Realtor Says I'm Running a Scam

[MichaelC 160]

So I'm working Craig's List for some deals, sending my usual "Would you be interested in selling your house with a lease purchase. . ." email. I've taken to adding at the end of the letter, "PS: I am not a Realtor and prefer to deal direct with the homeowner only. If you are a Realtor, or if your house is already listed, please disregard this email. Thank you." Nothing personal, mind you. Just my preference to deal direct with the sellers.

In addition, I specifically avoid sending the email to those ads that mention they are Realtors. However, many Realtors don't mention this because they want maximum exposure and possibilities. And I'm fine with this. Should my email reach one of these folks I would expect it to go into their Delete folder.

But this morning I awaken to find an email from one woman who failied to mention in her ad that she is a Realtor. Well I guess my email rubbed her the wrong way because she responded, and I'm quoting: "What is wrong with dealing with a Realtor? Is it because they can smell a scam?" I got a good laugh at this for some reason. And I'm still considering what, if anything, I should say in my reply. Any suggestions? Keep it clean, guys. . .

[Dan (SoCAl) 0]

I figure if I'm not getting snarky remarks from Realtors and other investors then I'm not doing my job. These midnight emailers are simply frustrated with their personal circumstances and have stooped to being completely unprofessional with strangers. Sometimes it's fun to bait them with condescending *educational* replies (it's sport, really, and you can lead them to an emotional meltdown within two emails), but I think no reply is the best reply.

 

I'm actually running between the raindrops with Realtors lately. After two long years I've finally found one who I've developed an excellent working relationship with and who looks to be a promising LP partner. In addition, last night I closed a CA between two Realtors, each with active listings and deals in escrow. During the signing the homeowner said "Can you believe this?! Dan's practically the only person in the room who's not a Realtor, but he's putting our deal together!"

 

That makes up for the cold calls where a frustrated homeowner/realtor/investor starts in with "First of all, buddy, what you're doing is illegal...!"

 

Dan

[MichaelC 160]

Sometimes it's fun to bait them with condescending *educational* replies (it's sport, really, and you can lead them to an emotional meltdown within two emails), but I think no reply is the best reply.

You're right, of course, Dan. But I couldn't resist. I had to respond with just that: a condescending, educational response.

My response to her "What is wrong with dealing with a Realtor? Is it because they can smell a scam?", was "No. It's because most are the height of ignorance when it comes to real estate. Most are nothing more than salespersons and chauffeurs. Most have never owned an investment property in their lives. So unless a prospective buyer is putting down ten percent and getting a 30 fixed rate mortgage, the typical Realtor is clueless and unnecessary. Glad I could clear that up for you, Tamara. No need to thank me." A bit harsh? Probably. But her blind accusation riled me some.

Her brief reply was along the lines of her being the protector of homeowners against the likes of scum like me .

What else can I do but laugh? It's 1:30 on a Sunday afternoon, 80 degrees, and I have a fridge full of Sam Adams Cherry Wheat beer. See ya on the other side. . .and then I'm hittin' up Craig's List again!

. . .last night I closed a CA between two Realtors, each with active listings and deals in escrow. During the signing the homeowner said "Can you believe this?! Dan's practically the only person in the room who's not a Realtor, but he's putting our deal together!"

Classic! Put that on your business card, Dan.

[Jason (AL) 1]

My personal opinion is that it's a scam to charge a homeowner (desperate or not) 6%

for sticking a sign in the yard, tossing it into the MLS (amongst the sea of other un-sold houses), and hoping

for the best.

 

It seems that this particular agent is protecting her potential commission

from disappearing as a result of someone who knows what they're actually doing.

 

Have fun wreaking havoc in cyberspace with your cherry beers. <-----these good?

[MichaelC 160]

My personal opinion is that it's a scam to charge a homeowner (desperate or not) 6%

for sticking a sign in the yard, tossing it into the MLS (amongst the sea of other un-sold houses), and hoping

for the best.

 

It seems that this particular agent is protecting her potential commission

from disappearing as a result of someone who knows what they're actually doing.

True dat, SuperDude.

Have fun wreaking havoc in cyberspace with your cherry beers. <-----these good?

Any better and I suspect they would be illegal.

[Doug Pretorius (ON) 9]

Oh if I had a nickel!

 

My first instinct would be to say: "How is it that you can manage to smell anything when you're standing neck-deep in your own BS?"

 

But hopefully cooler heads would prevail and I would simply do what you expected her to do with your first email...[delete]

[Rich_in_CT 0]

I KNEW IT WAS ALL A SCAM!!!! THE TOOTHFAIRY WAS RIGHT ABOUT YOU GUYS!!!!!

