patrick.net

+1 to what Nomo said.

knewbetter,

I was pleased with "do-it-yourself" approach by paying a lawyer who specialized in such matters. However, I also concur with Nomo about the ethical realtor. I know once such fellow in San Jose who I may very well work with when the time comes.

This is beyond the scope of your question, but did it occur to you that if there's bidding wars going on, that it's probably too late for someone like you for it to be a good value proposition?

Please read "Devil Take the Hindmost: A History of Financial Speculation", by economics writer Edward Chancellor. There's another book written by an economist that I haven't read that I think gives the same overall conclusion, with "Madness of Crowds" in the title. It is not Cool and Hip to go into the library to read some dry economics tomes about the mistakes people have made in the past but it can give some valuable perspective about what can happen to the folks who buy "assets" during bidding wars.

For myself I haven't yet noticed a frenzy to "get in" on a deal or investment or career path that didn't turn into a disappointment for all except the few who were already there before the frenzy. In other words, they are not really investments anymore during the "bidding wars": they are speculations.

Maybe a different path, one that requires some nose to the grindstone effort and is not nearly so glamorous, is to become a property manager to learn the trade and the ropes and be able to identify the "real bargains" before the bidding war, when the asset in question really is a good value. Thought about this myself; I have a friend in San Diego who has been a property manager for over a decade; he already knew before the "madness of the crowds" when to get in, when to get out, etc. His bread and butter has been managing other "specuvestors" properties, but when he knew the time and value was right he was in and out of some of his own, too.

Good luck.

knewbetter,

Another thought about this, if you want an investment property and you are new enough to it to be asking the questions that you did:

did you consider going into a partnership with someone who has a lot more experience doing it?

I had a friend who worked at a bank. She used to let us know when something was coming up. All you need is a P&S from Staples, then find a title agency. Realtors are worse than useless when you know your market. I seriously don't need someone to help me with 4th grade math.

Can you seriously tell me of a veteran real estate agent worth a damn who's still wasting their time as a buyer's agent?

sybrib says

knewbetter,
Another thought about this, if you want an investment property and you are new enough to it to be asking the questions that you did:
did you consider going into a partnership with someone who has a lot more experience doing it?

I'm all set. I owned at one point 3 rental properties, but sold them to "investors" willing to hand over 30 years worth of cash flow in one check. The bubble caught me off guard. I expected to keep each property but when somenone is willing to pay your a number that surpassed your wildest expectation of what the market would support for rent, I cashed out my little chips. I was getting phone calls weekly from property management groups: Weekend speculators, some out-of-state. All these idiots are now folding, and I'm watching them lose their buildings one at a time because they were over-leveraged, or never expeceted to lose a single month's rent payment.

Now I'm starting to see/hear deals, and I've got cash. My hook-up is now unhooked, and I'm doing something wrong because the banks around me won't give me a bank-owned listing sheet. I'm getting 800 numbers for national offices.

Anybody have any luck actually BUYING something without a realtor?

While it is possible to complete a RE transaction on your own, it is in your best interest to use a buyer’s agent who costs you nothing and has a vested interest in shepherding the transaction to completion. The trick is not how to bypass the system, but how to use the system to your advantage.

I've tried it, but so far I haven't made it out of the office with any hope. After 1/2 an hour of talking about what I'm looking for, looking through the agent's own listings, I decline an offer to sign an exclusivity contract, then I start getting emails about 90 day old junk in the combat zone, reminding me about an $8000 credit I'm not eligible to receive. After 3 I got an honest one, who let me know if he saw the deal I was looking for he'd buy it himself.

buyer's agents do cost you by raising the price of the home. Go without a realtor unless the seller already has one for the property. If you feel you need it, get a RE attorney and you'll only pay for the actual time he/she works for you, rather than a percentage of the sales price for doing nothing. knewbetter says

it is in your best interest to use a buyer’s agent who costs you nothing and has a vested interest in shepherding the transaction to completion.

Nah.

knewbetter says

it is in your best interest to use a buyer’s agent who costs you nothing

Dunno about that. While there is work involved in dual-agency, if the listing realtor isn't willing to cut a deal on the commission, then they aren't doing a good job getting the best deal for the seller.

Since only the buyer is bringing cash to the closing table, everybody getting paid in the transaction in getting paid by the buyer.

Also in a slow market, one can just notify the seller that you are willing to buy if & when the listing agreement expires. Listing agents can only get clawbacks from buyers they actually worked with, the MLS posting isn't enough, nor should it be for a 3% commission.

It is in your best interest to use a buyer's agent.

WHOA WHOA WHOA!!! Those words have never crawled forth from my lips in said order. I believe I've made my opinion about realtors abundantly clear.

