Is Working This Way With Your RE Agent Possible?

[Nir]

Hi,
I believe as a RE investor, working with your RE agent as a team would be much more efficient. by "as a team" I mean working with your agent AS IF BOTH you and your RE agents are RE agents and investor partners representing yourselves!

In other words, both of you can communicate with the seller or his agent on anything.

The reason I believe it would be much more efficient is if one of you is not available, the other can work on the same thing. For example, getting more info on the property, tenants, etc. literally within hours instead of within days! – this is the biggest advantage in my opinion

I think it is usually not working this way because the RE agent is either:

- worried if he is not involved in the deal enough, the investor will "fire him"/not award the business to him. they do not always have you sign a buyer representation agreement, and even if they do they do not think they can rely on that if they feel they do nothing to help you(?)

OR/AND

Worried that you communicating with the seller or his/her agent will kill the deal or ruin their reputation, cause legal issues, etc.(?)

Still, I have no doubt that at least in my case, it could work GREAT for both of us. However, not sure how to communicate that to agents and if it is reasonable to expect an agent to work this way with me(?)

Thoughts? Anyone working this way with his/her agent?

THANKS & REGARDS,
Neil
PS. the source of my dilemma and idea above is I represented myself in a deal in the past. It had huge advantages specifically no other investor with an agent can compete with your responsiveness and motivation level that is only "communicated" through another person when being represented. However, there are also advantages to working with an agent which is why I am suggesting the hybrid structure above.

 

[Lucas]

Hi Neil,
Your agent SHOULD be responding within hours unless thsy let you know that they were on holidays or something.

If you are a serious buyer there should be a HIGH level of motivation on the part of your realtor.

The only thing that ever holds me back from an almost instantaneous answer is the listing agent (or other agent...depending on the situation).

Lucas

QUOTE (investmart @ Jan 24 2010, 12:21 AM) Hi,

I believe as a RE investor, working with your RE agent as a team would be much more efficient. by "as a team" I mean working with your agent AS IF BOTH you and your RE agents are RE agents and investor partners representing yourselves!

In other words, both of you can communicate with the seller or his agent on anything.

The reason I believe it would be much more efficient is if one of you is not available, the other can work on the same thing. For example, getting more info on the property, tenants, etc. literally within hours instead of within days! – this is the biggest advantage in my opinion

I think it is usually not working this way because the RE agent is either:

- worried if he is not involved in the deal enough, the investor will "fire him"/not award the business to him. they do not always have you sign a buyer representation agreement, and even if they do they do not think they can rely on that if they feel they do nothing to help you(?)

OR/AND

Worried that you communicating with the seller or his/her agent will kill the deal or ruin their reputation, cause legal issues, etc.(?)

Still, I have no doubt that at least in my case, it could work GREAT for both of us. However, not sure how to communicate that to agents and if it is reasonable to expect an agent to work this way with me(?)

Thoughts? Anyone working this way with his/her agent?

THANKS & REGARDS,
Neil
PS. the source of my dilemma and idea above is I represented myself in a deal in the past. It had huge advantages specifically no other investor with an agent can compete with your responsiveness and motivation level that is only "communicated" through another person when being represented. However, there are also advantages to working with an agent which is why I am suggesting the hybrid structure above.

 

[Nir]

QUOTE (Lucas @ Jan 24 2010, 12:03 AM) Hi Neil,

Your agent SHOULD be responding within hours unless thsy let you know that they were on holidays or something.

If you are a serious buyer there should be a HIGH level of motivation on the part of your realtor.

The only thing that ever holds me back from an almost instantaneous answer is the listing agent (or other agent...depending on the situation).

Lucas
Good points Lucas! can you also answer some of the questions:

would you agree to work with an investor this way?

is it reasonable to expect an agent to work with me this way?

correct, agent`s motivation is often high but not as high as mine.

Thanks.

 

[tahani]

HELLO NEIL. GREAT QUESTION AND THE ANSWER IS TYPED IN CAPITAL LETTERS BESIDE YOUR POINTS BELOW.

