Obviously realtors find customers and sellers all the time, in the end, that’s the only way earning a living. But, can they help real estate shareholders who have a different mind-set about buying and selling? Surprisingly, the solution is not a simple “Yes” because a much better answer is actually “Possibly”.
Let’s first look at the dissimilarities between real estate investors and realtors – state certified professionals who are required to uphold high specifications of ethics but no longer always, take training classes, either are or should be trained in advertising, spend some money to advertise, and maintain an office; however in the final analysis have no direct money put in the properties they sell. They are most benefited by getting the highest possible price for a property for which they receive a much larger commission. They earn a simple surviving in most all instances if the market helps them.
Investors, on the other hand, incorporate some similarities but not many. Investors only desire a driver’s license to work, should uphold high standards of ethics but don’t always, take continuing educational training because they want to, generally are not trained in selling considering they are purchasers, have overhead and bills, but do not have to maintain an office, and in the last analysis they take the risk and responsibility of owning a property to make a profit. Buyers must pay the best possible price for a house to make revenue; they are not assured a commission as a realtor gets for a customer. The only promise for a buyer is a learning experience – good, bad or ugly. Investors can make great livings even in the worst of market conditions.If you are going to invest in real estate you have to read this it will help you a lot 5 Ways to Get Ahead When Investing In Real Estate.
Having arranged the stage for the variations between investors and realtors, let’s look at specific samples of properties where investors are usually involved:
- Bank-owned properties (REOs) – the banks want a realtor to list these properties and look after the resulting investor inquiries and offers. Agents have an easy time with new listings as investors who are rehabbers or newcomers swarm to get these deals and bid against themselves in a crazed frenzy. WARNING- if you use a buyer’s agent to make offers on REOs it is very unlikely you’ll the discounts. Simply put, your chance agent will not break up the seller’s commission. This kind of may offend buyers’ providers, “But even stipulating that you will not get the buyer’s commission from the seller’s side, will not work almost all of the time.” Do yourself and your investor clients a favor and don’t bet for these people. Have the buyer pay you a shopper’s commission on the HUD-1 Statement. I suggest you only tell the final agent after an agreement has been signed by the seller (bank’s Property Manager). Also, the previous listing price on the MLS becomes a cup ceiling for the entrepreneur if he wants to wholesale it so do not think you can just re-list it unless he does indeed substantial repairs to it.
- What about a MLS listed property in general? If this has recently been listed on the LOCAL MLS more than five days and nights, it is “price tainted” as the periods on the market (“DOMs”) get larger and larger. Ultimately it is merely for a retail buyer to buy it with conventional financing – not what your investor is thinking of unless he bought it substantially lower. If the property has a price reduction it can be a buying opportunity, if the retailer is actually motivated. However, as always, any realtor can also see this post on and be upon it with a retail buyer. While a realtor you are better off to become an investor or spouse with an investor to earn more money on deals that are “pocket listings” or direct seller contracts with motivated sellers. Personally, my spouse and I believe pocket listings are unethical for the vendor could likely get a higher price in the open market in addition to some states these are another degree felony for the customer and the realtor.
- As for Realtors finding buyers for investor properties, undoubtedly that the MULTIPLE LISTING SERVICE is the spot for many retail buyers to find their dream homes. As investors selling inexpensive properties, the benefit for the MLS is getting experience of other investors searching for bargains. Usually these are newbie’s who believe what a realtor has advised them about finding bargains there. The frustration for the realtor comes when the investor doesn’t think it’s a deal and doesn’t’ buy it. Actually worse is when really not just a deal and the investor does buy it simply to learn just how much money can be lost on an one deal. If it is such a deal, “Why don’t the realtors purchase them? “ – Basically because they don’t have the money (not successful enough or don’t understand doing “no money” deals) or they won’t take the market risk – both are opposite to trader thinking.
You may have gotten the idea that I am anti-realtor but that isn’t true by any means. Some of my best friends are realtors because they’re also investors. This is in the best interest of any buyer to spend a little while before getting involved with an agent so both get-togethers understand how they may operate and what is expected of both parties. If perhaps the realtor “gets it” they will not want to chase listed properties for the investor, if the investor “gets it”, he will realize the realtor has no special ability that he will not have and the Best Real Estate agnet in Tampa FL is handicapped by his license.
These types of comments and analysis signify my opinions only and are based solely on 34 years of trading experience and having proved helpful with numerous realtors(R). In general, realtors are hard working but disrespected individuals because their commissions are fully disclosed to the buyer/seller. Few other sectors have this burden to answer to with sellers’ question of, “What are I paying for? Inches Realtors(R) have the capacity to become great buyers but the few who do generally drop their licenses because of impractical legal restrictions. This is not a mirrored image of any other investors’ opinions.