One step below useless.

knewbetter says

After 3 I got an honest one, who let me know if he saw the deal I was looking for he’d buy it himself.

bingo. RE agents were thick on the ground making deals during the boom. I ran into one on a ski trip in Tahoe in late 2005, with something like 20 properties on his string. I wanted to punch him in the mouth. I've been to Maui several times and the RE agent economic activity is just sickening. What a worse than useless profession.

however, we've had many hours of mirth over the past few years discussing their value. So they do serve a purpose - and we got it for free.

it just cost the rest of the country hundreds of millions of dollars.

I'm honestly surprised realtors are still in business. I don't remember what it was like for travel agents, I just remember driving by their shuttered offices. maybe because they feed a lot of mouths: lawers, inspectors, movers, mortgage brokers, ect.

The model is going to have to change. Realtors making 5% is going to by the wayside.

>>WHOA WHOA WHOA!!! Those words have never crawled forth from my lips in said order.

But Nomo wrote it and you gave him a +1 thumbs up. Must not have meant that, did you?

I think Nomo is usually sensible, but this time he was quite wide off the mark.

There still are to many of them out there.

I cannot wait to see how creative they will become the supply of "victims" er I mean buyers disappears.

I like to use this approach when interviewing real estate agents. I know the answers to my questions ahead of time but I act stupid. Then it is easy to figure out who is lying.

Exactly. Any honest realtor who is smart enough to represent someone who has read this sight will tell you in the first interview that if they found the deal you are looking for, (cash flow positive and all that) they would buy it themselves or at least sell it to someone who they have done a bunch of deals with in the past and already made some money off of. A new customer off of the street means they have no loyalty to you. You are better of on your own.

RE: Nomo's point.

Nomo is an honest professional at his job and I beleive Nomo feels all true professionals operate in an honest manner. No true professional will step over their self-respect for a buck.

So, in my opinion, the reason Nomo gives the REpukes some credit is he feels they are true professionals. Many do not see any REpuke as a true professional. I view them as usedcar salesmen dressed in better clothes, trying to sell used-houses. Not professionals.

Fear not Nomo, I've got your back on this one.

justme says

>>WHOA WHOA WHOA!!! Those words have never crawled forth from my lips in said order.
But Nomo wrote it and you gave him a +1 thumbs up. Must not have meant that, did you?
I think Nomo is usually sensible, but this time he was quite wide off the mark.

That was seaside.

So, Nomo is a realtor? So If I walked into his office with a fist full of cash would I get the deal he's been waiting for himself? I could see using a realtor to sell a house. I honestly could, because you don't want to have to be available for showings or you're nervous about open house or you're not the kind of person who know when to keep your mouth shut (like that time a tree branch came through the window, or the time when the neighbor's kid was caught for growing weed, bla bla bla.) That I can understand. Got a new job in a new state and its time to move and you can't wait. Great, but that house you bought for 100k 20 years ago IS EASIER TO SELL NOW THAN IT WAS 20 YEARS AGO, so why should the real estate commission be 15k now when realtors could still make money 20 years ago at 5k?

Their ace in the hole for the past 40 years has been the MLS database, but its getting pretty easy to reverse engineer that info. In 2005 my father's good friend ( a veteran of 20 years in the biz) gave my parent's house of 32 years a market analysis of $160,000, only 30 grand more than his last appraisal in 1988. Because there were so few sales in his neighborhood it was difficult (so he says) to pull comps, but he felt confident that he could find a buyer at 160k. I immediately told my dad I would buy his house for that much, because I told him I could flip it for $250k. He didn't believe it, so I pulled comps from the MLS, pulled copies of tax assessments, and showed him his own appraisal from the town listed at 210k. After hearing this of course, my dad withdrew his offer to sell me his house for $160k, and approached his friend about perhaps rethinking his market ass-essment.

Long story short, he sold in the Spring of 2006 for $259k. His friend was still the realtor, but suddenly in 4 months the market had "readjusted upwards". I'm still pissed. Yes, these are all anecdotes and I'm sure there are smarties out there, but honestly a smartie is not what I'm looking for, because a smartie would buy what I want for him/herself.

I don't think Nomo is a REturd, I am pretty sure he is a doctor of philosiphy and a programmer or high-tech stuff. I did not mean to make it sound like Nomo is a REturd.

As a buyer, you won't pay a penny, he will bring some info for your lazy ass, he will do the talking and paperworks, you can fire him whenever you wanted. That's the good part.

One thing you should know is that the realtor is no beginner in this game. He'll try to hook your nose up on something before he gets started, then become lazier than you, and will work behind you for the commision that seller's agent will split for him. That's the reality.

A friend of my wife bought a home and she's very happy about the outcome. The wife asked her how she found the right realtor among the suckers, and she said. I went to openhouse for monthes not to shop the house, but to shop the realtor.

That is one of the ways I have found realtors by going to open houses. Then of course test them to see if they are someone you can trust. But continually test them as many will start playing games if you're not continually riding them.

@OCmonitor

Do tell us more! (I love these stories).

