Newbie Question: Don't Use a Buyer's Broker When We're Buying?


#1

I just finished the Minneapolis bootcamp this past weekend and at some point I think Frank mentioned that we shouldn’t use a buyer’s broker.

If I remember correctly, the rationale was that we actually want to get the listing broker on our side by not cutting his commission in half…but there was a lot of info coming at us during the bootcamp and I may be mis-remembering.

I’m good with not using a broker during the purchase process, but just want to make sure I have my information straight.


#2

Correct, don’t use a buyers broker , it will put you at a disadvantage, you wont have a shot at any of the decent deals otherwise… and thats correct for the reason. Good luck


#3

Really can’t disagree more- particularly if you are a newbie. The caveat though is to have a buyer’s broker that specializes exclusively in MHPs. Every state has multiple and there is just too much at stake to risk relying only on the seller’s agent. Even if they don’t even set foot in the park and your relationship is merely over the phone… there are too many issues (all of which are usually addressed on this wonderful forum) that can come up and haunt you later. Once you ‘cut your teeth’ on your first park or two… then you will have enough savvy to deal on your own. Professional MHP agents know the parks in their regions and the histories behind them. They also know other agents and can advise of their strengths and weaknesses.


#4

@wlc3 , as per your question:

  • “Newbie Question: Don’t Use A Buyer’s Broker When We’re Buying?”

I am a Licensed South Carolina Real Estate Broker-In-Charge.

My Husband and I own 2 Mobile Home Parks.

I agree with @Propboy40

  • “Really can’t disagree more-particularly if you are a newbie.”
  • “Professional MHP agents know the parks in their regions and the histories behind them.”

If you are New to the Mobile Home Park industry, you really need your own:

  • Real Estate Buyer’s Broker

The Buyer’s Broker is there to protect you and your interests.

The statement that you should not use a Buyer’s Broker is because you might not get “Pocket Listings”.

“Pocket Listings” are Listings that one Real Estate Agent “knows” about, but these Listings are not publicly advertised (not on MLS). That Real Estate Agent will receive both sides of the Real Estate Commission (both the Seller’s Commission and the Buyer’s Commission).

In South Carolina when a Real Estate Agent represents both the Seller and the Buyer the duties provided by the Real Estate Agent are reduced.

Recently, I spoke to an Individual who said that they had a Mobile Home Park “Under Contract/Ratified Contract” (a Contract where both Parties agreed to all the terms of the Agreement). Since this Mobile Home Park was near one of our Parks, we took a drive through it. We also took some photos and sent them to this individual.

After this I then spoke to the individual on the phone who stated that they technically do not have a “Ratified Contract” and that they were still waiting on the Seller to sign the Counter-Offer. I asked how long his Counter-Offer was valid and he said that he would need to check on that.

There are just so many details to a Real Estate Agreement. One of the details is setting Dead-Lines (such as this Counter-Offer is valid for 3 Consecutive Days and will expire on “Blank Date @ 5 PM Eastern”).

If you are Newbie, please find an awesome Mobile Home Park Real Estate Buyer’s Agent to represent you and your interests. Yes, you might not get some “Pocket Listings”, but at least you will be protected in the Transactions that you will be in.

We wish you the very best!


#5

@Propboy40 and @Kristin - thank you both for your advice, and for giving me an alternate way of looking at this question - I think I’ll opt to use a qualified MHP broker on at least the first couple of transactions.


#6

I will just respectfully disagree with @Propboy40 and @Kristin

My preface is that its prudent to understand that you are the only one who should watch out for your own best interest. It is your job to have a proper understanding of reviewing the market, deal, park etc. If you become an expert in what frank and dave teach, read all of the forums, connect with other MHP investors, you can cover your bases quite well and may in fact be more knowledgable than some of the pros out there. If you do that bootcamp and do the due diligence guid from MHU, that is going to really be your best friend.

You are already settling for less because i think the better deals will typically be pocket listings so a deal that has a different buyers agent and different sellers agent probably didn’t get sold as a pocket listing for a reason (this is a blanket statement but shouldnt be applicable to all situations )

In Kristins example, you can use a competent attorney to navigate the steps from getting to talking about an offer to having a contract in place. In a lot of the instances , this should be the attorneys job anyway i would think (really you as a buyer should be on top of it as well) .

I am not saying that you should treat everything from the sellers agent as gospel , you will want to verify all items on your own. I believe i have read people on this forum who have used a buyers broker agreement exclusive and came to regret it so you might want to search that topic.

The market is already competitive and you want to have an edge anywhere you can , why put yourself at a disadvantage if you don’t need to?

This is a great forum so counter viewpoints are truly valuable especially for the new people reading through here so i think its great to get the posts from @Propboy40 as well as @Kristin

If anyone has any examples of success with utilizing a buyers agent with a separate sellers agent, i think it would be great to chime in here.


#7

I’ll give you a real world example of how buyer’s brokers work against you. I’m doing a $4mm deal in western NY right now and I have an extremely good reason to move the closing date from 9/12 to 10/1 based on how NY state handles leases. It’s a no brainer move to extend the closing considering the one single element that makes this deal work.

