The Real Estate Agent
and Foreclosure Bargains

Many investors would not consider a real estate agent as part of their team. Certainly not those pursuing foreclosed homes. We see them engaged in selling houses at the highest possible price, because their income is based on a percentage of the sales price.

We are engaged in buying real estate at the lowest possible price. How can a real estate agent, Realtor or broker help us in good faith? We feel there has to be a conflict of interest.

I, as have many real estate investors, have had difficult experiences with agents. A few were downright unethical.

However, the overwhelming majority of real estate agents are serious professionals of high moral character who work very hard, but honestly, to achieve the goals of ALL involved. I repeat. The overwhelming majority of real estate agents are serious professionals of high moral character who work very hard, but honestly, to achieve the goals of ALL involved.

Getting one of these professionals as part of your investment team will bring benefits unavailable anywhere else.

To be sure they are working on your behalf, make sure your agreement documents refer to them as the Buyers Agent. This way it is obvious to all involved, as to whom your agent is representing.

Many banks and other major lenders have discontinued the practice of issuing public REO lists. Instead they hire real estate agents, brokers and Realtors to manage and sell their REO portfolios.

REO is Real Estate Owned. Otherwise known as their foreclosure inventory.

Effectively, the only way to access a good portion of the available foreclosed properties, is through an agent.

In most cases the agent is mandated to get rid of properties within a specified time. They are also given the low end of acceptable price ranges.

So those worried about real estate agents being conflicted over giving you the lowest possible price, should be encouraged. This is because time is more valuable than price to the lenders. There are other major issues for a bank carrying foreclosures. Some of these issues outweigh price.

In this scenario, the agent has to move volumes of property to retain the confidence of the lenders. The only way to sell big volume, quickly, is to discount prices. The agent and bank will be willing to trade price for speed, but within reason.

Realtors have access to all properties listed in the Multiple Listing Service (MLS). Which is were millions of properties, from all over the nation are listed. This means they will have access and relationships with other agents. Agents who carry exclusive listings of foreclosed properties with other lenders.

Realtors can access and sell listings by other Realtors. When that happens, the listing agent and non-listing agent simply split the commissions. That means these professionals have unlimited access to every property listed in the MLS.

Sit down with an agent, broker or Realtor. Let them know what you are looking for along with your longterm goals. If you follow our instructions and get pre-approved, by a lender, please let them know this also. They will fight to get you the lowest possible prices if they know you will be a repeat buyer.

They clearly understand that 5% of ten purchases is much better than 5% of one purchase. One purchase is all they will receive from you, if you are not satisfied with their effort to get the best deal.

I will end this segment by making it clear that these professionals are invaluable members of your real estate investing team. As mentioned above, simply make sure all documentation state that the agent is the buyers agent.


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