Should I get a broker if I found an off-market property?

Question

I've been meeting with a property owner who wants to sell and would like to do a cash deal.  Based on a back of the napkin calculation of the possible selling price and monthly costs, etc, the property would cash-flow.  I've gotten to know both him and his wife over the last several months and they say they are both getting old and just don't want to continue being landlords.

There is obviously a ton of due diligence I would want to do before moving forward, but one top question I have is whether or not I want to get a broker involved.

I'm not really concerned about the broker commission, I'm more just not sure what might happen after I inform a broker about an off-market listing in a super hot market.

Any thoughts or insights would be highly appreciated!

-Anders

Anders R. · Answer

Thanks all for the great feedback and advice! @David Irwin congrats on having pulled that off w/o a broker! @Nick Thomas good point about the signed agreement @Joshua Janus @Mohammed Rahman yes, the reason for wanting to work with a broker is the unknowns and making sure I cross all the t's, dot all the i's etc. @Dwayne Poster good advice, I'll definitely be reaching out to my attorney as a next step.

Thanks again!

Kelly Asmus · Answer

If you feel comfortable with the paperwork and know that you have your legal end covered, then proceed without a broker. If you are nervous about doing the correct paperwork and disclosures, then hire an agent. Find someone you trust. Sign a broker agreement that keeps everything confidential and proceed with the contract, disclosures and documents. If the agent went around you to the sellers direct you have cause to sue the broker because you have a contractual agreement.

Michael Gessner · Answer

@Anders R. No you don't get a broker involved, especially in this market. Keep the details extremely quiet, get it into contract asap, get a broker involved especially with out a contract, and your damn sure to loose the deal.

Eliott Elias · Answer

Why get a broker involved? Put it under contract first and foremost before you share address with anyone. Then present it to a broker

Dwayne Poster · Answer

Chat with your attorney and see if they can supply you a contract. I personally use local board contract stripped of broker related stuff. You have to feel comfortable that the contract protects your interests

David Irwin · Answer

@Anders R. I did the same thing and used no Realtor or Broker to purchase (2) properties in California.

Get it in writing and do your research regarding legalities in NY. I used the Escrow Contract as the final contract and am now the owner!

Joshua Janus · Answer

I would reach out to friends and family to find a realtor that they trust. I understand that you feel hesitant bringing an off market deal to others, but if you truly have a relationship with the seller they will prioritize that over anybody else trying to buy the house. I would advise finding a realtor so you can have your t's crossed and your i's dotted when it comes to the paperwork, communication with lenders, title and other important steps when buying a house.

Mohammed Rahman · Answer

Hey @Anders R. congrats on finding an off market property! I'm a realtor & investor and can confidently say you don't need to get a broker involved. Is there any specific reason why you ask? I'm wondering whether you're asking because you're unsure of the unknowns that may pop up when going further ahead with the transaction. Telling a broker you have an off-market property under contract won't make a big difference, assuming you're already under contract.

The broker/agent can provide value if they help you find info about the property that would make it a bad deal (for example, a broker may be able to find out whether this property was ever under contract before and why the previous transaction didn't go through, e.g. if there were property issues etc.)

There are some not-so-great brokers out there that may contact the owner directly and encourage the owners to list the property with their firm (since the owners are already wanting to sell to someone, they may list publicly with a broker if they've been told they could fetch a higher price).

My $0.02, if it's a simple residential transaction then I don't think you need to involve an agent/broker. Attorney, title company (sourced by attorney most of the time), inspector, & contractor are the people I would recommend you have for this deal.

Shoot me a DM if you want to chat more, happy to just point you in the right direction, but it sounds like you're already on track!

Nick Thomas · Answer

@Anders R. If you have a signed agreement with the agent they cannot act against you. Meaning they will serve you to get you that property.

Should I get a broker if I found an off-market property?

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