How to Find A REALTOR(R) Willing To Work Cheap.......Or Not!

By
Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690
https://activerain.com/droplet/4wcn

florida foreclosure

Hi folks. I received the following email earlier today. I'm sure with prices so low and agents being so busy that this is a very common occurrence. I was getting ready to write him a long winded email and then remembered....I have a blog article that will help him!!!

This is one of the advantages of having a blog full of helpful info. Instead of writing long emails we can just link folks to our articles. So here goes

  • I have had the hardest time getting a reply from a Realtor about what I m interested in buying. I saw a mobile home between $10,000 and $20,000. in Winter Haven. I'm very interested but don't get replies. Have had numerous houses in the past and believe most realtors wont bother with low commission houses. Would appreciate an honest, enthusiastic Realtor that doesn't have a $ sign as their first criteria. Thanks, Bernard

BUYING CHEAP REAL ESTATE IN TODAY'S MARKET. A REALITY CHECK

Here's one reason why a BBA (Buyer Broker Agreement) should be important to the Buyer. In fact, it's my opinion, that a BBA is MORE important to the Buyer than it is to the REALTOR® and here‘s why. 

  • (I expect I'll get all the usual responses about "My clients would NEVER buy a house behind my back" and "The commission doesn't matter to me". If you believe these things to be true this post may not be for you OR maybe it's EXACTLY for you!)

I spoke with a Buyer, earlier this week, who has cash and is ready to buy. It seems he has been trying to find an agent to assist him but everyone is too busy. Of course, after reading how slow the market is, he finds this hard to believe. So being the good little Broker that I am I explained it to him. 

His problem is....he is looking to purchase a deal, a foreclosure, a cheap rental property. And he should. There are some good properties that he can purchase for less than $50,000. As an Investor, these properties are the ones he SHOULD be buying. The only issue is the prices are so low, that the co-brokes (commissions being offered to sell the property) aren't worth the time involved in helping him find the right property. So he gets placed on the back burner. We may help him.....but only when we get some extra time. 

In fact, I have the same problem. He wanted me to go look at a property before he made an offer and I said I would......tomorrow. Today I was busy doing other things......that have a higher return. 

The reality is I can't afford to spend hours previewing cheap foreclosures that he may or may not be able to, or want to, purchase. 

This is where the BBA comes in. If a Buyer is truly wanting to get a deal, in the very low price ranges, then it is to his advantage to give his Broker/agent an incentive to put in the time. Maybe he'll have to chip in $1,000 or so to meet the minimum compensation outlined in the agreement but surely, by agreeing to this, he'll get better service and therefore a better deal on a property. 

I have always been a firm believer in getting the commission out of the equation right up front. The best way to do this is to get a BBA signed. Unless of course you like working for peanuts. I don't. And won't. My Buyers deserve better than that. Do yours? 

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Topic:
Home Buying
Location:
Florida Osceola County Kissimmee Poinciana
Groups:
Real Estate Rookie
Tags:
foreclosure
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buyer broker agreements

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Ambassador
1,973,789
Fernando Herboso - Broker for Maxus Realty Group
Maxus Realty Group - Broker 301-246-0001 - Gaithersburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

My loan officer got fired this week and doesn't know it yet. . I wanted him to help me help people that are credit challenged and start a campaign with a group of them. . 

He told me its not enough money. . that we shouldn't bother.. 

I said these are seeds for business in the next few years for us. . when no one else is helping them. .we are .

Has anyone experienced the power of gratitude from a client when they couldn't find anyone else out there. . that is a powerful weapon for any business. .

 

Nov 08, 2010 11:29 PM #23
Rainmaker
902,176
Kay Van Kampen
RE/MAX Broker, RE/MAX - Springfield, MO
Realtor®, Springfield Mo Real Estate

I am being stalked by people wanting rentals.  They want me to check on every house that has been on the market for a long time to see if they want to rent.  My time is better spent on real ready willing and able buyers wanting to buy. 

If the renter wants a higher priced home and has money to put towards a lease purchase or owner finance, that's a different story.

Nov 08, 2010 11:57 PM #24
Rainmaker
1,519,823
Brian Madigan
RE/MAX West Realty Inc., Brokerage (Toronto) - Toronto, ON
LL.B., Broker

Bryant,

That makes good sense. I'm sure he doesn't have unrealistic expectations of other professionals.

Brian

Nov 09, 2010 12:16 AM #25
Anonymous
Jeanne Gregory, RE/MAX Southwest, Sugar Land, TX

 I agree with Fernando.  My best lead ever came from a $750 lease.  Two years after I put my client in the lease property, he moved to Louisiana and was working with a company moving 60 families to Houston.  He called and asked if I wanted the business.  That was 14 years ago.  I'm now selling homes to the children of those clients.  If the buyer is ready, willing, able, reasonable in his search and will sign the buyer rep agreement, we're good to go. 

Nov 09, 2010 01:06 AM #26
Rainmaker
160,014
MeLisa Minter, Realtor
Minter Real Estate Services - Taylor Lake Village, TX
Bay Area Houston Real Estate Agent

I had a "wholesale investor" that I worked with for about six weeks.  And the offers that they were submitting was insulting to say the least and therefore, were not accepted by the sellers.

We did this about five times and after that, I made an executive decision to start charging a transaction fee for every contract I wrote up and submitted. 

You're right Bryant when you say that "if there is some sort of incentive," then these buyers would receive better service.  It takes time to write up contracts, fax or email them to the listing agent.  Talk with the agent, the title company.....blah, blah, blah, all for $800.  It's simply not worth it!

