All Forum Posts by: Steve H.

@Jacob Fitzgerald From an investor's perspective why would I want multiple agents looking for me in the same area, and why would I choose an agent that didn't send me the deal? Of course I would want to work with the agent that sent me the deal because that would encourage them to continue sending me deals in the future.

It is actually exactly this reason why I originally asked if exclusivity was required by all agents. Why should the buyer be required to use a specific agent (due to exclusivity) if that agent _didn't_ bring the deal to the buyer?

It's not that cut and dry. If an agent has shown me lots of properties and did work for me, then of course the agent should be compensated if I utilize the agent's service during the buying process of one of those houses. But there may be off-market deals, auction purchases or other non-MLS transactions that never involve an agent from start to finish. If I were to purchase a house from an auction and the agent was never involved in any way, why should they be paid for that? Different agents have different specialty locations. If I am looking for houses in two areas 1 hour drive apart, it makes sense that the agent I use for these two areas could be different.

I know my question struck a nerve amongst some of the members in this subgroup, and rightfully so since this is an agents' forum.  But to any other new investors with this question who have been reading along, I will summarize the experience I have gained since starting this thread:

1. In considering a Realtor, meet with many of them and have an honest conversation of what you expect and find out what they expect. Some agents require exclusivity, others do not. After the first agent I met required exclusivity, the subsequent agents I met with did not. Everyone does expect to be compensated for their services, and I agree.

2. My local REIA ran a seminar on finding an investor-friendly agent. The invited guest speaker was a Realtor that did not require exclusivity and explained why it worked for him (answer: trust and repeat business). Just because an agreement is non-exclusive doesn't mean that the investor is trying to take advantage of an agent in any way.

3. Build relationships of trust that are mutually beneficial. If an agent helps me out with a deal, I will gladly compensate them because I want their assistance with the next deal too. But on the flip side, if I work on a deal myself that did not involve an agent, they should not expect to be paid on it. It goes both ways.

@Noah Gouldsmith and @Mike Cumbie , thanks for the encouragement that one can find Realtors that are willing to modify the buyers agreement so as to be beneficial to both parties. Again, at the end of the day, no exclusive or indefinite contract would be needed if the relationship is mutually beneficial.

 I think this properly summarizes the sentiment of this thread. Thank you to all. My initial reaction to the agreement proposed to me was "no way I'm signing that", because I was not given any time limit that it would stay in effect and full exclusivity was expected. However it does appear that there are agents out there that are more flexible in with the buyers agent agreement, and it is up to me to find the right agent where there is mutual trust between us such that I want to work with the agent and the agent wants to work with me.

@Irene Nash Thanks for the suggestions about starting with a limited time agreement and also modifying it to cover specific areas. I hadn't considered the possibility that buyer's agent agreements were negotiable. 

@Russell Brazil No, i'm not expecting services for free. My question was whether it was reasonable to only pay the agent commission for transactions that they were involved in in some way. In one of the areas I'm interested in, there are very few houses for sale on MLS that meet my 3 bedroom criteria (like 5 houses). I would like an agent to help show 2 or 3 of those to me and of course they would be paid if I purchased one of these houses. If they find a house prior to it being listed on MLS, of course they should be compensated. But how about if there isn't much activity from the agent (again, due to the specific area i'm interested in) but I find a house for sale not on the MLS?

After silently watching the BP forums for about a year, I'm ready to find my first investment property. There are a couple of houses on MLS in the West Chester, PA and North Wilmington, DE areas that I am interested in, so I thought a good start would be to find an agent who could give me some feedback and show those properties to me.

I made contact with a Realtor outside of BP and let them know that I was a new investor who was searching for houses on my own, but also would be interested in having an agent help with properties on the MLS. We set up a face to face meeting and talked about what I was looking for. At the end, the Realtor told me that he would be happy to work with me, but that he would require a exclusive buyers agreement to do so. I politely declined and left, saying I wasn't ready to sign into an agreement.

So, my question is whether this is normal or not? It doesn't make sense to me to have to sign an agreement that would require me to pay him a buyers agent fee regardless of how I find the house. If the Realtor brings me the lead or takes time to show me a MLS property and I buy it, then of course he deserves to be paid. But if I find my own FSBO property or purchase from a wholesaler, why should I be obligated to pay him? I understand that in a retail situation where a home buyer wants a full service agent, this might make sense, but I don't need his help learning how to be approved for financing, and I don't need his help on leading me through the steps of buying a house.

Is my expectation realistic? Do the investor-friendly agents on this site require their investor clients to sign agreements requiring the use of their services? Is exclusivity expected? Even though Southeast PA is not far from Northern DE, the houses in these two areas are quite different, and in this first experience with a Realtor it was clear he was familiar with one of those markets but not the other. Can I not use a separate Realtor for the two different markets to make sure they are experts of their respective areas?

Edit: I just saw a thread from 3 years ago on this issue, buyers agent exclusivity , so I guess the answer is that many agents ask for it, but the advise is that REIs shouldn't enter into such an agreement. That means there are Realtors that don't require this, perhaps here on BP?

Hi Ricardo, I'm in the same boat as you. If you do a search on BP, you'll see that there are several prior posts about PPR and you can read up on those posters' experiences.

@Carlton Wood I live in Delaware county PA and have closed on two houses without an attorney present, no problems with either. But you need to do what makes you feel most comfortable.

@Bernard Reisz Thank you for elaborating on some of the tradeoffs between checkbook vs traditional SDIRA.

Thanks @Brian Eastman for your advice. Do you or @Jay Hinrichs have any recommendations for attorneys who can help set up an checkbook IRA for a low cost? If you do, I would appreciate it if you could PM me the info.

The other question is in which state to form the LLC, PA or DE? I live in PA. I have registered an S-Corp in DE for my consulting day job, but as a result I have to file both DE tax and then also file PA tax return for the same S-Corp because as the owner I live in PA. I know that DE is more corporate friendly, but not sure if it matters for a IRA LLC.