Many Real Estate Investors Ask: Should A Real Estate Investor Work With Realtors

Category: Finance, Real Estate.

Many of you know that during the 80 s and 90 s I was a licensed real estate agent and broker who owned a national franchise office. Many real estate investors ask: Should a real estate investor work with Realtors?

But most real estate agents and investors are surprised when I tell them that once I" saw the light" as a real estate investor, I surrendered my broker s license because I no longer wanted to work for tips when I could make" real money" as an investor. Answer: NO! Realtors cannot get you a deal dramatically below market value. There are 3 main reasons to avoid using a Realtor if you want to become a profitable real estate investor. Realtors list properties near the top price range for that particular market. This is not where you go looking for a good deal. In addition, once a property is listed, it is available to every investor in the market, and competition for the property will drive up the price.

Realtors poison your dreams. Most Realtors are completely ignorant of how we function as investors. Successful real estate investors know how to buy property significantly below market value. Realtors are not trained or experienced in finding properties at wholesale prices. I can see the so- called" professional" Realtor laughing at them for trying to find wholesale deals, and then telling them they know of a" real deal" where they can get a$ 100, 000 house for a steal. only$ 95, 000! An inexperienced real estate investor could be at a disadvantage by listening to a Realtor s advice and perspective. To the inexperienced investor, this Realtor" help" can be career- ending.

Realtors like to base the sales price on the average price of homes in the area. Investors are better at selling houses. By comparison, experienced real estate investors understand that if homes in the area are selling for$ 250, and they have, 000 just rehabbed a similar home, it is worth more than$ 250, 000 because their house is much nicer than the comparable sales. They could be missing the highest comparable sales available and cost you tens of thousands in lost profits! Plus, most Realtors base sales prices on MLS sales that do not factor in properties sold by owner/ investor. The 3 reasons above illustrate why I am against real estate investors using Realtors to help them buy property. and that s coming from a former real estate broker!

Let me explain and define the times when I do think using a Realtor is the good business decision. However, as with most rules, there are exceptions. When should an investor use a Realtor? A credible Realtor and MLS listing can help create and manage multiple offers. In a HOT real estate market. A real estate investor may earn a high net profit even after paying the broker/ agent commissions.

Given the upward neighborhood price movement and quantity of buyers, we listed the property at$ 135, 00We soon had offers coming in from$ 135, 000 to$ 151, 000! Example: I had just completed rehabbing a house in a lower income area that base on comparable sales had a top value of$ 125, 00The market was hot and buyers were in a feeding frenzy. And this is for a house worth only$ 125, 000! Realtors do occasionally find or hear about incredible property deals. The other time to use a Realtor is any time they bring you a great deal. I understand this article may not be well received by Realtors, but then again, I m known for telling people what they need to hear, not what they want to hear!

While there are ways to use the license to your advantage, you should realize having a license can kill your marketing when you follow all of the disclosure laws( i. e. - putting" Realtor" or" agent" on an I Buy Houses CASH ad will kill your response rate) . If you have a Realtor or broker s license and want to start real estate investing, be sure to check all of the state s disclosure and licensing laws. Happy Investing!

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