QUOTE (investmart @ Jan 24 2010, 01:21 AM) Hi,

I believe as a RE investor, working with your RE agent as a team would be much more efficient. by "as a team" I mean working with your agent AS IF BOTH you and your RE agents are RE agents and investor partners representing yourselves!
YES AN AGENT IS AN IMPORTANT PART OF THE TEAM
In other words, both of you can communicate with the seller or his agent on anything. THIS CAN HAPPEN TO A SMALL DEGREE WHILE YOUR AGENT IS PRESENT

The reason I believe it would be much more efficient is if one of you is not available, the other can work on the same thing. For example, getting more info on the property, tenants, etc. literally within hours instead of within days! – this is the biggest advantage in my opinion

HERE IS THE THING NEIL . SELLERS HIRE AGENTS SO THEY ARE REPRESENTED BY US(AGENTS) WE GET TO KNOW THE PROPERTY AND THE WHAT IS INVOLVED AND WE TELL OTHER AGENTS/ PUBLIC ABOUT THE HOUSE AND THE SELLER GOES ON WITH THIER LIFE. IF THE SELLER WANTS TO DO THAT HE OR SHE WILL SELL PRIVATELY.

I think it is usually not working this way because the RE agent is either:

- worried if he is not involved in the deal enough, the investor will "fire him"/not award the business to him. they do not always have you sign a buyer representation agreement, and even if they do they do not think they can rely on that if they feel they do nothing to help you(?)

IN THIS CASE THERE IS NOT ENOUGH TRUST BETWEEN THE TWO PARTIES. THE RELATIONSHIP IS NOT SOLID AND IT HARDLY EVER THE CASE.

OR/AND

Worried that you communicating with the seller or his/her agent will kill the deal or ruin their reputation, cause legal issues, etc.(?)

YES THIS ONE IS LIKELY FOR SURE. DID YOU KNOW THAT IF YOU CALL AND ASK WHAT IS THE PRICE OF A HOUSE AND MY ASSISTANT KNOWS THAT, LEGALLY SHE IS NOT TO TELL YOU THE PRICE. SHE IS NOT LICENSED. THIS IS FOR SURE SOMETHING ILLEGAL. ONLY LICENSED AGENTS CAN ANSWER QUESTIONS ABOUT THE PROPERTY.

THE OTHER POINT I WANT TO MAKE IS AGENTS ARE SUPPOSE TO RETURN CALLS SOON AS THEY CAN AND MAX WITHIN 24HOURS . THIS POINT SHOULD BE COMMUNICATED AT FIRST MEETING. WHAT IS THE EXPECTED TIME FOR AGENT TO RETURN EMAILS OR CALLS TO INVESTORS SO THERE IS NO FRUSTRATIONS WHEN FEW HOURS PASS BY AND THE INVESTOR STILL DOES NOT HAVE AN ANSWER. JUST REMEMBER WE HAVE MORE THAN ONE CLIENT TO ATTEND TO.
THE OTHER POINT IS IF YOUR AGENT IS NOT ADDING VALUE TO YOU THEN YOU MAY HAVE HIRED THE WRONG AGENT. THE RELATIONSHIP HAS TO BE WIN/WIN TO BOTH AND THE TRUST HAS TO BE THERE.
LAST THING IS IF I GO AWAY THERE IS ALWAYS ANOTHER AGENT HELPING ME AND TAKING CARE OF MY CLIENTS/CALLS
BUT IT SHOULD NOT BE YOUR RESPONSIBILITY TO DO ALL THE WORK.

Still, I have no doubt that at least in my case, it could work GREAT for both of us. However, not sure how to communicate that to agents and if it is reasonable to expect an agent to work this way with me(?)

HAVE YOU TALKED ABOUT THIS WITH YOUR AGENT AND WHAT DID HE/SHE SAY???????????

Thoughts? Anyone working this way with his/her agent? HOPE THIS HELPS AND IF NOT LET ME KNOW. I CANT ANSWER MORE QUESTIONS IF YOU LIKE.

PS YOU CAN LISTEN TO MY INTERVIEW WITH RUSSELL IN THE DOWNLOAD SECTION. (ABOUT INVESTOR/AGENT RELATIONSHIP
.

