense to just let the mortgage servicer just consume the commission as this likely won't help you get a better deal; in my opinion you actually lose leverage.

Elena Sweeney · Answer

Just wanted you to know having buyers' agent or not having buyers' agent doesn't reflect the value of the property or sets the price.  For you as a buyer having one adds tremendous advantage for you: extra set of eyes for due diligence , negotiation, paperwork ALL AT NO COST to you. When dealing with short sales, my advice- get a lawyer . If you can't afford one, at least go with your own agent.

Jim Bartek · Answer

@Joe Facenda thanks for all the good points, PMing.

Jim Bartek · Answer

Yeah, i have gone through a lot of the podcasts, bought the books from here, and am going through pricing/general contracting on some issues with my primary residence.

Just haven't had luck with agents, but seems like the consensus here is i just need the right investor agent.

Jim Bartek · Answer

Thanks Jason, Good Point. How did you go about finding an investor friendly agent? Anything besides the obvious of asking other investors on BP? thanks

Use a realtor to buy a Short Sale?

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