Investor to cut out "buying agent"?

Question

I'm starting to invest in real estate. I do my own research & spend hours searching for property. With the massive amount of time I spend, I do not want to pay the commission (per 500,000 3% = 15,000) for a Buying Agent or just give that 3% to a Selling Agent. My solution is to take the Real estate exam, become a agent $120. Then offer a broker $1000 per deal to work under him, just so I can handle my own purchases. And keep that $15,000 for myself. My questions “Is this plan feasible? Would a broker go for it? or Is there another way to cut out the buying agent if I’m going to be doing all the work?”

More clarity: This is my understanding.
The seller pays the selling agent 6% commission. The selling agent then splits this commission and pays the Buying agent his 3%, and keeps his 3%. If there is no buying agent, the selling agent keeps the full 6%, because he is supposedly acting as buying and selling agent.
I know the Selling agent is guaranteed his 3% but I want to keep the other 3% in my pocket. Or possibly negotioate the estate price down 3%

Answer 1

First if a seller has a place under a sales contract, there is nothing you can do about the 3% going to seller contract is already written, you can try and make a deal with your broker about the commission split of the other 3%

IN general you do not need a agent to buy and sell your own property, but as you will find most places are under some type of sales agreement, unless you find a FSBO, as such the seller will already have a sales contract agreeing to 3% buyer and 3% seller nothing you can do about it

You may find a broker to work with you, all commission can be negotiated

Answer 2

I feel your pain: Since you are selling your property, you can make a flat fee offer to a real estate broker to conduct the transaction for you. You would be required to come up with a buyer. This is standard, the price of the property is not important. If you list a property, make sure that there is room for the buyers agent commission.

I would allow 4% for commissions, many buyers are afraid to buy a property without a buying agent. Having to pay more than the asking price to pay the agent creates a deal breaker. Your Broker will get the agreed fee on all transactions, 1% additional if there is a buyers agent should get your broker to (shut up and do the deal).

Personally, I pay 3% on the first $100,000 - 2% on the second $100,000 - 1.5% on the third $100,000 - 1% on anything over that. I am waiting for someone to convince me that because my property cost more, the work is harder to find a buyer. I have found that if the numbers can be aligned to the pocket of a buyer, the deal is done.

When you are going to be doing INVESTING, you have to make deals that you do not regret. If you are an investor, you know that you have to work for the good of the buyer of the property that you are selling. If you fail at this task, you will fail big time. Sooner or later a buyer backs out, if the deal in not pro buyer, replacement of the buyer is harder than you would believe.

Also: Send out alerts whenever you post a property for sale. Let prospective buyers know that you are the owner and the posted price will be adjusted to cover commissions to Real Estate Sales personels.

Answer 3

Every state has completely different laws therefore making having a license different in each state. I am in Georgia, it cost about $600 to get a license, $300 per year for lockbox key, and I think $300 per year for NAR fees. Other than that you will not need the other things I had to get, signs, lockboxes, website, etc. The broker I am with does let me keep 100% commission (that started after the first three deals, which I split 50/50, 60/40, 70/30) and a $299 per deal fee. We pay $799 per year for the office use, our E&O insurance (kind of like malpractice insurance for doctors), and other misellaneous things. Also keep in mind that you have to take a large amount of continuing education courses, most states are increasing the amount of hours needed.

The question you need to ask is how many deals are you going to do per year, and at what price. If you are going to do one home every other year, then it will not be worth it. If you are doing 2+ homes a year, then it may be worth it. I am guessing you would also be selling the home yourself as well if you are flipping homes. A great deal of work goes into selling a home that you may or may not to be involved in. You would end up having to be a full real-estate agent with signs, lockboxes, business cards, website, etc. just to get the house sold. If you do not mind the additional career it would be worth it in the long run.

Find out the state requirements, start interviewing brokers, and find out all of the costs and extra work that will be needed.

Good Luck

Answer 4

Get your license if you can. But just so you know there are $$ fees and dues to pay once you are licensed just to start transacting business. And dependingon were you are, it may take months fo ryou to even receive your license once you pass the test. Here in Vegas it took 6 f**ing MONTHS for me to get my license.
But just so you know, buyers dont pay their Realtors fees, the sellers do. You dont a pay a thing to a Realtor as a buyer.
And when you sell the property, make friends or a deal with a realtor who is willingto be cool for a few deals you will send their way and cut their 3% to 2.5% or something. Instead of one house at 3%, she gets more business doing a deal with you at 3 houses at 2 or 2.5%).
And no, a broker probably wouldnt go for the split you are talking about. You would be a new licensee and most likely on a 70/30 split for awhile. Usally no broker lets new licensees automatically go to 100% commission.

Answer 5

Get your license. Shop around for brokers who will let you work out of your home - on your own deals. After a couple years, get your brokers license. Depending on what state you're in, this takes more or less experience and classes.

FYI - As a licensed agent, you need to disclose that fact to buyers and sellers. You're no longer viewed the same as a typical FSBO or buyer.

Answer 6

Im a real estate agent in michigan, but i dont do my own stuff, because i never got affiliated with a broker.

I hear you about doing your own work, real estates are generally lazy, and uninformed about investing.

The best thing to do is just approach the selling agent, and say, look, i will pay you 3% if you handle all the work, they should be happy to.

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