Real Estate Investor vs Realtor(R)
Real Estate Agent · Tucson, AZ · Member since 2018 · 27 posts · 11 votes
Great question, @Paul Juell! While it's always dangerous to generalize, I agree that there is often friction between agents and investors.
I've been an investor for nearly 20 years, and I've never been an agent. So, it's not self-serving to say that, most often, investors earn this resentment by not respecting the most valuable resource an agent has: their time.
Here's one example.
Agents work to earn a commission on a sale. Making offers is a necessary part of their process, but offers do take time to create. Now along comes a newbie investor demanding our poor agent make dozens of low-ball offers (just like the real estate guru told them to ...). Most of these offers will have ZERO chance of ever being even considered, much less accepted. The agent already knows this. So, if the agent does make the offers, they risk wasting their time and incurring the ridicule of the listing agents; if they don't, they risk the wrath of their investor client. So, the agent loses. And, the investor loses. And now, the agent doesn't ever want any more investor clients.
Of course, the challenges work both ways. I personally know an experienced investor who is also an agent/broker who could do a much better job outlining some of these issues (yes, I'm looking at you @Marta Brown!).
But mostly, I'd say lack of both communication and mutual respect are the root causes of the animosity.
@Paul Juell I'm going to follow this discussion. There seems to be quite a bit here, too, probably more against wholesalers. From my perspective it seems to come at least in part from jealously / entitlement.
Great question, @Paul Juell! While it's always dangerous to generalize, I agree that there is often friction between agents and investors.
I've been an investor for nearly 20 years, and I've never been an agent. So, it's not self-serving to say that, most often, investors earn this resentment by not respecting the most valuable resource an agent has: their time.
Here's one example.
Agents work to earn a commission on a sale. Making offers is a necessary part of their process, but offers do take time to create. Now along comes a newbie investor demanding our poor agent make dozens of low-ball offers (just like the real estate guru told them to ...). Most of these offers will have ZERO chance of ever being even considered, much less accepted. The agent already knows this. So, if the agent does make the offers, they risk wasting their time and incurring the ridicule of the listing agents; if they don't, they risk the wrath of their investor client. So, the agent loses. And, the investor loses. And now, the agent doesn't ever want any more investor clients.
Of course, the challenges work both ways. I personally know an experienced investor who is also an agent/broker who could do a much better job outlining some of these issues (yes, I'm looking at you @Marta Brown!).
But mostly, I'd say lack of both communication and mutual respect are the root causes of the animosity.
@Mitch Messer makes great points. I am an investor and also have my Real Estate license. I was primarily a realtor when I first got my license, but since my husband and I started investing I primarily just invest. I love being an investor vs being a realtor, but there are great things about each side. I completely agree there is lack of both communication and mutual respect. I agree @Paul Juell, as professionals we should all respect each other.
There's a saying I heard while earning my license, and that is buyers are liars. This is in reference to buyers saying one thing and doing another. From an investor side of things, it would mean someone asking to buy a property for investment purposes, have you show them around and send them info, then make no follow up to ever get a property.
Lots of established agents prefer working with sellers as they have more control over the process and it is less time-consuming. When dealing with any buyer, you as an agent have to show multiple properties and write many offers. As previously stated by @Mitch Messer, no agent wants to take the time to write an offer with no chance of landing. It ends up being an insult to the credibility of the agent making the offer, and a waste of time for both the listing agent and the seller of the property.
The common theme is that good communication from the beginning will get everyone much further along towards accomplishing their goals whether it be the agent trying to earn a commission or an investor looking to secure a property.
@Paul Juell That's a pretty broad brush you're painting with.
As a full-time Realtor, I have no objection to working with most investors.
The only "investors" I don't want to work with are:
1. The "new" wholesaler. He has stars in his eyes. His "guru" has sold him on the idea that wholesaling is completely legal and ethical.
It's not.
I don't want to list a property you "have" that's not owned by you. I'm not going to list a property when you have nothing more than an illegal contract with a distressed seller.
2. The "investor" that wants blast out large numbers of lowball offers. 70% of asking in a market where properties sell at an average of 98% of asking is a complete waste of time.
3. There really is no #3. Aside of #1 and #2, I want to work with the rest of them. Anybody who is willing to make reasonable offers on a property is my kind of client.
@Paul Juell Not in Massachusetts. Arizona might be different, though I suspect it's not.
I have spoken with a member of the Mass. Division of Professional Licensure / Board of Registration in Real Estate about this. This is the state regulatory agency and short of a judge at trial, they are the final authority in these matters.
I specifically drilled down on the concept of "I'm not selling a property. I'm selling my interest in a contract".
Her response was that MA law is unequivocal. Wholesaling - unless you double-close - is an activity that requires a Real Estate Salesperson's or Broker's license.
Read for yourself:
Real Estate Broker
'Real estate broker'', hereinafter referred to as broker, any person who for another person and for a fee, commission or other valuable consideration, or with the intention or in the expectation or upon the promise of receiving or collecting a fee, commission or other valuable consideration, does any of the following:
Sells, exchanges, purchases, rents or leases, or negotiates, or offers, attempts or agrees to negotiate the sale, exchange, purchase, rental or leasing of any real estate, or lists or offers, attempts or agrees to list any real estate, or buys or offers to buy, sells or offers to sell or otherwise deals in options on real estate, or advertises or holds himself out as engaged in the business of selling, exchanging, purchasing, renting or leasing real estate, or assists or directs in the procuring of prospects or the negotiation or completion of any agreement or transaction which results or is intended to result in the sale, exchange, purchase, leasing or renting of any real estate.
(Mass. Gen. Laws ch. 112, § 87PP.)
https://malegislature.gov/Laws/GeneralLaws/PartI/T...
There isn't even the slightest bit of wiggle room.
@Paul Juell I've been a real estate agent and, since 2005, I've been a full-time real estate investor.
Agents and investors actually have 2 very different jobs. Agents work retail, most investors work with sellers who cannot sell on the retail market. The way I work with agents is to have them call me when they go into a property that is too trashed to list on the retail market. The way agents work with me is to list properties that I have rehabbed to retail ready.
Investors and agents working together is the best of both worlds, but many look at the other as competition. We really aren't competing, we're working in the housing industry in 2 different capacities.
There are plenty of bad investors who give the industry a bad name, there are also tons of bad real estate agents - plenty of room for everyone to complain about everyone else.
But the complaints are unnecessary. We all have a job to do and a role to fulfill and homeowners who need the services we provide.
If you were in an investor setting, you would hear resentment toward RE agents just like you hear the opposite in your agent classes. Just the nature of humans, apparently. But don't let it taint your enthusiasm or your business.
There's plenty of business out there for all of us and we all need each other's support.
Good luck to you in your new endeavor!