THANKS & REGARDS,
Neil
PS. the source of my dilemma and idea above is I represented myself in a deal in the past. It had huge advantages specifically no other investor with an agent can compete with your responsiveness and motivation level that is only "communicated" through another person when being represented. However, there are also advantages to working with an agent which is why I am suggesting the hybrid structure above.

JUST REMEMBER YOUR A SAVVY INVESTOR AND NOT ALL CLIENTS ARE LIKE YOU.

 

[RedlineBrett]

If I am a seller`s agent I won`t speak with the buyer... only the buyer`s agent. I do not want to inadvertently create a dual agency situation and expose myself to the liability of such a scenario without having consent from both sides.

So I would either work my client and ONLY you, or ONLY your agent... but never both. And if you weren`t using an agent I`d have you sign off on that at contract time.

Your agent has the license and carries the liability for acting professionally in that capacity. If you aren`t happy either get another agent... or get licensed yourself!

 

[Nir]

QUOTE (RedlineBrett @ Jan 24 2010, 03:12 PM) If I am a seller`s agent I won`t speak with the buyer... only the buyer`s agent. I do not want to inadvertently create a dual agency situation and expose myself to the liability of such a scenario without having consent from both sides.

So I would either work my client and ONLY you, or ONLY your agent... but never both. And if you weren`t using an agent I`d have you sign off on that at contract time.

Your agent has the license and carries the liability for acting professionally in that capacity. If you aren`t happy either get another agent... or get licensed yourself!


Thanks Brett, great input. it`s not that I`m not happy, it`s that two are better than one!

 

[Lucas]

Hi Neil,Pls see answers below...in BOLD


QUOTE (investmart @ Jan 24 2010, 01:40 PM) Good points Lucas! can you also answer some of the questions:

would you agree to work with an investor this way?

I would hesitiate to work with a client that was approaching Realtors not only from a liability perspective but from a negotiating perspective as well. I have taken courses solely on negotiating as have many of my collegues. I would not want my client saying or doing something that would compromise their leverage. Not too mention, it often rubs the listing agfents the wrong way when they spend time with someone who is already represented...which also affects your negotiating leverage.

is it reasonable to expect an agent to work with me this way?

"Reasonable" is a subjective word...this is a detail that should be discussed btw yourself and your agent. Often, I have clients that find stuff on their own but they forward the info onto me to do the dirty work...and as I said, if I know the buyer is serious I am ALL OVER IT!!! I would argue motivation as I use the commission earned to feed my family!!

correct, agent`s motivation is often high but not as high as mine.

Thanks.

 

[invst4profit]

Speaking personally, since I am not an agent, my preference, most times, is to work directly with the sellers agent and in doing so sign the paperwork to have them represent me. Agent is that of buyer and seller. Communications between seller and buyer can be remarkably fast.I would rather work directly with seller but rarely possible. Usually a waste of time in the case of FSBO.

This greatly speeds up the process by cutting out one middle man. In reality you are representing yourself in negotiations while the agent ties up the legalities of the process.

Agent is highly motivated to close as they do not have to split the commission and usually relaxes some what as they feel they have more inside knowledge of the negotiations than normally.

A word of caution: this is risky, a fairly high level of personal skills/experience in negotiations is required. This is not simply a case of making offers and counter offers. In addition to negotiating you are required to understand what the seller and agent are thinking and use that to your advantage. This is the main reason I do not use my own agent as I can not easily read other people through a third party.

 

[MONEY]

QUOTE (RedlineBrett @ Jan 24 2010, 03:12 PM) If I am a seller`s agent I won`t speak with the buyer... only the buyer`s agent. I do not want to inadvertently create a dual agency situation and expose myself to the liability of such a scenario without having consent from both sides.

So I would either work my client and ONLY you, or ONLY your agent... but never both. And if you weren`t using an agent I`d have you sign off on that at contract time.

Your agent has the license and carries the liability for acting professionally in that capacity. If you aren`t happy either get another agent... or get licensed yourself!

Then why bother having your name and phone number on the listing sign. Sellers sure the hell won`t be calling you. (rarely). It`s BUYERS who will call your number!

