What to say to Agents when asked, "How will you pay for these homes?"

Well, I'm new at this to but, what i am hearing and reading about all this is . If youn have your buyers list started you should be able to say. "I don't only buy for myself, I have several other invester I deal with so if it don't fit for me at the moment I will send it to one or more of them to see if it fits what their looking for. I can't buy them all" or smething to that effect. Listen I am new to this to so take with a grain of salt.

I may choose to assign my interest in the contract to a cash buyer if it's not right for me at the time?
Let us know what you decide because I'm sure the rest of us newbies are wondering too.
Lauri

Excellent answer. Real estate agents, bird-dogs or whomever you have, really are asking the question "Am I just spinning my wheels with you?". They need to know it may be worth their effort in finding you deals.

So, yes, "and it is true also", that you represent yourself (as an investor), and a group of other investors (any buyers you find). And, even if you had a ton of cash in the bank, you still only buy the deals that fit a specific criteria. So not all deals ever get accepted anyway.

This satisfies your ability to purchase, so, the agent is satisfied with value of looking for deals for you. Everybody's happy.

Your response is right on. I believe that is actually what Matt might have said at one point,(sounds familiar) and if not him it was some other knowledgable source. It makes sense and it is clear and honest with the Agent. Off to the races..
Thanks
(sometimes one just needs to be reminded of all the key points in being successful, its hard to remember them all!)

-Marc

I was turned down by all agents but one. They turned me down because to work with me they would have to work hard, it would be a huge challenge and they would have to step out of their comfort zone.

Agents are trained to put homes on the mls list, show homes and fill out paper work. In today's market they hardly make any sale at all, but when they do there are no surprises.

If they work for us, they have to work ten times as hard and any deal can fall thru at any time. Of course, they would make tons of money, but they prefer to make less and be comfortable.

Tell the agent what you are trying to do and if they are into it, you got a winner. If they turn you down, it' s their loss. You are giving them the opportunity of a lifetime, to make more money than any agent makes.

Hope this helps!

Sorry if this is a dumb question, but I'm new and not sure how it all works yet.

If an agent gets on board with you, does he/she get involved in the sales if you are assigning it to another cash buyer? Will their comission be factored into the buyers contract, or do you pay her separately?

I am new as well, but I am sure that if they had any part in the deal then you pay them out of your earnings. Like if they brought you the buyer/seller, they would deserve something!

Agents naturally deserve to get paid for their efforts.

How they get paid is up to you.

For any deal: You take your purchase price, add an amount you want for profit, then also add the agent's commission (negotiable amount) and any other costs you need to cover. This gives you your selling price to the assigned buyer. The agent will ofcourse need to see this written into any purchase agreements, in order to be comfortable.

If your deal isn't supper killer right off the bat, then once you add everything up, if you find your selling price is not so appealing, then you could decide to cut your profit a bit. Otherwise, don't take it out of your pocket, and don't screw the agent. They can make you tons of money.

Thank you Dennis, that is very helpful.

wwho do I talk to have my counties reset.

I've been asked,and my answer was OPM,but I still have yet to do a deal but my agent was ok with that answer, but she did say that their were some things that had to happen if that is the case if I'm buying HUD because at that time I was looking at a HUD house.for instince their name would have to be on the paperwork unless I first get money and then deposit it in my account.That's for OPM like family and friends.Any comments on that,does that make sense? Was she correct or should I enquire more.

If the property is listed, a commission rate is already in place by the listing agent; if he/she finds it for you, they know their commission before they bring it to your attention. 9 out of 10 times, they're making more than you on the deal.

the seller's pays your agent's commission. Your agent gets half and the listing agent the other half. Like Elix said it is established already when it is listed. If there is no second agent the listing agent gets full commission.

Besides the responses listed above I tell them not to worry, if they can find the deals that fit my criteria they will have all the money they need to close! After all, I am interviewing them, they will work for me and I will make them money. Also, I don't waste their time by making multiple offers on properties that would never go to an investor. I only make multiple offers on
distressed REOs and to motivated sellers. Most motivated sellers I don't find on the MLS anyway! So don't "pray and spray" a bunch of offers that won't get accepted anyway, this will cost the loss of more realtors than anything else. If you offer on properties that you actually have a chance of getting, your realtor will see you know what you are doing and stick with you. (just my opinion)

Michael Mangham
MD Home Acquisitions LLC

Mike I don't know if you have a cult out there, but a potential client I had come into contact with a few weeks said close to the same thing you said in the first sentence. We were introduced thru a mutual and I let him know "I normally don't deal w wholesalers because I have my own investors in NYC that I deal with having to wait for them to find a buyer to me makes no sense, but i'll make an exception since we both know Brian" I asked how long he's been doing this

His exact words were "don't concern yourself with all of that. Just worry about finding me houses."

I let him talk

"at this point, you work for me, so tomorrow i'll contact you with my criteria for the type of deals i'm looking for and you'll get your money. Plus, since i'm going to make you alot of money, I think its only fair you take less of a normal commission since i'll be bringing you lots more deals then you're probably used to..."

I just started laughing at that point. Suffice to say, I haven't even bothered to return his calls. Our friend told him what I can do and I got a 4 paragraph apology two days afterwards.

Back to this, the second paragraph I 1000000000000000% agree with.

Why you don't ask all this question to Matt?
He is on dean website right now
Good luck

Hi everyone, after the call last night I faxed matt's letter from the book to dozens of re/max and Keller & Williams real estate offices in the phildelphia area, when I woke up this morning my phone was ring with real estate agents on the other end! Some were a yes, some were a no, and some were a maybe, but the strategy works so use it!
Thanks Matt Larson.
www.wesalehomesphillydelco.com
www.stopforclosureinphillydelco.com

Ok, I feel better about the agents commission already factored in. I wasn't sure if this was something completely different where you'd have to pay them separately.

jiz, that's awesome, which book is that? I tried to write it as fast as he spoke last night, but missed a few lines.

