Should become an agent for my own deal

Question

So here is the deal, I would love to hear your opinions.

I have money in an apartment complex here in Oregon I own roughly 1/4 of it, and have been totally passive in the operation.  The complex is going up for sale fairly soon.  One of the owners is a commercial broker and is selling it, which is fine.  But I was thinking I should be my own agent and find and close the deal when I buy the next place, and keep commission myself or subtract it from the price of the complex.  I think the next place will be 600k to 800k (assuming a down payment of 25-30%).  I feel I know the market as well as anyone and understand valuations etc.

I was hoping in addition to buy an additional duplex-quad next year which I could get a commission on as well.

I love investments and real estate but I don't want to be an agent for others unless it fell in my lap.  I'm not what you would call a schmoozer.

Have you ever thought of doing this for yourself.  I don't think anyone will do as good a job for myself as me.  What say you.  Thanks again.

Eric

Bill S. · Answer

@Eric Bilderback I do it for myself. It is not a money maker unless you do more than one deal a year or your deals are on the larger side. As @Joseph Cox pointed out, there are costs and commissions have to be shared. Some of this can be diminished by opening your own brokerage after you have adequate experience. Even that has costs but if you are active, it does pay for itself.  The money is not just what you might think at first glance but I believe it to be worth it.

While most REOs won't let you take a commission, that is actually good because then your managing broker doesn't get a take. They look at net and so you write your offer lower and the seller's agent gets the same.

The greatest value for me is MLS access.  I can pull comps and perform my due diligence. I can see those details about the transaction that are not so obvious without the MLS.

Joseph Cox · Answer

It's a lot of hard work being an agent, but even if you just hung your license at any old broker only to do your own deals, you may find that all the "great" deals on your MLS have clauses on the commission. For example, I found a great property (REO) this week, but in the Realtor section, it stated that no commission would be paid if buyer was a Realtor or spouse of one. But that's pretty much when a property is being off-loaded cheap.

Plus there's the added expense of members fees for your local board, state board, and NAR as well as MLS fees and E-Key fees.

Plus the commission you earn gets split between you and your broker. If your broker offers lower than 70/30 find someone else. 100/0 brokerages typically charge a monthly fee instead.

Not to put you off. The positive side, is that you get a good education in RE Law, and see why Realtors typically hate investors. (Not me, I might add!)

JOAN DICKIE · Answer

Check wirh your state laws regarding buyer's commissions in personal transactions.  In Wisconsin, we are not automatically entitled to a commission if we represent ourselves in a transaction.  It can be obtained if you put special wording in the contract.

Jamane Y. · Answer

@Jedd Braunwarth  and @Eric Bilderback I too have decided to get licensed. The laws in North Carolina seem to be getting more realtor licensed friendly for lack of another word to me. And I feel getting my license will help me in whichever area of real estate I intend to specialize in.

Jedd Braunwarth · Answer

@Eric Bilderback I am taking my pre-licenses courses right now for this same reason. I may actually start buy hanging by license but be a passive/referral agent. I do not get all of the perks such as access to the MLS but do split (20-30%) of the commission with what whatever side I am on (buyer or seller). I already have a great Realtor and she actually encouraged me to do this and continue to work with her. After one or two properties the commission will easily pay for the money I spent on my license plus some. I only pay a very small (couple hundred $) annual fee to hang my license this way. I can always start paying more as an active agent at any time if I end up feeling that is the better way.

Another perk for me going this route is that I have been helping people analyze deals (can't charge for it since I am not licensed yet) as more of a consultant in my area. I then have been recommending a Realtor for them to use as they look at potential properties. This way I will make that same referral commission by referring another investor to my Realtor.

Eric Bilderback · Answer

I should looked.  My bad.

Rusty Thompson · Answer

I've seen it a few times on the board. Keeping the buyers side of the commission as a perk.

Should become an agent for my own deal

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