[sholandaingeorgia 0]

Realtor sneaking out...um-hum...I'm now an Associate Broker

 

Hey guys, you know, we're not all bad don't cha! Look at me!!!

[MichaelC 160]

Realtor sneaking out...um-hum...I'm now an Associate Broker

 

Hey guys, you know, we're not all bad don't cha! Look at me!!!

I've always said you're exceptional, Sholanda.

[Doug Pretorius (ON) 9]

One of a kind!

[GeoffGreen 0]

You are right, most realtors don't understand the investor approach. I am a realtor and I help people sell and purchase properties - and yet I do a lot more than plant signs.

 

I also am a private investor. I will never object to investors approaching sellers - but wonder why you think you need to put in all the disclaimers in your message to the seller?

 

Also, if their house is already listed and they are running an ad themselves on craig's list then you have every right to approach them directly - in my humble opinion.

 

I frequently take listings and allow the seller to find a buyer by themselves. I've never had one find a buyer before I have though...

[Rich_in_CT 0]

Yeah, I also don't understand all of the extra disclaimers in there.

 

Here are some I've sent recently to FSBOs:

 

"Would you be interested in selling this home on a lease purchase? I have a long list of buyers that are looking for homes on a lease purchase basis and Iʼd be able to get a tenant buyer setup in a very short timeframe. Please let me know if you are interested in finding out more."

 

OR

 

"Would you be willing to sell this house on a rent to own basis?"

[Doug Pretorius (ON) 9]

I completely understand MC's disclaimers from the perspective of attempting to ensure that he doesn't have to work with a realtor. See, there are a number of issues that come up when a lease purchase investor has dealings with a realtor, so I'll list them off for you:

 

1. If the house is listed with a realtor, 999 times out of 1000 the realtor will stand in the way of a LP getting done. Realtors don't understand LPs but instead of just admitting that, they would rather derail the deal.

 

2. Even if you have a willing realtor, it's very difficult to satisfy them in a CA or SLO. They can't seem to comprehend the fact that there's only 2-5% of the purchase price to go around at the outset of the deal. Most want their entire (double-sided) commission upfront, which is impossible in all but a very few rare cases. If the deal is a CA then there is absolutely ZERO chance a realtor can get both sides of the commission upfront because that's all the money the LP investor gets. If the deal is a SLO and the price is WAY below market value, then some investors might opt to pay the agent upfront and hope to make their money later (a very unfair situation if you ask me).

 

3. Realtor demands in a CA for example are typically unrealistic. They expect US to convince the seller, and find the buyer, and then give them their entire commission upfront. Gee thanks! And what are YOU going to do besides sit on your fat ass? What I believe would be FAIR is for the realtor to bring a pre-qualified seller lead to the investor, the investor brings the buyer (or IS the buyer in the case of a SLO) and they split the T/Bs down payment.

 

4. Another risk you run when dealing with a realtor whether it is their listing or their own house, so that the realtor will see how you do business and steal your ideas and become your competition. This is a very minor problem when dealing with sellers because very few sellers are going to get into the real estate business. But realtors are already in it and have contact with motivated sellers on a regular basis, so it's easy for them to become our competition.

 

So there you have. My synopsis of why it's usually a bad idea to do an LP with a realtor involved!

[Doug Pretorius (ON) 9]

Oh, I would like to add one more thing.

 

Realtors like to counter the above arguments with the notion that doing business with them will lead to greater volume which will make up for the cost of commission. Well I've seen no evidence that is true in the years I've been in this business. Because of #1 above your chances of getting a LP deal are vastly reduced by dealing with realtors. Instead of the normal 1 in 20 or so (1 deal per 20 sellers) the numbers go through the roof, in my experience ZERO out of nearly 500 offers.

 

Now I've said it many times before and I'll say it again:

 

If you have an uncooperative agent in one hand. And the seller's phone number/address in the other. Wouldn't YOU bypass the agent, too? And I'm not talking about sellers who are advertising FSBO. Those are fair game regardless. I'm talking about exclusively listed sellers.

[WilliamC 0]

one thing that comes to mind when I think of working w/ a Realtor is, as Doug stated...

 

If you are doing a CA, there won't be enough cash to go around, even if you pay him/her 2% now and have the seller give him/her the rest on the backend, that puts you in about at 1% or maybe less.

 

The problem with a SLO is, the seller is selling at market value, there is no to little spread, and in these days with no appreciation.... well your back to only splitting the option money, and you still have all the risk with no backend profits.

 

I think it to be best to stick with finding the seller myself...... UNLESS the market goes into another fast rate appreciation... then and only then would paying a Realtor his commission to enjoy big profits on the backend.