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

After a phone conversation, I am "interviewing" my first agent tomorrow. I am a "newbie" but completely motivated. The posts above have a variety of answers, as I would like to go into this "interview" somewhat educated, how does an agent get paid? Having no money I will do assignments at first to build a "war chest". Do I pay the agent out of what I profiting? Does the ultimate buyer write them a check? Does the seller write them a check? Great this topic is going on,as I had specific questions today about that whole process.

As a person just starting out, I have my first interview with an agent tomorrow. Having no money to invest myself, I hope to do a couple of assignments to build a war chest. Who pays my agent? Me? The seller? The buyer I assign the contract to? Who's name will be on the check my agent working on my behalf gets?

This is what I love about forums... hearing so many different opinions and perspectives. When you're this new (like me), you don't know what you don't know and everyone's input is appreciated!

With respect the commission, my goal is to make everyone very happy with whatever deal I do, including the seller, buy, and agent! What I don't understand is what was discussed before about the commission being factored in. If a property lists for $100,000, the agent's commission would be $3000-$6000 depending on if there were two agents or one, right? But if the buyer's actual purchase price is $70,000, would the commission change or would you keep it near the original amount to make it worth it for the agent?

Where did you find that great web site (stop foreclosures)? what a great way to capture leads.

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Hello all,
I'm here, and I'm looking for my 7th agent. I do have one agent, and he's great at finding me long term buy and holds, but he will not do the 25:1 with the reos and motivated sellers that have had price drops. I even explained to him I don't want to waste his time, and simply calling and doing verbal offers to see which ones may entertain it would be fine, and then only write up offers on ones that will look at the offer. But, he said writing up offers is the better route. I used Matts letter to recruit him (and most of the other 5, 1 was a friend) and all started out GREAT, all gung ho, and I let them all know what I was doing upfront. When it came time to actually get going on the offers, things went stale. So, WHAT am I doing WRONG? I thought I'd found a young Elix with this last one. He's definitely good at what he does, so I'll hold onto him for my buy and holds, but how do I find that agent that will do the 25:1s? Even just calling them?

Am I revealing too much information? My current buy-and-hold-for-myself-only agent will only put in offers for assignment if I have my end buyer's POF up front. The problem is, I have several buyers and of course I don't know which one will end up buying it! I know of one person on here that says not to let the agent know when you're planning on assigning a property.

What I've been doing is calling the listing agents myself. I'll find REOs that have been on the market for a very long time, find the agent's name, look them up online, and call them, but this takes so much time because I actually have to find their numbers and it isn't always as easy as it sounds, usually takes several steps and research to find them. Is there a list somewhere that has all the agents and their phone numbers that anyone knows about? Around here, there can be like 25 different Real Estate companies with the exact same name in several cities. Because I don't know which city the agent is in, it takes some time.

This is my whole process from start to finish in finding the agents I currently work with.

I went to realtor.com and looked for agents who had in their profile that they specialize in working with Investors/investments.

I called a total of 27 agents/brokers

When I called I told them up front exactly this.

" Hello My name is blahblahblah and I am looking for an agent who works with investors. I would like to ask you a couple of questions to make sure that we are a good fit for each other before telling you what type of homes I am looking for. Do you have about 5 mins for that? "

" Great! Have you worked with investors before?" if they say yes great move forward.

" Thats great so you are comfortable submitting offers that are anywhere from 30 to 75% off the FMV of the home?" ( this section right here will help you eliminate the ones who will not submit your offers.)

" Awesome! are you familar with double/simitainous closings?" If they tell you yes then you ask them how many they have done?

" Awesome so far it looks like we are a good fit. Let me tell you a little about what I do. I am an investor that works with a list of about 24 cash buyers here locally in ( your state). I am looking to close on at least 4 homes a month with a ratio of 25 offers sent and 1 being accepted. I can sign electronically so paper and time will be saved.

Are you comfortable with this ratio? ( if no then go to the next realtor) if yes great you give them your criteria.

Now there will be realtors that agree to this but then end up not submitting your offers or say they no longer wish to do it. I then write them an email as follows.

"I apologize for the confusion. When we first spoke I has asked some questions to make sure that we were the right fit for each other. To clarify some information I work with a list of cash buyers who I assign properties over to. I do not purchase them, they do. I am mainly working with people who actually own the homes not with banks so the process is different. I also asked if you were comfortable with submitting substantially low offers ranging from 30 to 60% off market value of the homes. So far I have put all properties in this range.