 

[Nir]

QUOTE (MONEY @ Jan 24 2010, 10:08 PM) Then why bother having your name and phone number on the listing sign. Sellers sure the hell won`t be calling you. (rarely). It`s BUYERS who will call your number!

Money, what Brett meant is that he will only speak with the buyer`s agent, not the buyer himself.

 

[gwasser]

QUOTE (MONEY @ Jan 24 2010, 10:08 PM) Then why bother having your name and phone number on the listing sign. Sellers sure the hell won`t be calling you. (rarely). It`s BUYERS who will call your number!

What a lot of you don`t understand is that a realtor plays different roles/capacities when dealing with buyers and/or sellers.
First of all there is the buyer`s realtor and the seller`s.

Usully both start out as agent of the buyer and the seller respectively. In Alberta that is done through a Seller-brokerage agreement and it has to be in writing otherwise your listing cannot be placed on the MLS. Also, buyer`s are now expected to sign a Buyer-brokerage agreement.

Both agreements spell out what the client can expect from their agents but also what is expected from the buyer. The agreements also spells out how commissions are to be paid. Discussing the detailed terms of these agreements goes beyond what goes into a forum discussion. However, it basically outlines that the realtor agent has fiduciary duties towards the client which includes things such as confidentiality and acting in the best interest of the client, even if that conflicts with the interest of the agent or the brokerage that the agent represents.

Now we`re coming to the crux, so stay with me. The client agent relation is not between the client and the realtor. It is between the client and the realtor`s BROKERAGE which is represented by the realtor. So in theory the brokerage is your agent NOT the realtor. The realtor only represents the brokerage. This is common law as it applies in Alberta and probably also in the other provinces.

NOW if the listing is done with the same brokerage as the one who `employ`s` the realtor of the buyer, or if the realtor is the agent of both the buyer and the seller, then there is according to the law a conflict of interest. Because how can the brokerage and its agents act in the best interest of both the buyer and the seller at the same time?

We used to call this situation `Dual Agency` but that was struck done by the courts. Now we`re calling it `Transaction Brokerage` and the realtor(s) must immediately disclose to buyer and seller that this situation has arisen. Both buyer and seller will be offered to seek representation through another brokerage. If one of the parties decides to do so, the realtor can refer that party to another realtor at another brokerage. The realtor will in that situation likely receive a referral fee from the new realtor`s brokerage. OR, when both the buyer and the seller want to stay with the original brokerage, they can go into `customer status`. The Seller-brokerage and the Buyer-brokerage agreements will be put aside for this particular transaction until an offer has been accepted or if no sale resulted the agency relation can be resumed and both parties move their own ways.

Customer status means that the agent is like a `sales clerk` and owes you no longer fiduciary duties except that he/she cannot reveal any information to either buyer or seller that was given out in confidence. From the seller`s side however, (even when in agency) the realtor is always obliged to disclose `hidden material defects` as he/she knows to any potential buyer. He/she cannot disclose seller`s motivation nor can he/she disclose how low the seller is prepared to go. For the rest all knowledge regarding the property is disclosed in an honest and capable fashion - just like a sales clerk. So no misleading statements.

From the buyers side, the realtor is obliged to disclose the buyer`s ability to buy the property to the seller. But /she is not allowed to disclose how much higher the buyer would be prepared to go in price before walking away. Unless the realtor was provided written permission by the buyer and/or seller as the case may be.

Finally, the realtor(s) are not to provide any advise regarding the property unless that advise is disclosed to both buyer and seller. The realtor will ensure that any offer of purchase is properly administered and that the terms and conditions as instructed by buyer and/or seller are properly entered into the offer. So, the realtor tries to facilitate the deal and do so evenhandedly.

A long story, but it may illustrate why some of the ideas/question`s asked in the initial posting may not work. Realtor`s have a lot of liabilities and regulations to follow. In Alberta that is outlined in the Alberta Real Estate Act and in the rules of RECA, Real Estate Council of Alberta, whose duty it is to protect the public from realtor errors and misbehavior. Realtors are also required to have an errors and omissions insurance (REIX) which is part of RECA.

