If you have completed less than 5 Real Estate investment transactions, 9 out of 10 times you need experienced and reliable Real Estate Agent or Realtor.
You might be weighing the advantages and disadvantages of hiring a real estate agent (quick answer the pros outweighed the cons). Some people will avoid working with agents or realtors because they think real estate agent fees are too high or hiring a realtor increases property sales price. Others wouldn’t hire one because they’ve had negative experiences in the past. However, this only emphasizes the importance of having a reliable and experienced agent to work with (not the cheap one). In addition, if the only reason you’re not working with an agent is to save money by not paying fees and commissions, then you’re overlooking the main pros of getting a real estate agent in your team.
What does a real estate agent do and how do they make your transaction easier? Here are the top 8 reasons why you need an investor real estate agent (Investor-Realtor) as a new or busy property investor.
#1 Investor-Agents Know What to Look For
As you are in the market to buy your investment properties, you need an experience investor-agent to guild you through the sometimes complicated and stressful house buying process. You’ll probably feel more comfortable running your numbers with a local Investor-Realtor that has more knowledge about the local market than you. There will always be properties that make sense to you but do not make total sense either because you are been emotional or you have insufficient deal analysis experience.
So the question is, which one of these homes will suit your specific investment criteria and goals?
If you’re buying a property without an experienced and reliable Investor-Realtor, then you’ll have to sift through all the available options yourself. You can imagine how time-consuming this task is. An experienced real estate agent (Investor-Realtor), however, will shortlist properties for you based on your investment criteria. Investor-Realtors typically know every house on the real estate market and it’s their job to find the one that fits your criteria and goals. The agent will also guide you through the buying process, making it smooth, stress-free, and possibly save you some money.
#2 Agents Have Extensive Market Knowledge Than You
No one understands current real estate market trends (The HIGHS & LOWS) and conditions better than agents. If you're a property investor, this is one of the main reasons and benefits of hiring an experienced local real estate agent (Investor-Realtor) within your investment niche. Rock Star agents are well-versed with all aspects of the housing market, especially how different factors like mortgage interest rates, industrial diversification, and the unemployment rate can affect it. They also have intimate knowledge of street-by-street and even house-by-house market, for both buyer's and seller's markets. Thus, they know the ins and outs of the market and know more details of properties for sale than the pieces of information found on the Multiple Listing Service (MLS).
The type of data they possess includes the median and average sales prices, ratios of list-to-sold prices, and average price per square foot of similar properties. They can also identify real estate comparable (Comparable Market Analysis) and hand this information to you, so you can make an informed decision quickly. Other market knowledge that only a local agent will know include which neighborhoods are near great schools, which neighborhoods saw the greatest increase in market value over the years, and what are the most promising projects in a given area. All of this allows investor-realtor to help you determine whether or not a certain neighborhood is good for your real estate investment or not.
#3 Agents Have Professional Networks
Real estate agents are professionals at networking. They know just about everyone involved in the process of buying and selling a house. Many will have a list of preferred providers who they have worked with in the past and who they trust. This is one of the advantages of having an investor-friendly agent in your investment team. For example, an experienced agent will provide you with a list of their approved Lenders, Inspectors, Contractors, Appraisal, CPAs, Attorneys, Property Managers, and other real estate professionals. Instead of researching these people individually and reaching out to them on your own, you can tap into your investor- agent’s network. This is especially beneficial for a new investor with less than 5 properties in their portfolio as it’ll help you start building your own network of professionals whom you can trust and rely on for future property investment deals.
#4 Agents Spot Potential Problems
Another huge benefit of having an experience investor-friendly agent in your team is that they will easily sport future issues that may not be apparent to you as a new investor. This will make your investment journey smooth and worthwhile and you don’t have to spend money and time on repairs that the seller should have done or negotiated for in your purchase price.
Investor-Realtors have trained eyes that identify potential problems that you may not see like neighborhood history, furnace issues, roofing problems, leaks, mold & insect issues. An agent will also have a home inspector provide a detailed report on problems with the house. A buyer’s agent will have a good sense of what’s reasonable repairs to request. Remember, your real estate agent responsibilities include protecting your interests, so this knowledge will help you save thousands down the road. Plus you as a buyer are not paying your agent, the seller is.
#5 Agents Have Superior Negotiating Skills
Buyers and sellers want one thing: to get the best real estate deal possible. To achieve this, you need to have savvy negotiation skills if you are representing yourself. Negotiating directly with a seller is difficult, which is another reason why use an experienced investor real estate agent. Realtors are skilled negotiators as they have years of negotiation experience under their belts. They know what normally works and what does not. Moreover, it’s your agent’s job to always strive to get you the best possible price.
They will use their analysis of real estate comps in the area to build a strong case so you can get top dollar. And, most importantly, they have no emotional stake in the outcome that can cloud their thinking.
