Using listing agents for buying foreclosures to flip can provide you with a tremendous amount of leverage. This eliminates a third party agent that would be receiving a commission. Typically, a listing agent lists the home but does not sell it. There is usually an outside real estate agent bringing in the buyer.
If an agent lists a home for $100,000 with a commission rate of 6% and an outside agent brings the buyer, the commission would usually be split between the two realtors.
Because of the power of the multiple listing service, selling agents usually bring a buyer to the property. The multiple listing service is a service provided by an association of realtors. Licensed real estate agents input listings into a network so a large scale of members can have access. Therefore, the listing has a tremendous amount of exposure.
If the selling agent is eliminated, the listing agent is considered the 'dual agent' and receives full commission on the property. Listing agents are absolutely thrilled to be a 'dual agent' because they receive double the commission at closing. Their clients are thrilled as well because they
do not have to deal with any other parties.
When an agent becomes the 'dual agent', it provides an opportunity to the investor. The agent can decrease the commission rate. If asked to do so, the agent may reduce their commission rate by a percentage or two.
I have had lenders accept my contract over other contracts on foreclosures I was buying to flip even when I wasn't the highest bidder. This is because agents willingly decreased their commission when they were 'dual agents' on foreclosures they listed.
Successful Investing,
Jeff Knize, CRA, ICAP member
www.foreclosuresandflips.com
www.uspropertybuyers.com
About the author:
Jeffrey Knize is a certified real estate appraiser, appraisal firm owner
and real estate investor. For nearly a decade, he has been known for
appraising REO properties, pre-foreclosures, foreclosures, investment
and distressed properties for top lending institutions.
In-addition, he is the author of 'Secrets for Success in Foreclosures'.
Jeff is also an advisor for investment club members and entrepreneurs
throughout the country. He has also bought, sold, appraised and/or
reviewed tens of millions of dollars in real estate.