When realtors become partners of investors, i.e. they are having an ownership interest in the real estate transaction itself, they get in all kinds of nasty conflict of interest situations. So they would be often reluctant to do so. Also when realtors deal for themselves they are no longer covered by REIX insurance.

Many of the issues and ideas mentioned in the first post can not be done by a realtor without setting himself/herself up for some nasty repercussions. If you want to have more details sit down with a realtor and ask him/her to explain the agency relationship and go through a seller brokerage agreement, a buyer brokerage agreement and a customer status agreement. And you will realize how much protection you`re getting when dealing with a licensed realtor.

Hope this helps

 

[RedlineBrett]

QUOTE (investmart @ Jan 24 2010, 11:56 PM) Money, what Brett meant is that he will only speak with the buyer`s agent, not the buyer himself.

If a buyer calls me I assume he does not have a realtor and I treat this lead as a CUSTOMER (no agency relationship) until the buyer asks me for advice on the property rather than just information.

If that happens, and I have the permission from my seller to pursue leads that may result in an agency relationship being created, I tell the potential buyer about transaction brokerage as Godfried described above.

If I get a call from a shrewd buyer I can usually read between the lines and I`ll ask him if he`s working with a realtor. If he says yes I tell him to hang up and get his realtor to call me. If he says no I will work with him if the property he`s calling about has an owner that has authorized me to act accordingly.

 

[Nir]

Hi All,

It`s interesting Lucas has clients who find stuff on their own and I guess he is Ok with that. However, when such investors call Brett, he finds out they are working with agents, and tell them to hang up and get their realtors to call him. it`s good to know many investors with realtors find stuff on their own.

Lucas:
"I have clients that find stuff on their own but they forward the info onto me to do the dirty work..."

Brett:
"I`ll ask him if he`s working with a realtor. If he says yes I tell him to hang up and get his realtor to call me."

Thank you everyone for the great feedback!

I understand better now the pro`s and con`s of working this way with a realtor.

Regards,
Neil

 

[gwasser]

QUOTE (investmart @ Jan 25 2010, 06:20 PM) Hi All,

It`s interesting Lucas has clients who find stuff on their own and I guess he is Ok with that. However, when such investors call Brett, he finds out they are working with agents, and tell them to hang up and get their realtors to call him. it`s good to know many investors with realtors find stuff on their own.

Lucas:
"I have clients that find stuff on their own but they forward the info onto me to do the dirty work..."

Brett:
"I`ll ask him if he`s working with a realtor. If he says yes I tell him to hang up and get his realtor to call me."

Thank you everyone for the great feedback!

I understand better now the pro`s and con`s of working this way with a realtor.

Regards,
Neil

Do you understand, why Brett tells the guy to hang up? I bet Lucas would do the same. It is the law, you can not work with someone who has already signed an agreement of exclusive representation with another broker. That is what Brett refering too.

 

[Nir]

QUOTE (gwasser @ Jan 25 2010, 09:38 PM) Do you understand, why Brett tells the guy to hang up? I bet Lucas would do the same. It is the law, you can not work with someone who has already signed an agreement of exclusive representation with another broker. That is what Brett refering too.

That`s funny. if all agents tell the guys to hang up how do you think Lucas` clients "find stuff on their own"?
Anyway, yes, I understand his response and it makes sense. However, I also understand some of Lucas clients.
Cheers.

 

[bizaro86]

QUOTE (investmart @ Jan 25 2010, 09:57 PM) That`s funny. if all agents tell the guys to hang up how do you think Lucas` clients "find stuff on their own"?
Anyway, yes, I understand his response and it makes sense. However, I also understand some of Lucas clients.
Cheers.


I "find stuff on my own" and forward it to my real estate agent to follow up with all the time. Typically its stuff I`ve found through an MLS search, a sign on a property, standing property search emails, etc. I never call the RE agent myself, because of the time it takes me to call their office number, and talk to the secretary to get the call paged out to them, have them call me back, and ask the one maybe two questions I can get answered before they ask if I already have a realtor. In that amount of time, I can call my realtor`s private cell, she`ll call them and get me all the information I need. More information, and less time commitment for me.