Like Matt said "the best agent is one who doesn't mind putting in low offers simply to close deals constantly."

One important question I may add to all of this is and I may have oversighted in my reading about it is when you find that star agent and they've agreed to your strategy, are you able to lock that contract up to find your right buyer for the amount of days (14-30) to do your thing??? How does this work exactly? I'm still a little cloudy on that and I'm sure I speak on others behalfs. Some good clarification would be appreciated so I can move forward with 100% confidence in my approach. I hope this isn't a $5,000.00 question I need to pay towards the success academy class to get the response I need RESPOND......RESPOND.......RESPOND...

I would never try and cut a realtors commission that works with me! So I don't blame you for laughing at that guy. If someone asks me how long I have been doing this I will gladly tell them. The guy sounded pretty rude. I just think when interviewing a potential realtor that I am doing the interview at first. I also ask them how many deals they have provided for their investors and what percentage the investors usually make. When I make these statements I do so in an assertive manner without an arrogant attitude. If things are the same on both sides I will gladly provide any info requested. Alot of realtors only know how to get a listing agreement, list the property on the MLS, put a sign in the yard and collect their commission. I wish I had someone like you in Colorado!

Always enjoy your real world posts!
Michael Mangham
MD Home Acquisitions LLC

The book is profit from real estate right now, and the letter is in part 2, chapter 6, on pages 114 and 115!
Good luck! BobbyMac n Debbie
www.wesalehomesphillydelco.com
www.stopforclosureinphillydelco.com

Good post...I was on the call last night too..are you refering to the questions you ask when looking for a realtor? I am new at this and just started today calling on realtors...no luck the ones I spoke to at Keller were asking what do I plan on doing with these propereties...i responded buy/fix/sell. Can you send me the letter you faxed..please...thanks. rover88

Elix

Not wrong. Everything is negotiable under the right circumstances. As to my previous explaination, I was referring to an overall illustration. I wasn't trying to suggest the use of commission cutting. I was pointing out the possible negotiating area, should the absolute need arise, in a make or break senario. (i.e., if a deal would die for a small amount of money, the agent may choose to cut 1/2% towards balancing the numbers. Obviously, it still has to be an acceptable win-win for all.)

[/quote]
The agent is going to get paid and you really have nothing to do with the amount

If the property is listed, a commission rate is already in place by the listing agent; if he/she finds it for you, they know their commission before they bring it to your attention. 9 out of 10 times, they're making more than you on the deal.[/quote]

Hi, everyone! This is a very interesting line of posts; I read every line, but this caught my attention: "9 out of 10 times, they're making more than you on the deal."

My questions are as follow: If I will be needing an agent so much, and I have the opportunity to become an agent, should I become one? Are they allowed to work in the manner that most of us would?? I'm sure that they pay some kind of commission or fee to the broker of the agency that they work for, but how free are they to work like we do? Would it be a benefit or a hindrance?

Thank you all for your attention and participation. I certainly appreciate this enlightenment at the start of my day!

God bless!

Not solely at you Anja, but since you said it, you are included in this. Not sure how long you've been in the biz, but the comments you posted are the atypical of those who haven't been involved very long, have yet to close a deal, and seem to think that doing a step by step, word for word, resemblance of anothers will lead to success. That is farthest from the truth.

I respect everyone's hustle. I might not completely with the methods or can admit when certain things don't work for me, but I respect it nonetheless and have said that what might work for one might not necessarily work for others. Case in point;
1. I prefer the method of getting a deal before buyers. It has worked for me and that is why I endorse it. Not saying the other way is wrong, but I do what has worked for me.
2. I, as an agent, totally refuse to present multiple low ball offers with the hope that 1 out of 25 will be accepted. I have refused to clients I had, and lost some and others respected my opinion and most have lead to successful closings, others not. My reasons as I stated are that I cannot afford to be blackballed or kept from deals that come along from my colleagues whom I have created a sense of trust and professionalism over the years. Clients come and go, but connects are forever

If you think what you wrote about agents is all we do, it completely shows you have no idea at all what you speak of; not sure about other markets, but the agents that I know of and converse with nationwide are doing very well, in both tradional residential and investment based sales. Like I said before, for the most part what most have are choices. The choice to either work with someone who has experience or not, to chose whether they feel its a waste of their time or not.

Define 'work ten times as hard' and exactly how would you guarantee them this ton of money??? And to stereotype that they prefer to make less and be comfortable speaks more of the lack of exposure in the RE world than it does of actual facts.

The last paragraph speaks of the misguided enthusiasm that most newbies have. While its commendable, it is in fact misguided to think that you yourself are the savior to any agent/broker that deals with you. As if their financial being were in shambles and you saved them.

At the very core, what needs to be had is respect. Respect for this business. Respect of others who do this for a living or are attempting to. Alot of times, what you says alot and at the same time says nothing.

There is no right or wrong way to pay your agent,sometimes they will leave
the commish in the deal to get it closed,if they trust you,and you ASK.
No deal is the same,thats why this is called creative REI.You and the agent
are a team,and you both need each other.I didn't use a agent on my first 3
deals,it is hard to find one who knows R.E. The Realtors Assoc reports that
most years 64% of prop on the MLS never get a single offer,my only bad deal
was listed with a Realtor.When you find a good one , try to keep them.

Mel Tate

Alesia,

send an email to support at www.ede10@nmrdirect.com

Valerie