Nov 09, 2010 02:01 AM #27
Rainmaker
1,011,950
Corinne Guest
Corinne Guest, REALTOR® | Barrington Realty Company - Barrington, IL
Barrington Lifestyles

I do think clients sometimes forget that not all the commission is spending money. That we have mortgages, food, car loans like everyone else and so sometimes do have to set personal minimums. A BBA would certainly solve this but I really wonder how many will pony up the cash. I doubt many. But hey, thanks for the idea, I'll be honest and say I had not thought of this and will now be integrating it.

Nov 09, 2010 02:09 AM #28
Rainmaker
1,022,671
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

With many of my low end buyers, I actually have my assistant do a lot of the upfront work and research on these.  And then I step in just to do the showing and the paperwork.  Just too much effort to earn a $1000 commission after making offers on 8 or 9 houses. 

Nov 09, 2010 02:29 AM #29
Rainmaker
164,684
Home Design
Alpharetta, GA
Home Design and Real Estate

Great Post Bryant, I agree with my fellow Atlanta agent Tim Maitski. Unfortunately this type of buyer is probably the most demanding of them all.  And don't bother asking them for a buyer brokerage with a minimum commission.......they will never sign it. 

Nov 09, 2010 02:40 AM #30
Rainmaker
150,096
Michael J. Gallo
Florida Luxury Realty - New Port Richey, FL
Florida Luxury Realty - Gulf Home Sales Team

The Best Ideas are always so simple.  You Rock!!

Nov 09, 2010 03:35 AM #31
Rainer
137,004
Brent & Deb Wells
LivingWell Properties - Prosper, TX
Prosper TX

Bryant,

Good post, but whomever stated that these small investor deals can lead to a cash crop is correct. Cultivate them, its time well spent, but if they won't sign and exclusive then pass on them. We have to be very careful with our time and not to waste it.

-Brent

Nov 09, 2010 03:46 AM #32
Rainer
88,302
Michael Simcock
Coldwell Banker (Elk Grove, CA) - Elk Grove, CA
Elk Grove, CA Realtor 916 425-1084

Great idea. We all need to watch our business so we can stay in it. Prices have not come down to that level where I would need to have a buyer kick in to pay me....yet. We will see where this market takes us.

Nov 09, 2010 04:27 AM #33
Rainmaker
490,543
Lorraine or Loretta Kratz
Crescent Moon Realty, Inc. & Land N Sea Auctions. - San Marcos, CA
Certified Negotiation Consultants

How often does an agent try to walk and kick themselves at the same time, because they have invested time in a buyer/seller that did not result in compensation, it cost them time, money & impacted there self esteem.

Having a BBA is essential but I have found that agents are either timid or so willing to work for free that the public as a skewed perception of the value of an agents services --- there is an old saying that goes why buy the cow when the milk is free.

Nov 09, 2010 08:04 AM #34
Rainmaker
84,728
Simon Mills
Mills Realty - Toluca Lake, CA

What ever form you want to use as a buyer's agent you need to set your expectations early in the relationship.  When I have this type of investors I give them 2 weeks to get a property into escrow or I stop working with them.  I let them know upfront what my expectations are and if they are not met then I will not work with them.

Nov 09, 2010 08:10 AM #35
Rainmaker
565,568
Mike Saunders
Lanier Partners - Athens, GA

BB - terrific strategy, but has to be carefully and knowledgeably presented. I like it!

Nov 09, 2010 08:59 AM #36
Rainmaker
52,243
Mike Weber
Keller Williams Realty Northern Colorado - Fort Collins, CO
40+ years in Northern Colorado

I have not had to use a minumin compensation with my buyers, yet, but have been tempted when selling rural land.  On the other side of the equation, I have let sellers know that it may be in their best interest to offer a higher co-broker commission to a buyer representative in order to have the buyer broker feel it is worthwhile to show the buyer the property and to even write an offer.

Nov 09, 2010 10:22 AM #37
Ambassador
2,008,627
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

I think this way of doing things makes sense to both parties, and where a buyer is getting a great deal but no service, it makes sense to pay for that service.

Nov 09, 2010 01:08 PM #38
Ambassador
557,018
"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

Yo Dude...

Why am I not parked? What oh what is your problem? :)

Let's go over it again. Post in draft. Park TLW. Post blog entry. Don't make me explain this again :)

TLW...ROAR!

Nov 10, 2010 09:28 AM #39
Rainmaker
182,040
Sara Bonert
Zillow - Atlanta, GA
Real Estate Internet Marketing

Interesting post!  The first home I ever bought was a condo conversion project.  My agent didn't make me sign a buyer's agreement.  She worked her tail off showing me properties (typical first time buyer, I had to see everything...).  We were finally to the point to write a contract, I had the unit number picked, then I got a call from the company representing the builder.  Buy direct and they've give me $3000.  $3000 is a lot of money to a first time home buyer!  But there was no way I was taking the bait!  However, I shudder to think how many people wouldn't do the same - moral of the story - buyer's agreement!

Nov 11, 2010 01:21 AM #40
Rainmaker
414,607
Tni LeBlanc, Realtor®, J.D.
Mint Properties, Lic. #01871795 - Santa Maria, CA
Tenacious Tni (805) 878-9879

Good point.  I hadn't thought about that perspective but it is true.  There are some inquiries that I can't even respond to because the price point is so low.  They take the same amount of time and without a guarantee of loyalty, you can actually lose money by pursuing them. . .

Nov 16, 2010 04:10 PM #41
Rainmaker
1,490,694
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

I have many calls/emails from the 'cash deal hunters'. They do know care who would be their realtor, but who will bring a deal 60c/1$ to flip and make fast money. There is no loyalty there and no BBA.

Jan 14, 2014 04:48 PM #42
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