Am i being too greedy

Am i being too greedy

Real Estate Investor · Chillicothe, OH · Member since 2008 · 33 posts · 1 vote

Okay a friend of mine are teaming up to cover more ground in the whole selling market and he wants to use a Realtor to sell these houses that we come across cause he seems to think the Realtor can sell them faster then using a buyer's list of other investors that buy these empty houses that we find. I personally feel like using a Realtor is all and find on certain houses but not on every house that we get coming in the front door. Right now i have a list of 30 houses that a bird dog has brought to me and my partner wants to put all of them under contract and list them with a Realtor and i keep telling him that is not a good idea . Because i do know this won't happen if we sold all of them at 50,000 a piece at the 3% that the Realtor wants that's 45,000 could have been in our pockets. Am i just being greedy or should i have a right to want to keep as much as i can?

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J ScottPro Member
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Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
15y

There are two parts to my answer:

1. In terms of being greedy, there's always a trade-off when it comes to be being greedy. In this case, the trade-off is how much work you'll have to do. If you can successfully get a realtor to sell your deals, you'll have to do a LOT less work than if you have to find buyers yourself. The time you save could be spent finding more deals, which in turn would likely make you more money, even with the commission costs to the agent. On the other hand, you can do more work and fewer deals, and keep more money on each deal. It's a trade-off only you can evaluate (though I certainly know which way I would lean).

2. The bigger question here is whether a realtor would actually be successful in selling your deals. Consider that most agents work with other agents and their clients through the MLS, and most serious cash buyers aren't going to be represented by agents looking for deals on the MLS. Secondly, depending on how you plan to wholesale the deals (assign the contract or double close), you may need to get someone else (the actual seller) to pay the commission to both your agent and the buyer's agent. Personally, I don't know too many (any) agents who have an investor network larger than a buyer's list I could put together myself.

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  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
    15y

    There are two parts to my answer:

    1. In terms of being greedy, there's always a trade-off when it comes to be being greedy. In this case, the trade-off is how much work you'll have to do. If you can successfully get a realtor to sell your deals, you'll have to do a LOT less work than if you have to find buyers yourself. The time you save could be spent finding more deals, which in turn would likely make you more money, even with the commission costs to the agent. On the other hand, you can do more work and fewer deals, and keep more money on each deal. It's a trade-off only you can evaluate (though I certainly know which way I would lean).

    2. The bigger question here is whether a realtor would actually be successful in selling your deals. Consider that most agents work with other agents and their clients through the MLS, and most serious cash buyers aren't going to be represented by agents looking for deals on the MLS. Secondly, depending on how you plan to wholesale the deals (assign the contract or double close), you may need to get someone else (the actual seller) to pay the commission to both your agent and the buyer's agent. Personally, I don't know too many (any) agents who have an investor network larger than a buyer's list I could put together myself.

  • Flipper/Rehabber · Seminole, FL · Member since 2010 · 859 posts · 316 votes
    15y

    You will have a hard time finding a realtor to help you sell. Most of them think wholesaling is illegal. I dont know if you can sign a listing agreement either if you dont own the house.

  • Real Estate Attorney · Fairview Park, OH · Member since 2011 · 36 posts · 25 votes
    15y

    I am assuming that you own all the houses, if not, see below.

    Put an exception on the contract. If you have a list of cash investors, they generally close quickly. Tell the realtor, we will sign a contract for all, but if you get a signed agreement on your own in the first 30 days, then they get a nominal fee or nothing, for that house that sells. Because you have a large listing, they will be fine with it. OR, they just won't do anything until the 30 days is up. Either way you are doing well: If it sells, you did without him 2) the realtor can start marketing and preparing when your time is up and you can sell quicker.

    If you do not own them, the realtor can not put the listing on the MLS. an option does not convey the ability of marketing according to Realtor Board Rules (at least not in this area). The options/assignments or contracts have to be specifically written so the Realtor is not in violation of their MLS agreement. Find a local attorney to put the correct clauses in your contracts. An ounce of prevention ...

    Good luck

  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    15y

    If you are wholesaling rehab opportunities to other rehab investors, you do not need an agent to sell them, just build your own large database of investors with all-cash and shop for their criterias.

    I agree with Jason's advice and also agree with Angelo that you could give deals to an agent with the written contract in the list agreement that states that if you find your own buyer from your own resources, listing can be cancelled without compensation to agent.

  • Real Estate Investor · Chillicothe, OH · Member since 2008 · 33 posts · 1 vote
    15y

    Here is a question, with us just starting out with the wholeselling would other investors take us seriously if we have no contracts in hand to offer to the cash buyers or would we want to know their criteria first and then go find what they are looking for. My partner's history has alot to do with being a Realtor and not so much in as being a investor side of the fence. Which is all fine and dandy but its like comparing a apple and apple sauce. Which is pretty much the same but different completely at same time.

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