Contacting Owner Directly While Under Agency Contract...?
Say you find a vacant home that is a great value with a motivated seller and a possible L/O goldmine. But it's repped by a 'hostile' realtor.
(By hostile I mean one who does not work with investors or think out of the box.)
We all know realtors are SUPPOSED to take all offers to the owners. However, there are those that only act in their own best interest and will bury offers that do not produce commissions.
Would you write a note directly to the home owner and say "contact me when your agency contract expires if you want to sell the house." ?
NOTE: I have several realtors and brokers in my family and know that the majority are decent, hardworking and ethical. Here I'm talking about the few that kill deals for their own purposes.)
Thanks.
If YOU are not licensed agent, you have every right to contact the O directly & tell him what's going on, what you want to do, etc.
Since he does have it listed, he's got a legal contract (maybe) to pay the commission if the RE came to your attention via that listing...but YOU don't have to deal or work with the agent.
In fact, part of John $$$ course contains a form FIRING letter to the agent, from the Owner, which I expect works OK probably 90% of the time.
Most smart RE agents I know don't want any part of a seller who wants to sever the K and go his own way.
As John mentioned, you do not have to go through the agent to contact the owner. The client though typically has a contractual obligation to pay the agent if the house is sold whether or not the agent is the one presenting the offer. HOWEVER, if you give an offer for the agent to present and the agent does not present it within a reasonable amount of time, the contract is unenforcable due to abandonment on the part of the agent. Have the owner cancel his contract due to abandonment and get a signed agreement from the agent & broker that neither he nor his broker will have any claim on a brokerage fee. If he balks, threaten to report him to the board of realtors and the state division of real estate.
Remember that you also have the right to be present when the offer is submitted to the seller. (Put it in the purchase offer addendums.) You can then explain what your offer is when it is presented and be able to reduce the amount of damage that an uneducated agent can do.
Here is another tip: If there is only one agent involved he will try to represent both you as the buyer and the seller so that he gets both sides of the comission (full 6%). Tell him you do not want him to represent you. Put it in the purchase offer that he gets only 3% (or half of the full comission.)[ Edited by rup on Date 12/13/2003 ]
You all are just absolutely hateful toward realtors, LOL. But you wanna get paid...why the double standard.
If you tell them to contact you after the agency has expired, it depends on how you found the property. I'm GUESSING you found the property either by noticing the realtors for sale sign or somewhere else(newspaper, etc.). If that is the case, then doing that would still entitle the realtor to a commission since you would never have noticed the property if it weren't for the realtor.
I like this post. With that said say you gave the realtor your offer and he never responded. So you have no idea if the seller ever got it. Am I able to contact the owner explain what the realtor did and buy it? Can the realtor force seller to pay him because he showed me the house and I sent an offer in? Just wondering?
makingaliving:
Relax. Go back and read my original post.
I don't think anyone on here hates realtors. In fact, we welcome the ones that play fair and are open to creative deal making.
My point clearly stated that some, actually very few realtors, are hostile toward creative deals and act unethically as a result.
And we, as investors, should have recourse and/or options with which to make deals, including but not limited to circimventing unethical agents.
Ruman:
That may (or may not) be the case according to the contract, but is virtually impossible to enforce.
If a contract expires on a Tuesday and I knock oin the guy's door on Wedneday with an offer, there's not a court in the world that could prove where or when I learned that house was on the market.
For instance, it could be my first day in town and I just happened to walk by and like the house. Not likely, but possible.
I'll check with my relative who owens a large brokerage and get the legal answer, rather than posting supposition.
Most listing agreements say that the listing agent is still entitled to a commission after the contract expired IF the owner sells the property to any buyer who had registered with the agent while the listing agreement was in force. This clause usually survives the listing agreement for 60 to 90 days.
The simple solution for a lease option deal, is to have the owner withdraw the property from the market and withdraw from the listing agreement on the grounds that the owner has decided not to sell at this time and will just rent the property for awhile.
I think that we must work to create a non adversarial environment between real estate brokers... and those that seek to screw them out of the very scenario that they were hired to resolve.
Real estate brokers &/or their agents (they are not necessarily Realtors) are understandably averse to losing anticipated commission, and (many) have learned it necessary to become control freaks.
You'll be more successful if you learn to embrace their passion instead of attempting to banish them.
Since the real estate broker works for the homeowner, I would think that once you have a meeting of the minds with the homeowner, it would be appropriate to have a meeting between the Seller, the Broker, and the Purchaser. Make sure that you approach the Broker, not the Broker's agent. Only the Broker of Record and the Seller can agree to amend the listing contract to reflect. the proposed transaction. In my experience, once the real estate broker is assured that the listing/commission contract will be considered... (it's fully negotiable) and the Seller totally understands the 'deal' in front of him... you can all move forward.
