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pilot76180

Contacting listed sellers

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I know this may have been posted here somewhere before, but what has been everyone's expereince with contacting a homeowner who is listed with an agent? We are getting ready to start a big listed sellers campaign and was wonderig what you all have found to be the response.

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I don't think it would hurt one bit to try because the way I see it, these homeowners will have alternative if their listing doesn't produced a prefered result.

Cruz or Brandon?

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I have mixed feelings about this type of scenario.

 

Initially I thought this was a bad situtaion because it might confuse the potential tenant-buyer.

 

Here's why (example $$$'s):

 

You have a house listed with a Realtor, with a sign & info box in the yard. The listing price is $100,000.

 

The same house under contract with me also has my "Rent-to-Own" sign and my info box in the yard. My price option price is $110,000.

 

I felt that this potentially gave prospective tenant-buyers a position to argue about & attempt to negotiate the option price. Not good. I now have to explain and justify why I am entitled to 10% more under my deal.

 

Now, all of that being said, I just filled a house on a sandwich deal in exactly this type of scenario. Both signs in the yard, my price $10,000 higer than listed price, and I won. Hmmmm...not sure what I think now.

 

I'd still have to say that I'd prefer not to do it this way again.

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I agree with you mark!

 

What I am saying is a whole different thing. I would simply give these listed sellers another option if their listing expires without prefered results.

 

Cruz or Brandon?

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I know this may have been posted here somewhere before, but what has been everyone's expereince with contacting a homeowner who is listed with an agent?  We are getting ready to start a big listed sellers campaign and was wonderig what you all have found to be the response.

Pilot, contacting them to do what? To cancel their listing agreement and do business with you? Or, to work with you and the Realtor simultaneously?

If I contact a homeowner who is under a listing agreement with a Realtor, or if they initiated contact with me, I tell them quickly that for us to do business will require their cancelling that listing agreement, and that they should verify what their obligations are to the Realtor should they sell or lease their house after cancellation. Once this is done, we are free to deal as far as I'm concerned.

By no means would I ever suggest that anyone of us should try and go around a listing agents back to try and do the deal and save the homeowner some commission dollars. You may get away with it once or twice. But, eventually, you will get caught and probably find yourself in legal quicksand. It's not worth it. Do the right thing, then do the deal. There are plenty of deals out there so that none of us needs to be less than honest. OK, off my soapbox.........

On the other hand, I have found myself in similar situations to what Mark has just described. I'm doing a rent to own type deal, while the Realtor is trying to sell the property at the same time. And, as Mark said, I'm asking a higher price. The tenant/buyer would ask why. I would explain that cash buyers always get a discount, but that they, the tenant/buyers, are getting great terms, time, rent credits, etc. You know the drill by now. This would usually suffice and I would win out.

So, while I don't like being in this Me-versus-the-Realtor situation, I have done it on occasion, and it has usually worked out in my favor.

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Pilot,

I did a deal a month ago where I had a tenant/buyer that was in desperate need of a property in an area I don't normally work in. I called a Realtor in that area and told him our situation. The tenant/buyer had $7K to put down and could afford $1200 a month and needed a two-year lease because of credit issues. The Realtor gave me 15 expired listings (which I called to no prevail) and one listed with a Realtor that said "possible Rent". Seller was out of town and getting motivated. I called the Realtor (selling Realtor) told him my dilemma and asked if I could call the seller. He was reluctant at first (Old school Realtor with a lot of years) and didn't fully understand the situation. I told him I would explain it to his broker.

 

Long story short. He blew me off for 2 days and I called the broker directly and left a message about my offer and was pretty stern. I then received a phone call from the Realtor with the seller's name and number the next day. I called the seller, pitched the deal, explained the entire process to the Realtor and their broker, had them change his "seller's agent" agreement to a "dual agent" agreement and closed the deal. I had to offer the Realtor an extra $1,000 for their commission but I had the tenant/buyer in the house within 4 days of initial contact with the Realtor. I paid the Realtor that gave me the name of the listing Realtor $500 and walked away with $2,000. I assigned the deal back to the seller and the agency made a further PA with the tenant/buyer to get the rest of their commission at the end.

 

The Realtor only asked me one question after the deal was done. When can we do another! (PS This was all done over the phone. The Realtor only met me when I gave him a copy of the agreements and the check)

 

I think with the right motivation and "money", you can easily work with Realtors that are about to lose their listings.

And by the way, I sold the house for $192K on a two-year lease and it was only listed at $175K for a quick sale.

 

Note: Make sure you take the listing agent's flyers off the kitchen counter when you show the house. I have had to explain twice why they were paying almost $20K more than it was listed! LOL

Hope this helps,

Adam

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Nice post Adam!

I have learned a lot right here. I have never even thought about contacting a Realtor for any reason because the only time I have ever tried to work with them it was like pulling to teeth to get comps. Needles to say, I have never gone back to them for anything, but I guess you are right, the right motivation will get deals done all the time.

