Listing agents can be a hassle for real estate investors looking to get deals. Investors often avoid dealing with listing agents because they don’t know the best ways to handle them. Simply put, the way that investors and realtors do business is different. This inborn difference often causes friction in their dealings. Investors should learn how to work with listing agents efficiently as they can provide great opportunities for deal making. Here are eight ways that you can improve interactions with burleson listing agents.
1) Offers that are professional in nature
Realtors are often required by local associations to use approved contracts. It is unlikely that you will be able to use a contract for pro-buyer that you have bought from a real estate expert. Learn about the “customary” agreements used by Realtors in your local area and submit your offer on them. These contracts tend not to be neutral. They contain clauses and terms which can benefit both buyers or sellers.
2) Provide enough earnest funds
In a private sale, you could offer $10.00 to the seller as earnest funds. Agents will often refuse to let sellers accept any earnest money once a property is listed. Depending on how much you want to pay for the property, you might need to offer between 500 and $3,000 The requirement to present a check for each offer on a property you list does not mean you need to do so every time. Most standard Realtor contracts include a clause requiring earnest money to only be presented upon acceptance. Simply add the clause to your customary contract.
3) Avoid weasel phrases
Many gurus refer to weasel terms as “easy exit clauses”. They are used to escape from a deal if it cannot be closed. The purchase agreement may read, “This purchase subject to approval of buyer’s partners.” In reality your partner could be your brother or sister in law, who may not have any involvement in real-estate transactions. For several reasons you should avoid using weasel terms. First, you should try to close every deal. Second, utilizing weasel phrases will make you look bad in the business. Third, most skilled Realtors are able to recognize bogus clauses and will decrease your chances of signing great deals.
4) Set a reasonable close date
Listing agents prefer that closings take place within 15 to 40 days of your offer date. A seller who offers a longer closing period will have to wait for their money. The listing agent also has to wait. While you can test various closing dates to negotiate deals, it is still possible to offer short closings in order to entice sellers or listing agents into agreeing to your price and terms.
5) Always take the time for complete offers
There are some situations where a “letter to intent” is appropriate. In some cases it may make sense even to speak with a listing agent about a possible offer. In most cases, however, it is better to take the time and write a complete offer. Although verbal offers and letters may be accepted, sellers and agents might not consider it a serious offer. A full-fledged offer is more serious than a verbal offer. It must be presented to the seller by the listing agent.
6) Ask questions about seller motivations
Ask lots questions of listing agents you meet. This will enable you to find out the motivations of the seller and their preferences for terms. Asking questions is an important part of the negotiation process. Although listing agents can’t share the sellers situation with buyers without their permission, most listing agents will share the details with you if you ask.
7) Don’t be afraid making low offers
Novice investors are often scared of making “low” deals on listed properties. They may offend the seller. This is a major hurdle that new investors must overcome. Most offers will be rejected at 95%. Many sellers will also reject your offer. However, that’s part and parcel with the business. It’s a numbers-based game. Remember, acceptance is the only answer that matters.
8) Don’t forget to leave a message
Learning how to effectively end negotiations is important because most of your offers are likely to be rejected. You don’t want to offend another party by complaining or calling them slammed on the phone if a deal isn’t working out. Instead, try to be respectful. If the seller’s initial deal fails (which is quite common), they can contact you again. This skill can lead to many deals over your entire career as an investment real estate agent.