#6 Agents Provide Home Staging Advice
As an Investor-Realtor myself, I have achieved a higher dollar amount just by staging a property with quality pictures. Your agent can handle that! The goal of home staging is to make it easier for buyers to see themselves living in the house. This will help find a buyer quicker and decrease your time on the market. And agents are pros when it comes to staging properties for sale and makes them look great to attract the right buyer. A top real estate agent knows what buyers are looking for and uses his/her tools and resources to make your home appeal to the most likely buyers. Whether it's moving furniture around or bringing in some of their own props, they know to make your home look like it's ready to be sold. This is especially important for Flippers looking to maximize their ROI.
#7 Agents Have Access to Off-Market Listings
Are you still wondering do I need a real estate agent to buy a home as an investor? Well, here's another reason why you need a real estate agent – access to Off-Market Listings. MLS listings and property search websites can show you an array of properties for sale in an area. However, there are cases in which sellers don't want the fact that they're selling to be widely publicized. So, they don't list their homes or put a "For Sale" sign on their yard. In those cases, only local agents are aware that the property owners are looking to sell and try to find you such properties. As you probably know, Off-Market Deals are mostly cheaper than those on On-Market.
Hence, one of the best ways to find off-market properties is by working with real estate agents especially the ones that also have a system of a platform for wholesaling (Investor-Realtors will always share off-market deals with their clients before sharing with customers and the general public).
Savvy investors know that these real estate deals are some of the best investment opportunities out there because they're cheap and have high ROI potentials. With access to both listed and off-market properties, your agents can offer you a wider selection of investment properties to choose from. The more options you have as a real estate investor, the better your chances of finding the best investment property that fits your criteria.
Note: investors can also find off-market homes for sale on the BiggerPockects Marketplace and Local Facebook Investment Groups. There, you’ll find a vast supply of off-market listings including foreclosures, short-sales, tenant-occupied rentals, Tire Landlord, and more.
#8 Agents Save Time and Energy
Closing a real estate transaction is typically a stressful and lengthy process. Working with an experienced investor real estate agents, however, can make the process easier for you. If looking to sell a property, the agent will handle open homes and showings so you don’t have to make all those appointments yourself.
The sellers’ agent will also filter all those irritating phone calls that lead to nowhere and, hence, help you in identifying serious buyers. If you’re a buyer, your agent will similarly protect you from being inundated with calls and the marketing tactics of sellers.
Moreover, the process of closing real estate deals involves exhaustive paperwork. This includes tricky contract documents, requests, offers and counteroffers, settlement statements, federal and state-mandated disclosures, and more. Most home buyers and sellers are shocked by the sheer amount of paperwork they need to deal with when closing a deal. You can make things a whole lot easier for yourself by having an experienced investor-realtor in your investment team who knows how to handle everything, makes the process more convenient, and ensures that nothing falls through the cracks.
A general misconception I hear from most newbies it that hiring a realtor will increase my purchase price or dip into my ROI, this is not true because 9 out 10 times your agent commission is paid by the seller which as already been factored in the sales price.
The Bottom Line
Whether you’re buying or selling a home, an agent/realtor is your investment friend. As you can see, there are numerous advantages of hiring real estate agents. I have only highlighted a few here. Keep in mind that agents and realtors depend on referrals to grow their business. This means they’ll make all their efforts to ensure you’re happy and satisfied with their service so you can recommend them to your friends and family. In addition, the agent you hire is going to be around for the long run and will be there for you when you need to sell or buy another property. This is a bonus benefit and one more reason why you need a real estate agent.
You can also bounce your investment ideas with your agent and receive honest feedback.
Thank you for reading and I hope this will help you make an informed decision as you continue to grow your real estate portfolio.
About Wale Lawal
Wale Lawal is an Investor-Realtor in the Houston, Texas area. He focuses on Single Family Buy & Hold, Wholesaling Off-Market Deals, Flip and Flip as needed. He works with in-state and out of state investors to start or increase their real estate portfolio through top-notch negotiation strategies. Because of his Engineering background and continuous quest for knowledge, he enjoys researching the state of the real estate market in different cities across the US. Wale Lawal also mentors new investors with less than 5 real estate portfolio by teaching beginner investors tips and strategies to gain the confidence and knowledge they need to make wise decisions.
@Wale Lawal . I love everything you wrote. Two things - one for a Buyer it does not cost them anything to work exclusively with a Buyers Agent, the Seller pays their brokerage commission.
The other point is to emphasis that the National Association of Realtors have put into law from May 1.2020 we, as members of the Realtor Association, cannot actively market off-market deals without putting it on the MLS. there are small caveats but we must list it within 24 hours of sharing the deal with the first person.
In the DFW market, the only off-market deals we see are wholesale properties that require All cash and no inspection period. In my opinion this is not the safest start for a new investor. Plus they have no representation if they buy a wholesale deal they are on their own. That is why you and I take the time to get licensed so we can work on behalf of our clients.
Thanks again for writing this post.
@Lucia Rushton sure you nailed it.
New investors are too cut-up with the analysis paralysis.
They try to save every dollar possible and totally forget that they are not the one paying their agent.