I have been talking to Realtors for years on a daily basis in the Seattle area. I am sure this is true all over the country and all over the world- but here are 5 reasons why real estate agents will show you good deals but not THE BEST deals.
1) Foreclosures- Realtors won’t work foreclosures because they are messy and they don’t want to work for weeks and weeks and risk getting outbid at the auction. It’s too unpredictable and most agents are not knowledgable about all the intricacies, hazards and rights involved with foreclosures. Most realtors will not work with you to go out and buy a foreclosure- even if you can get a property 20-30% off retail.
2) Short Sales- Many Realtors won’t work short sales because they may take 60-90 days to close and they require a lot of paperwork and there is no guarantee the bank will honor the price. The same holds true for many preforeclosures. Some real estate brokers discourage short sales and distressed sales to their agents because of increased liability with the passage of a new Washington State law. Many Realtors ran up their lifestyle in the Bubble years and now are barely getting by to pay their mortgage and other expenses- so they can’t risk waiting 3 months to get paid on a deal that may not close- they would rather show clean retail houses and get paid in 30 days. (Makes sense).
3) Reduced Commission Listings- Some sellers will only offer 2 or 2.5% commission to the buyer’s agent. These listings might be good deals- but agents want to earn 3% or even 4% in this environment and may not show you listings that do not pay the full commission. It magically disappears off the menu.
4) Off the Market Deals- Some deals are done off the MLS (Off the multiple listing service). For-Sale-By-Owner listings and pocket listings may not get in front of you- if they do- they may be inflated with custom commissions. These deals also may go to clients that they owe favors to since they are not brought into the light of the open market.
5) Doing Their Own Deals- The very best deals do not get brokered- they get done. So- if a realtor finds a home run- sometimes these are passed along- but most times the realtor will seek to pull the deal of themselves or in a small closely held partnership. That’s reality.
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