Should I use a realtor?

Question

Russell Brazil · Answer

Some people have this misconception that they have a better chance by going through the listing agent. And sure, sometimes that can be true. But the majority of agents listing the majority of properties have serious businesses. They are representing their clients to the best of their ability....because doing good for that client and getting 10 referrals is much much more important than double ending the deal.

When an unrepresented buyer comes to me as the listing agent, there is almost 100% chance they are paying more for that property than if they had an agent. Almost every time I can push them just $10 or $15k higher than is reasonable, because they dont know any better.  They think Im incentived to sell to them to get both sides, but when you are making many hundreds of thousands of dollars a year, that one extra side isnt the incentive. Doing an awesome job and getting a ton of referrals is.

Michael Noto · Answer

In this business, especially when you are new, it is important to surround yourself with people who have your best interests in mind because in the real estate investing space it is very easy for an experienced listing agent or seller to take advantage of a new investor without representation during a transaction. They see you coming from a mile away.

Now, with that said not all agents are created equal. Take the time to find one in your area that has closed multiple deals on the kind of property you are targeting. For instance, if you are looking for an owner occupied multi family find an agent that has gone through the process with a client and been through the different aspects that are unique to buying that kind of property.

Charlie MacPherson · Answer

@Grant Dennis @Russell Brazil nailed it.

In any negotiation, real estate related or not, it's critical to understand the interests and goals of each party.

The seller's agent is required by law and by ethics to get the best possible deal for the seller.  The buyer's agent has the same obligations toward the buyer.

While double-ending a deal (disclosed dual agency) is attractive to the agent, it's not good for the buyer or seller.

Here's why;

As a seller's agent, I'll push hard to get larger deposits, faster closing, higher price, fewer contingencies, etc.

As a buyer's agent, I'll push hard for exactly the opposite.

As a disclosed dual agent (representing both sides with their permission), how can I possibly do those things?  There is a glaring conflict of interest.

I also owe each side a duty of confidentiality.  If I know the seller wants $100,000 and the buyer has told me he will pay $110,000, I cannot discuss those numbers with either side.  All I can say is "let's write an offer and I'll present it".  The buyer will most likely over pay.

If I were to disclose confidential information to the other party, I'd have committed a grievous violation of my duties.  If it came to light and a complaint was filed, I'd almost certainly be subject to penalties from the state, including fines, suspension or license revocation.

Not to mention that the full commission is pre-negotiated before listing the property - it's part of the listing contract.  There is no savings by dealing with the seller's agent.

That's the long answer.

The short answer is YES, you should use a buyer's agent.  It won't cost you anything additional and you'll have an agent who is on your side.

Lien Vuong · Answer

I think this is an important point to consider if you're looking to invest and be involved in the RE industry long term. Partnering yourself with the right agent will help you immensely in terms of economics, business strategies, and market knowledge.

First of all, a buyer's agent representing you is almost always paid by the seller's side (aka free service to you), so wouldn't be a great bonus to have someone who's on your side fighting the good fight for you. Additionally, finding the right investor focused RE agent will help you to analyze deals, keep you apprised of off market deals, and allows you to keep a pulse of the market conditions.

To address some of the point that are made on the thread - it is not only likely the the seller's agent will try to steer you towards a higher price and represent the selling side in the best light but it is their fiduciary duty to have the interest of the SELLER because that is their first client. This is the law.

Always use an agent if possible in all your deals because on the buy side they will know all the procedural process and guide you in that, esp. in the infancy of your career. On the list side when you go to sell your investments, they will properly market your home and NET you the most for you property.

Go the Robert Kiyosaki way and take care of these people, they will out earn themselves for you and make you very wealthy!

Shawn Ward · Answer

@Grant Dennis my company does. The seller is paying the fees anyway, so let the agents do the work and get the home.

Onward!

sjw

Nathan Wankel · Answer

@Grant Dennis

I would go ahead and get a realtor that way you don't have to worry about the selling agent spending more time making sure the sellers have a better experience than you do. Not all selling agents are like that though so it comes down to whether or not you feel comfortable taking the risk.

Jeff Morelock · Answer

Hello - why not use every tool you can to find deals? Its not easy in the Tampa Bay market. A Realtor does not, and should not, be you only tool.

Should I use a realtor?

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