What Does a Real Estate Agent Do For Investors
What does a real estate agent do for you, and are they worth the price? As an investor starting out, real estate agents are worth the price and more. But, what does a real estate agent do that you cannot do yourself?
Real estate agents facilitate the investment process from start to finish — from locating properties to drawing up contracts. They also increase the return on investment (ROI) on newly renovated properties. In fact, the average real estate agent listed property will sell for $60,000 more than the “for sale by owner” price.
What does a real estate agent do for you as an investor? Read on to learn how a real estate agent can facilitate and simplify the investing process for you.
Real Estate Agents Are Not All the Same
While it may seem like any real estate agent has the credentials to do the job, not all real estate agents are the same. Just as a doctor can specialize in one type of medicine, real estate agents specialize in different ways. Additionally, real estate agents who are specialized will market it clearly.
There are many specializations for real estate agents, but here are the ones that are more important for real estate investors:
- Realtor — A real estate agent with this title is a member of the National Association of Realtors. Many real estate agents may claim not to know whether they are realtors or not (if they don’t know if they are a realtor, they are not one).
- Buyer’s Agent Only — This is also sometimes called an Accredited Buyer Representative (ABR). They have completed specific training to represent buyers in real estate transactions.
- Seller’s Agent Only—This is also sometimes called a Seller Representative Specialist (SRS). Perhaps unsurprisingly, they specialize in representing sellers in real estate transactions.
- Certified Commercial Investment Member (CCIM) — CCIM is a certification indicating a recognized expert in commercial and investment real estate. They are experts in theory and practice.
- Certified Property Managers (CPM) — CPM certification indicates recognized experts in real estate management. 70% of those who hold CPM certification hold the highest management position in their offices, so CPM is an indication of expertise.
These are the experts you will work with when asking yourself, “what does a real estate agent do for investors?” While agents can get many different certifications, the National Association of Realtors provides the most important certifications.
The general term “investor-friendly agent” refers to those agents who invest in real estate for themselves and are willing to service other investors. It is commonly accepted that investor-friendly real estate agents specialize in real estate investing.
Plan to gather a team of one or more investor-friendly real estate agents and real estate specialists to facilitate your real estate investment transactions.
What Does a Real Estate Agent Do for Investors?
How Does a Real estate Agent Help Investors?
A real estate agent helps investors at every stage of the real estate investment process. They will stage and show properties, draft and prepare paperwork, locate target neighborhoods and properties, or locate tenants on a rental property — and more!
When it comes to real estate investment, a real estate agent makes the whole process smooth and seamless for investors.
Why Are Real Estate Agents Needed?
Unless you have extensive real estate experience, a real estate agent is needed to ensure all the steps are followed and boxes are checked in an efficient manner at every step of the transaction. This includes all the paperwork and legal documents needed for properties to change hands and coordination with the title company to ensure a clear deed.
Real Estate Agents Help With the Transaction Phase of Real Estate
You could have the best property in an ideal neighborhood, but without an interested buyer and an extensive knowledge of the transaction process, the sale won’t go through. That is why real estate agents are so important!
Real estate agents help with the transactions of real estate when properties change hands. This includes the entire buying and selling process — from showing a property to the extensive documentation on closing.
The Difference Between an Investor Who Is Buying vs. Selling
A real estate agent will perform different roles for an investor who is buying and one who is selling. The specialized knowledge of the buying and selling processes and the ability to facilitate the transaction will make an investor-friendly real estate agent invaluable.
What Does a Real Estate Agent Do for Investors Wanting to Buy?
The goal of a real estate agent that specializes in helping buyers — called a buyer’s agent — is to scout out properties. They can locate off-market properties you would not otherwise have access to.
A buyer’s agent can help investors scout properties in a variety of ways, including:
Expired Listings
Expired listings are a win-win for the investor and the owner on record. It saves the owner the commission of one agent. They can sell without having to market the property again through open houses, showings, and re-listing in the multiple listing service (MLS). For the investor, these properties offer a fast close, likely no contingencies, and no waiting around.
For Sale By Owner (FSBO)
For sale by owner, abbreviated FSBO, saves paying two commissions. In FSBO, there most likely will be no contingencies. In most cases with FSBO properties, payment will be all cash with a fast close.
MLS Properties
What does a real estate agent do for investors with the MLS? They locate properties that have been on the market for more than six months, where sellers are often willing to negotiate with an all-cash, no-hassle offer.
The agent can also call the listing broker on your behalf and disclose your offer. An investor-friendly real estate agent will be an advocate to convince the listing agent to consider an investor’s offer.
Lead Generation
An investor-friendly real estate agent generates leads through their network and connections. They will also employ classic marketing tactics for off-market properties like cold calling, writing letters, and direct mail to generate investment leads.
Property Valuation
Finally, an investor-friendly real estate agent will be knowledgeable in market valuation and trends. Their valuable insight ensures a good investment property for investors looking to buy.
What Does a Real Estate Agent Do for Investors Wanting to Sell?
An agent specialized in the sale of properties — called a seller’s agent — must have a strong command of market value, zoning and ordinances rules, as well as business and negotiation skills. They facilitate the sale process for investors to obtain maximum value on their property.
Here is how a seller’s agent can help you in different types of real estate investment:
House Flipping
A seller’s agent will help you with the valuation and marketing of the property, as well as facilitate a fast closing process.
Small Rental Properties
For small rental properties, a seller’s agent will be the expert that guides you through the rental process.
They should be able to converse in the language of rental real estate investment. This includes a strong command of:
- Gross Rental Multiplier
- Cap Rate
- After Repair Value (ARV)
- Average Rental Rates
- Net Operating Income (NOI)
- Internal Rate of Return (IRR)
- ROI
They should be familiar with all rental terms and financial considerations to guide and advocate for you.
Commercial Real Estate
Real estate agents that specialize in commercial properties usually only work in this niche. It is very specialized and requires extensive knowledge.
Important: For a commercial real estate agent, it is advised to verify their work history of commercial transactions. Look for a record of competence and success.
What Does a Real Estate Agent Do for the Transaction?
Hiring an investor-friendly real estate agent and the real estate transaction itself consist of a lot of paperwork. The real estate agent will take care of all this for you.
For this reason, the agent should have a strong command of the hiring process and the transaction process to get the deal done smoothly. A skilled real estate agent will move the whole process for you to make it nearly automatic.
Conclusion
What does a real estate agent do for investors? They are the driving force that facilitates real estate transactions. Real estate agents make it possible for investors to focus on the properties themselves and not worry about the paperwork.
Whether you are buying or selling — no matter the type of real estate investment property — a real estate agent will be your advocate and guide to a fast, no-hassles close on your investment property.
Considering training as a real estate agent or want to learn more about how to invest in real estate? Check out the FAQ and helpful links below!
Frequently Asked Questions
Yes! We recommend working with a specialized investor-friendly real estate agent. These agents will understand the needs of investors and help you through the process. Some investor-friendly real estate agents specialize in either buying or selling property or a particular type of investment like commercial real estate.
With time and experience, you might consider getting your real estate license to save on closing costs. However, as an investor, your time is usually better spent scouting new properties and preparing new investments. Visit our guide for more ideas on how to generate property leads.
Real estate agents become investor-friendly by investing in real estate themselves or after facilitating many investment transactions. An investor-friendly real estate agent is familiar with the requirements of investors and will ensure a smooth transaction. Check out our guide to finding an investor-friendly real estate agent for more information.