All Forum Posts by: Bryan Scott

@Dominique Garmon The rules are different state by state, but many are also quite similar.

As a wholesaler, do you need agency representation? Will the buyer need representation? Sounds like you might be taking title, then reselling in a totally separate transaction - double close or ? If you are only assigning a contract to the buyer, do you need to have your agent list it in MLS?

If you are well-versed in these transactions, you could just have your agent represent the buyer (exclusive agency fiduciary) and treat you as "Customer."  Or, if KY law allows, she could act as "Transaction Broker," which means she treats both you and the buyer exactly the same, because she is not acting as fiduciary for either buyer or seller.  All she would do is handle the paperwork for the closing and make certain that both you and the buyer have same information.  She cannot negotiate or act as fiduciary - she simply communicates the facts to both parties, which includes material defects, etc.

If you want full agency representation, perhaps your broker would split the earned commission with a licensed colleague (her office or another) and have the colleague represent the buyer?  Probably not as desirable as your agent earning both buyer and seller commission sides, but everyone gets represented and the deal gets done properly.

Good luck with it!

@ Tenisha Walker: There are a number of differences between the two. I am no cheerleader for the NAR, but Realtor designation can be advantageous to both agent and client for a number of reasons. For specific differences that may benefit you as client, Google "Realtor vs. Non-Realtor; What's the difference?" and you will be presented with a mountain of information that will answer your question in gruesome detail. Then, you can decide for yourself whether this designation is important to your next transaction. Having been on both sides of the equation, I can assure you that this status by itself would not be my only deciding factor, but it would definitely be on the list.

@Mickayla Smith

Firstly, as you have already pointed out, you need a real estate license to represent your investors in the way you explained.  You also need an employing/responsible broker where you can hang your new license until you can become an employing, or independent broker (check rules in your state).

Part of the employing broker selection process should include a full explanation of your business plans with the investors, so that he/she can understand and accept whatever risk your business proposition might pose to their brokerage.  Once you have a match and understand your limitations, you can then craft your business plans to accommodate both your clients and your new employing broker.

BTW - you will likely find that your new broker will be very apprehensive about you signing any agreement for services and/or commission payments that has not been created by the broker and/or already approved by your real estate commission.  In your state, as a licensed agent, you will have access to lots and lots of fillable, commission-approved contracts, including listing agreements for both buyers and sellers, either through your broker or the commission's website.  So, no need for your investor clients to reinvent the wheel and create their own, because if they do, it very likely will be one-sided in favor of the originator and not approved by your broker to begin with.

Good luck on your new venture.  Sounds like fun!

@ Josh Ryan, To start, the "refi and pull cash out scenario on your personal res," should be confirmed with your bank or mortgage broker.  Sounds like you are looking to pull all of your equity out of your personal res.  That might be possible, but then again, might not as many lending institutions require you leave skin in the game for a cash-out refi.  As that is the basis for scenario 1, verify first then proceed from there.

So far as the "sell my personal res and house-hack," this sound like a more likely solution.  I would talk to more real estate pros (at least 3, including a local property management firm) than just the listing agent for the property of interest to verify the rental market and quoted rents for the type of property you intend post-rehab, then I would verify the "cosmetic rehab costs" mentioned.

I am not sure how large this property is, but when you say "cosmetic," I typically spend around $12-$25psf for interior work on a cosmetic rehab, then another few thousand on exterior, plus another $1,000 or more on landscaping.  When you say, "bring them up to date and make them very desirable," this sounds like more than a cosmetic facelift (which usually includes carpet & other floor coverings, paint, hardware, light & plumbing fixtures, electrical outlets/switches and maybe new appliances).

"Up to Date" usually means the above, plus kitchen and baths and a bunch of other items like doors & other millwork, windows, HVAC and other mechanical, etc., for which you will pay north of $30 to $45psf, plus exterior and landscaping.  In short, I'd run my numbers both ways; 1) basic facelift, and, 2) update rehab, to see which makes most sense.

Market rents depend on a number of factors; safety, proximity to employment, public transportation (if applicable), features, options, finishes and amenities.  Do your homework up-front, analyze based on facts, understand the impact on paper and make sure it will cashflow from the start (or, move on to another, better opportunity).  Include the tax benefits and exit strategy in your calcs.

Good luck!

First of all, focusing on, "It's currently being rented out, although not generating much return."  Unless you have an amazing relationship with your tenant, do yourself (them, and all the buyer's agents and buyers who walk through the property) a favor and make sure your tenant has moved out, fix and re-paint as needed, then tastefully stage the property.  As a long-time landlord, trust me, you will thank me for this later.

As for your list of questions, see my answers below, next to each:

I'm currently living and working abroad and go back to visit 1-2 times per year. I'm trying to find out whether this is feasible in this situation.  Always feasible to sell in your absence, but who will be conducting showings?  I hope you are not depending on your tenants doing all that needs to be done prior to each showing?  You want to make it as easy as possible for buyer's and their agents to schedule and show your property.  Any issues with this will only reduce your buyer's pool and make it a longer sales process.

1) Can I represent myself to sell my co-op in NYC? (I know it's possible in some states, not sure if it's the same in NYC)  As was stated by another member above, yes, always, but the question is how much will doing this cost you by not using a seasoned agent who really understands the process - start to finish - how to deal with buyer's agents, uses a showing service and an electronic contracts system, never-mind the issues you create for yourself by not listing the property as vacant and staged properly.

2) Can I do so while residing and working in a different country? (I can fly back for closing or other events that requires my presence)  Sure, as long as you observe the above issues and make sure all these steps are observed and items are properly dealt with.  Otherwise, it will be a miracle to have this work out the way you intend.