These are the funniest postings Ive seen in a while. Investors who dont have a pot to go in comparatively, asking the bank to give them the time of day...why would the bank waste their time? THATs why you need Realtors, to deal with small time-ers who talk too much and act too little, get over yourself and your supposed knowledge of what the real estate market is doing and go learn how to get a great deal on your own instead of trying to find out which deal the REALTOR would buy so that you can buy that one. You are contradicting yourself in asking the Realtor to give you the one they would buy! Realtors either know a good investment or they dont. Which is it?

I love it when I find people who have bought and sold three properties (probably with a Realtors help)and think they are now the saavy buyer.

In my opinion, if its on the MLS and you need the seller to clear title for you and make the deal pretty so that you have no risk, then you will have a hard time finding a "good deal" The bank puts these on the market with full knowledge of what the property is worth and what is wrong with it - contrary to popular opinion. Either find some money and buy a portfolio for pennies on the dollar or fight with the commoners for the "left over" properties on the MLS.

PS- The listing agent is getting the full commission or splitting the commission, the SELLER has nothing to gain by you going directly to the listing agent. However, YOU have everything to lose by going direct. YOU need to be represented.
Its like saying, I am going to go to the plaintiff's attorney for representation because then the plaintiff will see things my way- and I'll pay the attorney nothing, the plaintiff will pay the attorney- and I'll expect the attorney to do double the work- for less pay because I want him to give me a part of the retainer. Doesnt make much sense...

Maybe you should get your real estate license so you will have some real idea of what you are doing. LOL.LOL.LOL.

david1 says

A new customer off of the street means they have no loyalty to you. You are better of on your own.

That is another line they use on you. Loyalty. A Realtor friend of mine says that the ones who are loyal, he will keep looking with them. For the first time customers he runs into, he quickly goes in for a hit and run to get the commission. He knows that if he doesn't earn a commission from the first time customer, that there may not be another chance. The loyal one will always be back.

I had an agent write an offer for me before against his own client. Sadly, we both didn't get accepted and we never spoke again.

Had my offer been accepted, he would have gotten my commission, and his loyal buyer would still be making offers with him.

Working with an "ethical" realtor is a myth. The only way they will be honest with you is if they are a very very close relative that you personally know you can trust.

Lets not be gullible please, this industry is made with kickbacks and references for business.

Here is our personal story:

Years ago when my wife and I were looking for a house (as we were new to the market at that time) we simply looked up an agent. Her day job was a high school teacher which we thought would make her somewhat caring. She sold real estate when she either was on vacation (3 month out of the year) or simply after work (after 4pm).

She kept on showing us all the overpriced properties back then, asking us to bid a lot more than we thought the place was worth. She wanted us to go with a specific loan officer at the bank of America "because he was a good friend of hers" (which translates to kickbacks). She wanted her husband to be contracted as inspector and a guy who could fix all the things that were wrong with the place she was showing us. (again more kickbacks) It was shady from the beginning. So to be prudent we took a second and third independent opinion from other agents and a good friend of mine who is a contractor, which proved that our agent was full of it. Needless to say we broke that relationship.

There were some other pretty unpleasant scenarios, but bottom line we stopped working with real estate agents who are just the crony middle men. Realistically they do not provide any service, their entire business is based on them being a middle man leech and the fact that people are ignorantly think that only way to buy is by going through an agent.

If you want to bypass a real estate middle man (and you really should), go straight to the owner. It will save you and the seller money since you are no longer dealing with a 6% commission for absolutely nothing.

girlintheworld says

Realtors either know a good investment or they dont.

realtors don't know their ass from their elbow, let alone possess any sophistication about the market. I'll trust my own valuations, statistics, and analysis. They get their 3% for opening a door.

girlintheworld says

I love it when I find people who have bought and sold three properties (probably with a Realtors help)and think they are now the saavy buyer.

If they chose those houses, what exactly did their savvy realtard do for them? Put info in database, fax papers, open door.

girlintheworld says

The listing agent is getting the full commission or splitting the commission, the SELLER has nothing to gain by you going directly to the listing agent.

Yet you don't see the problem with this. If I don't need a buyer's agent, the seller's agent should not get to double-dip on their commission. The only reason it's set up this way is because NAR "recommends" their brokers sign a full commission agreement with sellers so that buyers who choose to bypass the worthless buyer's agent route won't disrupt the revenue stream. The only thing that makes this unethical and inherent conflict of interest not explicitly illegal is that there isn't a mandate from NAR to do this. Of course, so long as 90% of the dumbass public isn't aware of it, they don't need to.

But thanks for pointing out just how corrupt the system is.

girlintheworld says

Maybe you should get your real estate license so you will have some real idea of what you are doing.

Maybe some people don't want to pay thousands in realtard dues to fund a criminal enterprise. After all, what's the point of getting a license if you're not going to find brokerage without your NAR card? realtors are pond scum.