Rookie Reply: Can Agents Help You Find Off-Market Deals?

Ashley:
This is Real Estate Rookie episode 116. My name is Ashley Kehr, and I am here with my cohost, Tony Robinson, and we are getting ready for the Bigger Pockets conference.

Tony:
I’m super excited. I’ve never been to New Orleans and I can’t think of a better excuse to go to this lovely city then with hanging out with my best friend in the real estate world and all the rookies that are going to be there with us.

Ashley:
You mean best friend in the whole wide world? Not just in the real estate world.

Tony:
Exactly. I’ve got you pinned, Ashley, in iMessages now, so you’re up there with Sarah and my groomsman.

Ashley:
I feel so honored. But that’s just because I text you so much. We should do this, let’s do this. Shiny object syndrome. So Tony, what is today’s question?

Tony:
So today’s question also comes from the Real Estate Rookie Facebook group. So again, if you guys are not in that group, make sure you join. It’s one of the most active, one of the most engaged real estate Facebook groups out there. Today’s question comes from Mel Sims, and Mel’s question is, “When working with agents, do your agents help in finding off market deals or do you mainly look for those to send you on market deals?” What’s been your experience, Ashley? What have you seen coming from your agents?

Ashley:
From the agents that I have used, all of them were on market deals that I’ve worked with them, because if I’m going to do an off market deal, it’s probably because I find it myself, but a realtor can help you with an off market deal and they can bring you. You have to find one that’s doing… Maybe there’s some that do direct mail. So I did this shadow day with this commercial broker who did farm land and hunting land, and we went all over and looked at all these huge acreage properties. And what he does is he doesn’t really have people come to him saying, “I want to sell my property.” He does direct mail, markets it to them. So he gets the listing from them and then he puts it on to the MLS. So real estate agents can source their own off market deals that way.
Sometimes it’s called a pocket listing, where the realtor will get the deal and then they’ll tell their investors before they even list it on the MLS. So if you can find a realtor that you can work with that will show you those pocket listings before they’re actually listed, you may have a greater chance of getting the deal. If there is an off market deal and you’re working with an agent, there is a chance that you could ask the seller if they would pay a commission towards the realtor to help you through the process, or you can offer to pay the realtor to do it to either a percentage or a flat fee. One reason I have never gotten my real estate license is because I don’t want to do showings, and I don’t want to do any of the paperwork, create the contract, anything like that. So when I do an off market deal, I actually have my attorney do the paperwork on it and I pay her for that. But you could pay a real estate agent to do that for you too.

Tony:
Yeah. I think you hit on most everything that I’d say as well. The vast majority of agents that I’ve worked with are sending you things that are on market. Now, depending on the situation, like one of the markets that we invest in for short term rentals, there’s a lot of new construction, activity happening in that market. And these builders who are constructing these new homes, they’re builders, they’re not agents, so they work with agents to get these homes sold. And a lot of times what you see is that before these houses get listed on the MLS, the agents will have these pocket listings and they’ll reach out to folks that they know that have the ability to close, they have a relationship with and say, “Hey, this house is going to be done in the next three months.” We have some that won’t be done for another year under contract right now. But we have that relationship and those deals kind of flow to their trusted clients for everybody else. New construction working with folks that way is one way to kind of get some of these off market deals as well.

Ashley:
Yeah, and the advantage of a pocket listing is that maybe you won’t get it for a reduced discount for, say, if you’ve got direct seller or if you got it from a wholesaler, but at least you’ll have the first option of their asking price possibly. So if a realtor is bringing you this listing before it’s on the MLS, hopefully you’re not competing with a thousand people for this property and maybe only a couple people, so that can be the advantage of it.

Tony:
That’s a great point, because maybe you’re not getting it at a discount to what it’s listed for, but at least you’re not bidding against some other people to where it’s been bid up a $100,000, $200,000, something crazy like that. So we’re seeing that in my market, so it’s nice to know that there are some opportunities that I don’t have to fight and scrape for every deal.

Ashley:
Well, I think that kind of sums it up, Tony. Thank you guys for listening to another Rookie Reply. Make sure you join the Facebook group and leave questions for us. You can also leave us a voicemail at 1-888-5-ROOKIE, and we can use it for the Rookie Reply show or we’ll have a guest answer it on our Wednesday show. Thank you guys so much for listening. I’m Ashley, @WealthFromRentals, and he’s Tony @TonyJRobinson on Instagram, and we will see you guys on Wednesday.