AN old friend of mine has informed me that while "they don't want to work with a Realtor", they'd love to know about any of a certain category of property that might might pop up.

I don't want to appear patronizing or insult this old friends intelligence, but how do I explain that I can help them find a home AND do all the crap work for them in the deal... and it doesn't cost them a penny? They are obviously very anti-agent and seem to have the idea that it will save them money to not use a Realtor.

-jeff

You could tell them that if the property is listed by a REALTOR then they may as well use you anyway. LOL...there will still be commission paid, may as well give some to their old friend.

I guess they get the idea that they will save money because some sellers say "I have to charge X because of commissions. If it weren't for the darn realtor whom I hate to admit I need, we could take less for the property.."

Why people think REALTORS should just go around out of the goodness of our hearts, doing real estate philanthropically, without pay, is beyond me.

Have they said why they don't want to use a REALTOR?

I don't think you can develop an approach until you know THEIR specific reasons for not wanting to use a REALTOR. Their reasons might be different than what you think.

Some investors are taught through seminars that if you are buying through an agents listing to try to get them to reduce there commission to just the listing side so the investor get's the house for 3 percent less.

Jeff,
Tell him since he does not want to use a Realtor you would be happy to help him as a partner. He provides the money and you provide the expertise and split the profits.

Good points all around. I might play for a little while (calling him with reasonably good deals) and see how he responds. Although.. it's not like great deals are showing up under your nose all day long without some effort on your part. If you have time and energy to start hunting down good investments, it would be a great learning experience for you and give you a good reason to chat about real estate with others.

Maybe you could tell the guy you're working with another investor looking for a similar property, so you'd be happy to let him know about ones you find that YOUR guy doesn't want!

I dunno... be pleasant, helpful, un-desperate (I know you aren't). See what happens.

Is it just my office, or what...but everyone seems to think that agents set the commission - in my office, it's the broker. My broker would have a cow if one of us said "hey, we're cutting the commission in half!"

It would NEVER happen.

Commissions are negotiable, according to New Jersey lay I have to say that.

This is one of the more interesting posts I have read on this site. A lot of deals can be done and a lot of money can be made outside the context of being a realtor, while still doing the business of Real Estate.

Paul Oaks is headed down the right track and many agents on this page who are doomed to fail in the busineess might be able to establish a successful career if they can see alternative paths
to the realtor box.

Jeffo

You say old friend, investor, and a certain category.

I say why in the h*** do you want me to do that for you. What are your intentions, and if I were to find you such a property where are you going to get the money to swing the deal? And why shouldn't I be involved in the deal and be paid for my time and effort? I doesn't cost you anything to go into your office all week yet you expect a check on payday, why is that?

When I first started my career I had lots of these time wasters. Let them know your in business, it's not a hobby for their fantasies or freeloading. I would get "friends" saying sell my house for me free, after all it's doesn't cost you anything, or find a house for me and kick-back the commission after all it doesn't cost you anything.

I found the best way to make clients is to build rapport and show your knowledge. I was fortunate to pick up 2 investors by simply being on top of things.

Allow me to eleborate just a little.

When I say "old friend", well, she is that but more importantly she's also a present and old client of the business I run. She's spent a considerable sum on my services in the past (not as a Realtor®). She is now married, and her husband owns several rentals and they just got a chunk of money and want to get several more investement properties. I think HE in particular is the one who doesn't want to use a Realtor®; he has purchased several investment properties in the past and apparantly does not see the need for one and may or may not be under the perception that using one will cost him money one way or another.

They are thinking they can spread their investment money farther by purchasing under owner-carry contracts and asked me to keep an eye out for those, but prefaced that by saying not to spend too much time or energy on it because they don't want to use a Realtor.

So there's some bias already in place. These are very nice people; I went to their wedding. I want to handle this very delicatly. I would like to gradually reel them in, so to speak, and help them understand that at least on a listed property, with commission already in the contract, using me saves them a bunch of hassle at a minimum. And does not cost anything.

Thanks for all the comments so far, guys and gals!

-jeff

Are they going to make out like bandits if they dont use a Realtor? From the sounds of it they do pretty well and want to continue to do so. Explain to them that it is the cost of doing business for the seller. And who will be representing their best interests?

Oh yes, always, but my broker says she doesnt want us to negotiate down!