3) If both of the above are okay, when do I need to be physically present?  Again, if you handle the above issues through others, you never have to show up physically.  You can close the transaction remotely via a Fed-Ex package or other overnight carrier, or perhaps a mobile notary or equivalent (maybe a bank where you reside?) or via electronic contracts software, using a listing agent, or an attorney, or not (on both) and just depend on your chosen title company to close it, which they will, but if you have any issues or problems, who will solve them?  Most of the work on any purchase contract is done long before the close date, but what happens if there are issues just before close, or during the close?  Not too likely, but who handles in your absence?

4) Once I take the class online and pass the exam, what's next before I can represent myself to sell my property?  It may not be as simple as you think from a cost perspective.  You may well be able to take and pass the exams after passing the requisite course material, but it costs in several ways to maintain a license.  You will incur up-front and monthly, or other periodic fees to get your license (after paying for the education and exams) and you will have to "hang your license" with an employing broker, which will also cost you monthly or periodically to keep it in good standing.  Plus, you will need to decide whether or not to become a board member Realtor, which also costs annually at minimum.  Finally, to maintain an active license, you need E & O Insurance, which is another $200-$300 per year on top of the above.  Unless your intent is to make your living as a licensed agent (Realtor or just Real Estate Agent), do yourself a favor and just don't.  Oh, and let's not forget about the ongoing "continuing education" credits you need to amass before renewing your license (assuming you become a "Realtor").

If your primary motivation for getting a license is to save money selling your own home, it is totally unnecessary, but you should observe the necessary steps required and market rules for selling, whether via an agent, or yourself.  It's all about processes, procedures and a bunch of experience to get your property sold, which a good agent makes it seem easy.  Unfortunately, unless you have been a real estate practitioner, and a good one, you don't know what you don't know, which makes a conversation like this incredibly difficult to understand from a layman's perspective.  Some things you just have to stipulate are true and trust in others to assist.  This is one of those things.

You need help selling your property if you wish to get the largest offer in the shortest amount of time.  If you choose to venture out on your own, it will cost you dearly.  Best of luck! 

@Ashley Herring

In Colorado, it matters a great deal.  I have to disclose the fact I am licensed, because if I do a deal where this was not disclosed and something happens that finds it's way into court, it will be discovered and you could lose your license, or at min be fined, censured, suspended, or some combination thereof.  I seriously doubt this is any different in your state, but to be sure, you should contact your Real Estate Commission (or equivalent) and find out.

The question I have is why you might want to hide the fact you are a licensed agent?  Would it not be easier and more credible to advertise the fact you are, including all the training you receive, continuing education, code of ethics, and all that goes with it, to make yourself appear a better solution than many "We Buy Houses" guys who do not have such scrutiny bearing down on them?

@Ashley Herring, I would contact your local board and ask for sure, but in Colorado, the Real Estate Commission rules require you make it obvious, on any promo or advertising materials, who the broker is, in addition to you (as agent, or licensee), who can also be on the mailpiece, e.g., ReMax Advantage, Ashley Herring, Associate Broker, then your contact info.

Beyond that, to avoid commission rules concerning an infraction called, "Sign Crossing," (a rule in Colorado) you should have a disclosure printed on the mailpiece that resembles the following:  "If your property is currently listed, please disregard this advertisement."

@Bryan Carleton Questions for clarity:

1) Prior to your purchase, was the property listed, or off-market?  I presume the latter if there was no listing agent and you used an attorney to close.  That said, your agent was not involved, except as your advocate, for which you had some sort of arrangement, or not.  Sounds like the arrangement might have been that she would list and bring you a buyer after rehab, which is a good carrot.

2) If, as part of your mutual listing contract, she helped you decide list price and worked with you on a marketing plan, what went wrong?  Why no offers, but better question is:  Is your listing seeing a "normal" amount of showings for that product and price point?  If not, question everything, including the media layout used to fully represent and offer your property to the market.  Smart Phone photos, or professional, wide-angle, HDR still photos?  360 Tour?  Open House?  What feedbacks have you received from showings that have already occurred?  This is incredibly valuable information and, when you hear the same thing more than once, perhaps it is true!?

3) The truest measure of value is what someone is willing to offer based on what they see - Price/Value relationship.  Did you and your listing agent discuss "battle strategy" on when/if to reduce price and why?  Were you involved up-front, or have you requested specific info from your agent to validate her listing price, suggested sales price, marketing plan, etc.?  And, do you agree with her assumptions?  Based on what empirical data?

Not to put to fine a point on it, but as agents, we have a responsibility to our clients to provide actionable information that results in a sale (list-side) or a purchase (buy-side).  If we do our jobs well, your expectations are met.  If not, then not.

As others have stated, I also value these relationships. Keep simple things simple: Reduce everything to writing, including how to react to conditions as they develop or change (think business plans). That way no one gets their feelings hurt later on. If there is a way to salvage this as a flip, then work it out with your agent. If not, then decide on a trigger date to move it to BRRRR, or rental, or whatever serves your portfolio and financial needs and plans.

Sincere best of luck!

@Joshua Stratton  As others have already point out, no, you cannot be on his closing disclosure/settlement statement as any sort of fiduciary or transaction broker, but if he values your "off-line counsel", there is nothing stopping him from writing you (Joshua Stratton) a check, gifting you merchandise, or giving you anything of value for reasons other than that transaction.  No paper trail, just a friend recognizing value from his friend.  No big deal. 

I have a client / house seller who needs a painter for 2-3 days worth of work at an SFU property near Yale & Peoria.  I am looking for recommendations and someone you have had good luck with? Thx in advance!