We have a buyer’s brokers (who I happen to like very much) who advised me to not mess with the closing date. He stands to make around $80k if this closes. This move is not in our best interest.

This does not change my opinion of the buyer’s broker and I still love doing business with him but you need to understand the motivations of the people involved in your deals. You need to figure out how to be in control at all times. If you can’t figure that out then you need to learn a little more before you get involved in commercial real estate.

A real estate attorney involved early on is worth 1,000,000X more than a buyer’s broker. We use buyer’s brokers occasionally but we do not rely on them for advise after the deal is under contract. That is not in your best interest. No hard feelings, business works on motivations.


#8

I think Charles and Jack bring up some very valid points supporting their positions. I do think though it is important to remember that one of the positives about this community is its diverse wealth of knowledge. Some of you are very very successful and very wealthy. You have built your empires through hard work and learning a lot of valuable lessons along the way.

For ‘newbies’… those trying to emulate your success they are getting into this for the first time. Some may have been able to attend MHU while others may be just reading and asking questions. And Jack’s point that with a few years under your belt you can negotiate and broker deals with the best buyer agents out there. But for many though… the experience level and real estate knowledge may not be as strong- particularly for newbies. Having an experienced park broker on your side would/could be beneficial.

And as Jack asked… here is an example why. My first park; rural farmland in a very very small town. Owner had both city water and irrigation water that ran from his well and irrigated his crops. At the time City only charged $25 per space per month for unlimited water. My agent had the wisdom to ensure seller would forever guarantee access to irrigation water for yards, gardens and common spaces at no cost. Fast forward 12 years and City is installing meters on city water. Little thing that comes from an experienced park broker that will save us several thousand dollars annually.

Same agent; same deal… walking park for due diligence and he notices a pile of river rock in the corner of the park. Asks the seller and his agent what it is for and we are told for the roads. My guy calls BS and discovers couple homes have impending septic issues… which allowed us to negotiate downward.

These are little things… but as the newbie I was I think there is a glaze that can overcome your vision in your passion to get your first park. Having a cool head and a calm hand to see things clearly is never a bad thing.

Now in full disclosure with a couple parks under my belt… I am cool flying solo with a seller’s agent only. But if I don’t trust the person or if something seems tricky… I will grab my phone and call my guy for representation. I will even tell the seller’s agent I will pull in my rep if I don’t like the way things are going-
there is some motivation for the seller agent. Yes we truly own our own deals… but if we cannot trust our buyer agent motivations- why would we ever trust a seller’s agents motivation.

Good comments all around here though and have no problem with people disagreeing with me. Learning every day…


#9

@wlc3,

Frank does suggest avoiding buyers brokers. When you use a buyers broker, you basically lose access to nearly every other brokers “pocket listings”. We love brokers and definitely work with them on a deal by deal basis but never as a sole representative. Hope that helps clarify our stance.

-Brandon Reynolds


#10

The way you don’t lose on pocket listings is by working with the broker who brought you the deal. Period. People who get shown a deal that is off market and send it to their broker to write the offer don’t get it. You can write the offer through the broker and let your attorney handle the important items related to the transaction.


#11

Hi Kristin,
I agree with you, since the selling broker/agent by definition represents the Seller’s interest first and always. Please contact me stevelboden@gmail.com since I’m looking in the Southeast. Thanks,Steve


#12

@steveboden , thank you for your message.

@steveboden , I have emailed you concerning:

  • Mobile Home Parks
  • For Sale
  • South Carolina

@steveboden , I appreciate you reaching out to me.

Just for the record…I was actually not trying to drum up business for myself :slight_smile: .

I am a Licensed South Carolina Real Estate Broker-In-Charge. I wrote that to be transparent and to show that I have a little knowledge in the Real Estate arena :slight_smile:

I actually focus on the following niche markets:

  • Mobile Home Parks
  • Dockable Properties
  • Timberland

My Husband and I own 2 Mobile Home Parks in South Carolina.

My Husband is my main Real Estate Client as I spend most of my time raising our 3, young boys and helping my Husband with our Mobile Home Parks.

I wish everyone looking for a Mobile Home Park the best on their journey!

It is my desire that everyone succeeds in the Mobile Home Park industry…your success…can only help to benefit others (including my Husband and me) in the Mobile Home Park industry!


#13

Great information let’s stay in contact as we can do business together

Email me your contact information please

Michael@strattonre.net


#14

Where are you looking I have many pocket listing thruout the USA ?

Let’s chat send me your contact info please

Michael@strattonre.net


#15

I am in full agreement with Kristin. I have a brokers license in both FL and NC. In fact, I am a Broker in Charge in FL and have plenty of experience. When I purchased my park in NC, I gladly used a buyers agent even though I found the park myself. My agent knew the area better than I and therefore was able to alert me to potential pitfalls that the Seller’s broker would never have mentioned. A conscientious buyer’s agent can be invaluable and I do not hesitate to use one even though I could enjoy the commission myself - the value a good buyer’s agent can bring is significant.