Cruz

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Thanks for the input people! MC, I didn't mean to imply that we would try to "sneak" a L/P without telling the REaltor. I just meant contacting the owner via mail, and letting them know that this is an option. I always let them know that the listing must be canceled or expired. I tried to work with a Realtor once to help some people and he had some choice words for me. I guess it depends on the REaltor though. I just got my first call from a letter I sent to an expired listing. I went out last night and we signed them up! They are excited to get this done quick!

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pilot, one of my most effective marketing techniques has always been to mail what I call my introductory letter to homeowners. As I'm driving about, if I see a house for sale with a Realtor, I will make a note of the address and stick the letter in the mail. Sometimes with a "Dear Homeowner" salutation. Or, if I have the time I will look up the owners name and personalize the letter.

This simple effort will often get a response and lead to a deal. I'm not surprised to hear you having good results from this, either.

Have I earned a complimentary flight in the first class cabin of your Lear Jet, yet?? :D

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This reply is for Adam King (MI). Adam, could you break down your post. I still don't fully understand what you did with the Realtor listed home.

 

had them change his "seller's agent" agreement to a "dual agent" agreement and closed the deal.

What did this do for you? Are you a Realtor? I guess I don't understand why this had to be done.

 

I had to offer the Realtor an extra $1,000 for their commission but I had the tenant/buyer in the house within 4 days of initial contact with the Realtor.

So you mean you paid the listing agency $1000 of what you got as option consideration from the T/B?

 

I paid the Realtor that gave me the name of the listing Realtor $500 and walked away with $2,000.

This was a second Realtor involved? Are you saying that this Realtor is the one that gave you the name of the Realtor that had the listing? And this is $500 that you also paid from the option consideration you got from the T/B?

 

I assigned the deal back to the seller and the agency made a further PA with the tenant/buyer to get the rest of their commission at the end.

Do you mean you assigned the agreement you had with the seller to the T/B? Also, what does PA mean? and are you saying that the original listing agent will get full or some commission when the T/B exercises their option to buy? Who will pay this...the seller?

 

Can you break down all the numbers?

Listing Price

Option price with T/B

Option consideration paid by T/B

Amnount you paid out each party as referral, etc

 

Thanks!

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Mark,

First off, NO money EVER comes out of my own pocket The money I used was from the Option Consideration from the tenant/buyer.

 

Yes, there were two realtors involved. One on the sidelines who gave me the lead (Paid him $500 for doing so) and the other that had the property listed.

 

Yes, I paid the listing Realtor an extra $1,000 to make it happen, but only after he and his broker asked. (I realize that I said I offered that in my post. I don't ever do that.)

They then made a PURCHASE AGREEMENT (PA) with the tenant/buyer so they could get the rest of their commission at the end IF the tenant/buyer cashes out. This was because I assigned my interest and was no longer in the deal. If it were a sandwich LO, they would have made the PA with my company.

 

The listing Realtor had a "Seller's Agent" agreement with the seller. This means that they are working for the seller and CANNOT give detrimental information to the buyer. Since I was now in control of the transaction, the agent changed their seller's agent agreement to a dual agent agreement and simply acted as a transaction coordinator. This was because I stepped in and needed ALL information. This also allowed me to talk directly with the seller and get all the information I needed.

 

Agents spend 25% of their time selling houses and 95% of their time making it legal.

 

This was a complicated deal for a newbie as far as I'm concerned. I wouldn't worry about these types of transactions until you get some deals under your belt. I ALWAYS have to teach the listing agent's broker how to perform these transactions and work with them to make them legal. That isn't something I could have done a year ago.

Hope this helps,

Adam

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Agents spend 25% of their time selling houses and 95% of their time making it legal.

 

 

I don't think I want to continue in REI...I can't seem to work out those percentages you stated...I can't get them to add up, Adam. :D

Would you care to break them down so I can comprehend? ;)

 

...nice post by the way.

 

Take care,

Jason

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Jason,

Okay that's it. You guys are going to make me pull that darn deal out of the file cabinet aren't you!? ;)

 

All right, the money went as follows.

 

$7K Option Consideration

$1,200 first months rent

 

Total $8,200

$5,700 to the seller so she paid the Realtor and kept some herself. (I actually was the only one writing checks because she was out of town)

The numbers were something like $2K plus something to each person etc

 

$2,500 to my company

 

$500 finders fee to my Realtor that brought the deal.

 

$2,000 in my pocket.

 

If I have to tell you anymore I may have to hurt ya.

Regards,

Adam

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Adam...

 

no, no, no....not the deal #s....I understood that homie...

 

When you said:

Agents spend 25% of their time selling houses and 95% of their time making it legal.

 

25%

+ 95%

_______

120% ...realtors aren't that productive are they?

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