How Real Estate Investors can use Realtors. Post 228

Coach Mitch’s REFLECTIONS™

According to realtors, the Multiple Listing Service, MLS, is nothing less than the G-d like vehicle that will sell your property.

There is some justification to this claim as, according to realtors, some 80%-90% of property sales are made with the help of the MLS. That is pretty good. Anytime that you can claim 90% of anything, you have to be considered a player.

I always consider utilizing a realtor when selling properties.

I have mostly finished getting a property ready and decided to put it up for sale.
First, I put out my sign which says, “FOR SALE – Brokers Protected – phone.” See the sign in the photo on the right side panel, second picture down, labeled 3005 Albany St.

Next, I did a For Sale By Owner, FSBO, listing on Zillow.

I wanted to see if these methods would get noticed by realtors, and they did, and by some substantial realtors. Not surprisingly, several of the top realtors in the area called me about representing the home, and I chose one.

A main need was to find a realistic price for the home and realtors can provide that.

Why did realtors notice my home on Zillow?

These days, the more successful realtors lead a team. They have at least one helper who does the grunt work while the realtor does the more important tasks.
This makes sense as it is well understood that the principle should do the $100/hour work and delegate the $10/hour work to $10/hour persons.

The delegated work includes looking at all the FSBO real estate sites where folks can list their homes and try to sell it themselves, thereby saving the 4%-6% commission that realtors charge.

Realtors want listings

The workers saw my FSBO listing, informed the realtors, who promptly called me to schedule a “walk through” to view the property to potentially sell it to clients that they have. What they really wanted was to speak to the owner to list the property.

Listing a property is a very important aspect of a realtors business. They want the listing because, as the “listing agent” it guarantees that they get 50% of the commission when the home sells. The “selling agent” gets the other 50% of the commission when they “show” a listed home and that customer buys the listed home.

Many realtors focus on one part of the business, either listing or selling, because their personalities are better at one than the other. The better realtors do both listing and selling, and as a result, they get the entire commission. And that can be a real nice payday!

Example of a typical Realtors commission:

A $200000 sale at a typical 6% commission results in a $12000 windfall. Every real estate investor would love to make that.

I have a standard

Based on the conversation, I chose which realtors I would spend time with.
I didn’t want to spend time with newbie realtors who have energy but do not have the customer base, the network, the support, the knowledge to aggressively pursue a sale, nor the stamina and mental toughness needed to continue despite any lack of success.

Even good realtors differed on the value

Several of the top realtors in the area vied to represent the property. Interestingly, their opinions differed significantly on the value of the property.
Zillow said the property was valued at $207000 and a few weeks later raised it to $217300. Knowing the neighborhood, I was skeptical and listed the FSBO home on Zillow at $187500.

One top realtor said I should keep it at Zillow’s $207000, but another top realtor said that he wouldn’t be comfortable listing it for more than $160000. My wife agrees with this realtor.

Why hire a Realtor?

As a knowledgeable and experienced real estate investor why would I even consider hiring a realtor? Why wouldn’t I just market the property myself and save the commission?

The answer was given in the beginning; the MLS is looked at by 90% of buyers. I cannot do enough advertising to overcome that advantage.

Getting into the MLS

Getting your property listed in the MLS is a big deal. These days, many FSBO sites have become Associates of the MLS and are allowed to list homes. They charge the FSBO seller $300+500 to list the home in MLS.

Also, there are in every market, regular realtors who will charge a set fee of about $500 to put your home into the MLS. Becoming popular are brokers who will offer “full service” brokerage for a 1% fee. This seems good, but don’t forget, the “selling agent” gets 3% to bring his buyer to you so it will still cost at least 4% in commissions plus the $500. listing fee.

What realtors do

Typically, a selling agent will see the property, determine that it might be viable for one of his buyers and seek to get a listing. If the FSBO seller does not wish to list the property then the selling agent will ask for a listing to show the property to his buyer, and if the buyer purchases the property, then the selling agent will be due the selling agent’s commission of 3%.


With the MLS exposing itself to 90% of buyers, there is a very good chance that I will be paying a 3% commission to some selling agent. IMHO, it is worth this 3% in order to sell the property to someone who can actually buy, that is to say, the buyers have almost certainly been mortgage qualified to buy at the price needed – otherwise, why bother showing the property?

Therefore 2

Since I will almost certainly have to pay a 3% commission and I will have to pay at least $500 to get a listing in the MLS, which is .25% on $200000, making it at least 3.25%, I think it is worth the other 2.75% to engage the talents of a successful realtor.


A good realtor is a very valuable asset to have on your real estate investing team.
In the course of doing business, a realtor runs into many situations that might be of interest to you. If a realtor knows that you are a person of action, then they will tell you about a situation before they tell someone else.

Additionally 2

Your realtor will be on the lookout for the kinds of property that you want, i.e. tax delinquents. Don’t forget, there are only three things a typical tax delinquent can think of to do to save his situation: 1. Refinance the home, 2. Borrow from friends and family, 3. Try to sell the home.

When doing due diligence, the realtor should find out that the home is tax delinquent and you could be his first phone call. WoW!

Additionally 3

Your realtor can help you immensely. Here are just a few ideas: 1. The realtor can get you a list of buyers that paid all cash for the property, 2. The realtor can introduce you to their network of contractors, lawyers, property managers, etc. 3. The realtor can give you counsel about areas, upcoming events, projects, crime, etc. 4. The realtor can do basic MLS property searches, looking for words like “distressed owner” etc. plus much more.

Have the best of both worlds

How to use the realtor and how to sell the property yourself – at the same time.
Contracts are great things. You can create anything that two people can think up and, as long as both agree, you have created a legally binding agreement.

IMPORTANT: I can also sell the property

My realtor agreed to a “non-exclusive” listing agreement and a “day to day” term. Non-exclusive means that the listing agent does NOT have the exclusive right to sell the property; I can sell the property and not pay a brokers commission. It used to be that the typical length of a listing was one year, but at least six months. These days the term is often much shorter. A day to day term means that I can cancel the listing at any time and for no reason at all – should I desire.

For the potential charge of a nominal 2.75% brokerage fee, I get the best of all worlds:

1. I can utilize the marketplaces best advertising vehicle, the Multiple Listing Service,
2. I get a team of professional salespersons to work on my behalf. If they sell the property I happily pay a 6% commission.
3. At the same time, I can market and sell the property myself and not have to pay any commissions at all, and
4. I can cancel the listing contract at any time, without any penalty.

This arrangement seems like the best of all worlds to me.

If you agree with my logic then perhaps you should consider calling Coach Mitch  See the number below. I love talking about real estate investing and sharing ideas. Maybe you will see the benefits involving yourself in Coach Mitch’s “Ridiculously Simple System…”&#8284

Stay committed to your success. Until next time…

Mitchell Goldstein - Coach Mitch
518-439-6100 until midnight EST


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