I am looking for an agent who is very familiar with this process which is why I asked if you had worked with investors and also asked if you have done any double or simultaneous closings.

The buyers I work with have personally used this method and recently. To name a few (name of buyer), (name of buyer), ( name of buyer) , and many others. If this is not something you are familiar with and are not comfortable with I can understand and I will continue my search to find someone who does. "

I hope this helps and good luck to all of you. Just don't give up on the first 10 no's and if they ask for proof of funds you tell them when an offer is accepted you will have it for them from your buyer.

HI Everyone, I am also greatful that we are dicussing this issue as to how or how much to pay an agent. I know that when an agent sells a house the get a commission that is already in black and white. I didn't know if they got paid anything else from us for doing the other back office stuff. Also everyone that is on our team are they paid per item that they do for you or do you negotiate a flat rate? Is there some where in print that I could look at to know if I am doing the right thing? Thanks for all the help.

Bertha

Well there are lots of agents out there just as there are a lot of houses out there and the key to it is to find just the right agent, just like finding just the right deal. But when you meet an agent just be truthful with them and tell them what you do, what you are looking for,how you would like for them to help you and how you can help them. because remember it's not all about you. You earn when you help and do things for others. let them know that you may start off small because you work with other investors that may or may not be interested in the properties you bring to them but as your business grows you will be able to buy and sell more properties and that your concern is for them to get paid for there services as well as yourself,And that you don't expect for them to work for free. And that you realize that although some deals may transact where as they don't get paid off of but you will always compensate them for there role in making that deal happen by getting the right deal including a fee for them when you sell. Because remember you make your money when you buy not when you sell.

So the key is to buy right and that's what i mean when I say finding the right deal. but don't be afraid to make mistakes, learn from them and don't just keep making the same one over and over again.

Thank you riches2 you are right it has to be a win,win for everyone or its just not going to work. We all have to work for a living so lets just do the best for each other. Lets just put our selves in the other person's place how would we want to be treated. We can all be happy.

Love thy neighbor.

Thanks,

Bertha

How will you pay for these properties?

challenge them.....
1)Aren't you putting the cart before the horse. I'm wondering if you're going to be able to bring me a deal I'll have to be concerned about paying for

if they have an attitude....
2)You shouldn't concern yourself with how I'm going to pay for the property. You should wonder how you're going to get the listing to sell the property after it has been rehabbed.

The closest i've done to a 25:1 is one time I presented 19 offers and 10 got accepted, but in that case the buyers were te direct buyers and had cash and could close in 5 days or less. Normally I present around 5-6 properties at a time to my investors and if 2 are accepted great.

The best thing I could tell you is to shop around. As you know I have to defend my fellow when people try and bad mouth them, but its for a reason; this is our livelihoods and presenting lowball offers in such a massive quantity can soemtimes be detrimental to our careers, and most aren't going to risk it over someone who doesn't directly have the money. Myself included.

You seem like you don't need an agent anyway. Keep up the good work.

I found a vacant home. I looked the address it up in the tax records and it said; the persons name and next to the name was (ESTATE). I would like to purchase this house,what would I say in the letter? Who would I address it to?

Hello,

I'm a total novice and I'm reading the posts here. I am inclined to inquire about the important relationship between investor and agent.

Firstly, I'd like to say that while going through the 30 days cash bonus (name not exact) We are learning that a real estate agent is an important component for our success in the business of being a real estate investor. However I'd have to say that how to go about establishing this relationship is vague at best. I've given a few of the agents "the homework" one has sent me some listings that he thinks would be great for me. The other has sent me a request to meet with me and asked would I be paying cash for the homes.

Honestly I'm reading here the way others have conducted interviews with agents and being concerned with how they get paid, what their commisions are supposed to be, and I feel as though I handled myself inadequately in my firt few conversations. I have an agent that I was impressed with, and now don't know what to say or do about the lisings that he's sent me. He hasn't sent me the MLS lisings for cash invetors yet, but if he follows through on all of this, what do I do then. I don't want him to get the impression that I'm using him, or don't intend to be serious, but by the same token, I don't really know where I'm going with this. And if and when I will need him.

Also I noted that some one here commented that Elix commented

"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.

I'm curious of what you mean by this. Is this like when individuals actively seek out REO's or Probate deals?

Is any one strictly using these methods like the above mentioned and buying directly from owners? If so do you still need an agent? If so, for what purpose?

I'm sorry this is such a long post. I just have loads of questions, that seem to not be addressed. Dean says don't get ahead of yourself, but it's not really coming all together for me.

Thanks,
Karemah