Assignments and Realtors

Hey there. First off, congrats on getting in the game. If you build it, the checks will come.

So. Realtors:

1. Will I (as the person assigning a property/contract) need a real estate agent in the mix?
If the agent brought the property to your attention or is the listing agent, he is entitled to his commission. Therefore, he's already in the mix.
If you found the property on your own as a "for sale by owner" or you're dealing with a situation where the property isn't listed on the MLS, you don't need to bring in your agent (though I know several people give their realtor 1% anyway, to handle the paperwork and ensure closing goes smoothly. Again, they don't HAVE to. They just don't wanna deal with that stuff and would rather go looking for more deals).

2. What would be his/her role and where's his/her fee coming out of?
Most investors use realtors as one of their sources for finding potential properties. Realtors have access to the MLS (aka the "Multiple Listing Service"), which is the network that ALL realtors use to list properties that they want to put on the market. Like I said above, if the property you're assigning came to your attention through an agent via the MLS, he gets a commission. No worries, though, because the commission always comes out of the seller's pocket. If you're only assigning, that commission will not affect the profit you build into your deal since the seller is responsible for that agent's fee.

Hope this helps.

Thank you for your answers. It's scary & confusing trying to do something new (or maybe I'm just making it scary & confusing). I really appreciate your input. Your knowledge and experience are of great help to newbies like me.

Thanks again.

~Martha

Martha, thank you for asking that question. I also wondered about the Real Estate Agent's role as well.

Shine: I have a question. So if a property is on the MLS, how does that work? you have to contact the listing agent in order to get in touch with the seller. Then do you ask the seller if you can do an Assignment of Contract with them? does that not conflict with the Listing agreement they have with their realtor? like you are cutting in for the commission? So if they are listing the property on the MLS for say $150,000 then do you ask the seller if you can bring in a Buyer for $160,000 to make your share of the profit? If that is the case, then what buyer would pay $10,000 over the listing price to you when they can just go directly to the listing agent themselves once they find out where the property is located?

Very confusing to me as well. I just need to understand this process. Thank you for any help you can provide.

Beth

Shine,
Another question popped up in my head regarding RE agents and assignments. If the person to whom I assign the contract also has a RE agent, that's 3 agents in the mix (the seller's agent, my agent, & buyer's agent). How do I ensure that my agent gets his/her cut, and where does that portion come from? Thank you in advance for your help.

~Martha

Sounds like a great name for a blues band!!!

That is a super question. I am probably as new if not more so but I am ""guessing"" .......

Seller is responsible for paying the fees.
You take care of your agent on your own.

With that said....I remember reading an example like this in the "Be a Real Estate Millionaire". i will have to go back and see if I can find it for you an get back to you with it.

If you get the real answer first, please PM me on it.

Most excellent and relevant question.

Thanks,
Dave

95% of successful contract assignments are when you get a wholesale deal and pass it off to one of your investor/buyers. Assigning a contract to an owner/occupant is rare indeed. So most of the time, successful assignments ACTUALLY HAPPEN when you have gotten a contract directly with a motivated seller. One that IS NOT listed on the MLS. NO agents involved when you get the property under contract, NO agents involved when you assign your KILLER deal to a fellow investor/rehhaber/landlord. NO AGENTS NEEDED AT ALL!!
This requires MASSIVE marketing for motivated sellers where ever you can find them. It requires you to have a list of actual CASH buyers. It requires you to be able to find, evaluate and present your REAL deal to your buyer.

Why assignments don't work with owner occupants? It might if they pay cash.
Most have to get financing. That can be 30 to 60 days after the contract is signed. Inspection, appraisal and financing all need to be done and approved. How long do you have to close on your contract? 60 days? NOT!! Another reason is if the property will go to an owner/occupant(move in ready), why would they discount it so you can sell it to the same owner/occupant? Assignments WORK great, I do a lot of them. It just has to be the right seller, property and buyer! I have NEVER used an agent to do a contract assignment. I know some people assign contracts using agents on MLS listed properties but I have never had reason to. I double close REOs using an agent because I have no choice! These are the properties I ask my agents to supply me with. When I flip them, I flip them to the same type of buyers, rehhabers and landlords of the same buyers list. I close my deal with a realtor but sell to my buyer with out a realtor. The only time I use a realtor to SELL one of my properties is when we do the rehab ourselves and then sell our fixed up property retail on the MLS. But this is a property we have financed ourselves and fixed it up and then sell it. We OWN this property and have closed on the property in my name. We usually have the properties from 90 to 120 days to complete the work and get them sold. We use a realtor for sure when we sell to the owner/occupant.

Hope this helps!

Michael Mangham
MD Home Acquisitions LLC

Michael Mangham
MD Home Acquisitions LLC

OK, if the property is on the MLS then you automatically know there is an agent involved, called a "seller's agent". When a buyer comes along who is interested in the property they MUST go through the seller's agent aka: the "listing agent" (same thing). It is the buyer's perogative to either have or not have their own agent, the "buyer's agent". In any case, whether you're an investor or not, it is customary for the seller to pay the RE agent's fee at closing. And if there are 2 agents involved there is an understood split of that fee (it has nothing to do with you) the agents will take care of this between themselves. If you chose to "take care" of your agent on the side, that is your choice. And if your agent asks for more on the side....my opinion would be to talk to another agent.

Thanks for everyone's input. Things that seem so obvious to the veterans can easily confuse the newbies. This is a great place to find help from the experienced investors. Thanks again.

~Martha

Hey MarthaG and bethkarate,
Sorry for being MIA.
For some reason, I thought that if someone responds to a thread that I comment in, I would automatically be notified.

I actually stumbled back in here and realized that I'd left you guys hanging for the last week and a half hahaha. Whoops. Looks like the community pitched and got you the answers that you were looking for.

By all means, ask away. Soak it up and share the abundance that will surely come our way.

Assignments, as was explained could be done without the agent if you didnt get the property from him and you have the motivated seller and a end buyer in place to assign that signed contract to.HOPE this helps.

I have an additional question regarding straight assignments. Are most investors willing to pay you the assignment fee at the point they sign the assignment contract, then you are done with the transaction and they take it from there? Or do you find that you have to wait for your assignment fee at closing? I've read that this can occur both ways. Just wondering what the seasoned investor has experienced.

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