Dave:
Great post.
TheShortSalePro:
Again, this about HOSTILE brokers/agents who will not work with creative buyers. They exist, and are impossible to reason with. (At least I've encountered them.)
There's no question working WITH people is the best solution.
But in some cases the carrot doesn't work and the stick is a necessity.
In my estimation, agents/ brokers who act unethically ae 'screwing' themselves out of commissions, not the other way around.
Why are they hostile? Probably because historically their experience with 'creative' buyers has resulted in failed transactions, a disservice to their Client (the Seller), and, of course, lost commissions. But if the real estate broker or broker's agent is hostile, then you could try to find out what happened to make the person hostile. This could be a learning experience for both of you.
Diplomacy is essential in the art of negotiation. Negotiation is an educational process, and an exchange of information.
If a real estate broker or broker's agent acts unethically, then there are steps to expose and punish these rascals. If allegations of unethical behavoir are unfounded, and simply an expression of the CREI's frustration at not being able to overcome legitimate obstacles... then I suggest that if one wants to operate in this niche, he/she must learn to foster a cooperative relationship.
Frankly, if a real estate broker is on the scene first... then perhaps the CREI didn't tend to his farming....
Once you realize that a real estate broker should be made into a friend, and not an adversary... you'll close more deals.
You can maintain that the broker is hostile and uncooperative. Fine. But where does this get you?
[ Edited by TheShortSalePro on Date 12/14/2003 ]
TheShortSalePro:
It's not my burden to 'find out why' the agent is hostlie; it's my job as a CREI to close deals.
If you choose to placate and coddle unethical agents, that's certainly your volition. I don't have time to hold hands with someone who is bitter about past deals.
I've found great success in a (non-RE) industry and learned that sometimes a tool is just a tool, no matter how much nicey-nice you play. Perhaps as you execute larger deals this is a hard 'lesson' you'll learn, although I honestly hope you don't.
The purpose of the original post here was to explore, theoretically, different avenues of approach when confronted by the aforementioned tools. Nothing more.
Actually as a realtor there is something you can do to the effect of writing down everyones name and info of people that contacted you while the house was listed under your name. You then send that list to the homeowner. If someone on that list ends up buying the house, you are still technically entitled to a commission since it was your doing that brought the buyer. Granted I'm sure this rarely happens, but it is possible.
Quote:
On 2003-12-14 08:05, johnqreplies wrote:
Ruman:
That may (or may not) be the case according to the contract, but is virtually impossible to enforce.
If a contract expires on a Tuesday and I knock oin the guy's door on Wedneday with an offer, there's not a court in the world that could prove where or when I learned that house was on the market.
For instance, it could be my first day in town and I just happened to walk by and like the house. Not likely, but possible.
I'll check with my relative who owens a large brokerage and get the legal answer, rather than posting supposition.
If you deal with an unethical(not to mention against the rules of the RE commission) real estate agent and do not report them to either their broker or the real estate commission... it's just like letting a criminal back out on the streets. They're going to reappear again. So report them. Did you explain in your original offer how the real estate agent was going to receive their commission?
On my first potential deal (a double) I put in an offer of 54K for the 68K asking price NOTE I CONTACTED THE LISTING AGENT AS WHO I WANTED TO DEAL WITH-I thought she will be more cooperative as she was making money at both ends. WHat a nightmare- orig offer resused even with 10K down. Then she said she wanted to hold my 10K for a few days until i came up with another offer. I came up to 58k and was refused and asked again for my deposit back. This is 3 weeks now...She said the owner will take 60K cash w/no bank involvement. I said ok upon inspection there was a water problem in the basement whinh I called his plumber about..HIS plumber said if I worked with him he would charge $500 to repair the problem(sump pump, etc..) I told her that I would spend a day helping the plumber and the owner would have to pay the 500 cash. she said no way, My atty was in on this from the start, but sitting on the side line, He faxed her a letter stating the repair and cost and she sent a note and a 10,000 check to him in 2 days, He said I could report her to the board of reators but I would prob not get any further. the realtor is about 45 mins away and does not even belong the MLS.
The deal fell thru but I got a few others o replace it. The prop was sold 7 months later for ???? It seems the realtor and seller were good personal friends so no matter what I did would have made no difference.,I tried to call the owner directly a few times and never got thru----perhaps that was a good thing as I was spending way to much time on this propery My $.02
jenkie01,
While you are contracting for plumbing repairs in property you don't own, would you come to MD and pay for a few plumbing repairs in my properties too?