I'm new but I've already come to understand that I can't put my eggs in one basket. A couple of very close friends have said, yes, I'll work with you, send you my friend whose gonna buy, etc, etc...but when I call them up, I almost get mad when they don't ever answer or return a call, now I don't call them, and use that energy for other work. I say be prepared to ignore the whole idea of working with her as an investor.

You can also explain to them, if the property is listed with an agent, that the agent will be working FOR the seller and AGAINST THEM. Don't they want someone to represent THEIR best interests?

And buyers also seem to conveniently not understand that the commission is negotiated between the agent and the SELLER. Negotiations to buy the house are between the buyer and the seller, NOT the agent and the buyer.

I think they see it something like this"

- "Why do I need a Realtor? Buying a home is not rocket science, and the heavy lifting is done by the title company and lender anyway!"

-"Realtors make thousands of dollars from the transaction. The home would be cheaper without those commissions being paid out to those semi-useless Realtors!"

-"Therefore, I can buy a home cheaper WITHOUT a Realtor, than with one!"

So the name of the game here is to help them understand that:

-if a home is listed on the MLS, the commission is already built into the sales price, so they are losing nothing by using me;

-While buying a home is not rocket science, it can be a royal PITA, and I can act as a $hit-shield/stress absorber for them in the transaction;

.... and anything else you guys can think of? I don't think the whole "who's looking out for YOUR interests?" has much resonance for them, because their reply would be "we are not babes in the woods here. WE are looking out for our interests! Duh!"

-jeff

Then tell them to go it alone.

How does that help?

Yeah, exactly! They are going to be buying 2-3 homes in the next 6 months. I figure out how to get in tight with them, that's $10k-$20k in commissions!!

I think the real root of the question is, how to keep the conversation alive, without getting pushy or salesman-y, when they get that deer-in-the-headlights look to them at the idea of using a Realtor.

-jeff

Jeff,
As someone else said you need to explain that helping them as an agent on listed properties will cost them nothing. Let them know that the listing agent is not going to share any of his commission with them so there is no upside to not being represented as a buyer of listed properties.

No for non-listed properties if you can find something that is a Really good deal then my suggestion is to try to get it for less with a 60 day option for you or your assigns . Then offer it to the investors at a markup for the profit you want to make. Remember that since this is an investor buyer the numbers must show it is a good deal at your markup price.

If they take it you just sell them the option and collect a check at closing.

There are a lot of people who once they have been though a few transactions that were smooth and easy, or it seemed like that to the buyers and sellers because we the Realtors made it seem that way, who think we add no value. Especially Attorneys, they more often then other professions, in my experience, seem to think they know it all, they have more then enough skill to get that house sold, to go though a house and understand what the real values are in a neighborhood.

I have also seen several of them get burned so bad that both cheeks of their a$@ were totally off. I don't know, I am about as honest as they come, They only time you don't get the strait and hard truth out of me, is when the law prohibits it when involved with a client, but the attorneys just seem to think that everyone is lying to them and so the don't want to trust anything they are told involving real estate.

Yes, commissions are negotiable, besides my 6% plan, I have 7 and
8% plans, would you care to hear about those?

Jeff- It sounds like your clients have it all figured out. Let them go at it alone. I would continue to offer market data, suggestions what not, in a limited way. Become an advisor to them, and future business will come your way.

Now, don't waste alot of time doing their research, if it gets to be to much, start charging a consulting fee for your time and expertise. If and when he needs a Realtor, you will the goto Realtor.

Don't look for the commission today. You will spook a potential investor client if you hammer him that he has to have a Realtor.
Build the trust and wait for a payout tomorrow.

You know what, that makes perfect sense. Thank you. These are old friends and clients of my "old" business... they are smart, successful people... that approach is the only one that makes sense.

It hurts, because they WILL be buying 2-4 homes in the next year... I'd like to get in on that action! :-)

-jeff

I picked up a investor today from a blog I wrote about Drew University expanding.

Jeff see above...Picked up a buyer from a blog...nudge nudge...now go get with it. Just email me if you want help on that.

But it's not like I like to write endlessly about my thoughts or anything!

:-)

I think a blog is perfect for me. I just need to find the time. In a sense, one more internet "addiction" to feed is ALL I need.

-jeff