Michael

 

[gwasser]

QUOTE (investmart @ Jan 25 2010, 09:57 PM) That`s funny. if all agents tell the guys to hang up how do you think Lucas` clients "find stuff on their own"?
Anyway, yes, I understand his response and it makes sense. However, I also understand some of Lucas clients.
Cheers.


There are many ways to find out about properties than only relying on your realtor. The best example is the yellow letter system and I can think of many other ways that don`t include switching from one realtor to another without following the proper procedures.

That Lucas` clients come to him after they found a property means that they think that Lucas (and other realtors) provide valuable expertise and protection other than finding the property. The same is true for using lawyers, mortgage brokers etc. You get what you pay for.

The irony of all is that if you buy directly from a property owner, you really do not get a lot of a price reduction. You still have to pay in many cases market value - even FSBOs are not a lot cheaper than MLS listed properties. Sometimes they cost even more because the seller has an inflated idea of the property`s value and is not inclined to pay for the commission or sharing it with the buyer. Furthermore, when using MLS listings, property descriptions and specifications have to meet certain standards, something the FSBO properties don`t have to.

So really, as a buyer, what do you have to lose by working with a realtor? And as a seller, if you don`t work with a realtor you don`t get listed on the MLS and that is where the majority of buyers find the properties. That simple.

Neil, I think you`re trying to cut costs so much that you hurt yourself. There is a middle ground.

 

[RedlineBrett]

QUOTE (bizaro86 @ Jan 26 2010, 08:46 AM) I "find stuff on my own" and forward it to my real estate agent to follow up with all the time. Typically its stuff I`ve found through an MLS search, a sign on a property, standing property search emails, etc. I never call the RE agent myself, because of the time it takes me to call their office number, and talk to the secretary to get the call paged out to them, have them call me back, and ask the one maybe two questions I can get answered before they ask if I already have a realtor. In that amount of time, I can call my realtor`s private cell, she`ll call them and get me all the information I need. More information, and less time commitment for me.
Michael

My post was referencing a listing of mine where I get a call from a prospective buyer.

I have buyer clients that find something and call me about it... either surfing MLS or through an automatic search I have set up for them. That is a totally different relationship than what my original post was referencing I even do FSBOs with some clients although they have agreed (through a signed buyer brokerage document) to pay me what I would make if the property was sold through the MLS... so I am ok to work that market as a true buyers agent.

 

[Nir]

Thanks Brett, I learned a lot from this discussion!
Godfried, if you read my question it has nothing to do with cutting costs. it`s related to improving the purchasing process. specifically, I lost deals because we (my great agent and I) were not fast enough or did not have visibility. obviously as a buyer you don`t save (at least not much) by going without an agent. The issue is not related to savings at all. if you read my example, last year I purchased a property that could not be purchased with an agent! I know it`s hard to believe, can not elaborate too much but it required persistency that would simply not make it worth the time for an agent. therefore, was on the market for a VERY long time. my best purchase so far. bottom line i will continue working with agents understanding we will do a better job this way and find better properties. but also lose some - those that require very special effort or very quick responses that simply can not always be expected from an agent who has 10 other clients like you and me.
Regards,
Neil

 

[Lucas]

Hi,

I should have been more clear...

My clients "find stuff" (am I quoting myself??) on MLS (or comfree, kijiji) and I approach the listing agent on behalf of my client. My clients do not approach the listing agent themselves as this would potentially harm their negotiating leverage (ie. they give out too much info etc...).

I was referring to buyer representation whereas Brett was referring to Seller representation...2 completely different ball games. If I recieve a call from a "new" buyer (ie. one that I haven`t met and/or created an agency relationship)...I will definitely ask if they are working with an agent. If they are I wouold absolutely do the same as Brett.

I have many clients that forward me MLS numbers, addresses or even word-of-mouth referrals. I would like to think that my clients would prefer me to make the necessary call on their behalf.

I hope this clarify`s what I meant in my original post...

Thanks,

Lucas

QUOTE (investmart @ Jan 25 2010, 10:57 PM) That`s funny. if all agents tell the guys to hang up how do you think Lucas` clients "find stuff on their own"?
Anyway, yes, I understand his response and it makes sense. However, I also understand some of Lucas clients.
Cheers.