Real estate agents play a valuable role to Investors and I have given 7 reasons why investors use experienced agents in their investing business. http://www.erealestatepro.com/
1) They Know the Neighborhood
Good agents are very knowledge about their neighborhoods and the market conditions that effect buying and selling. And if they don’t know something, they know where to find the information within their local contacts.
They can compile the all important “comparable sales” of houses in that immediate area and hand these facts to you so you can make a more informed decision. Plus, they can tell you about crime, schools, and other community facts. But the big thing here is comparable sales. And that is knowing what similar houses have sold for in the last 3 to 6 months.
2) Use Your Agent as a “Buffer” When Negotiating
Top producing agents negotiate well because, unlike most buyers and sellers, they can remove themselves from the emotional aspects of the transaction. Agents also take the awkwardness and uneasy feeling away when they make that offer that is way below what a seller is asking.
Sometimes sellers get offended when you stand there and offer $30,000 less than they are asking. But usually that is because they don’t fully understand why the offer is at a reduced number. But a real estate agent can make the offer and explain why their client has come up with that figure.
An example would be if the seller is asking 175,000 and the houses needs $25,000 in work, you are looking at $200,000 plus your holding costs as your investment on a house that will retail for $225,000. This is not a good investment for the buyer. So the real estate agent delivers your offer of $130,000 but explains that the house needs a lot of work and most retail buyers will not want or can’t afford to do the work after purchasing the house.
In fact most buyers will not be able to get a mortgage if the house can not obtain a Certificate of Occupancy from the township. You can also be a much stronger negotiator when you are behind the scene. You can do this all day long. Make offers on houses that fit your criteria and price. You don’t ever have to see anyone in person. But don’t make your offers ridiculous as even the agent can only take so many pies in the face!
3) They Have the Education & Experience to Guide You
I believe you should be more knowledgeable about investing in quick turning houses than your real estate agent, and leave the entire fact finding about the neighborhood, buyers coming in, comparable sales, and even decorating to them. But I do like that more real estate agents are getting the education and experience working with investors. These are the ones you should be seeking. Why not hire a person with as much education and experience as you? Working with this type of agents helps give us more time for other things in our lives as well.
4) They Can Give You the Latest Market Conditions
Real estate agents know the market conditions, along with what buyers want in a house in that area which will govern your selling or buying process. They know what buyers are looking for in homes. They can be very helpful in telling you if you add a half bathroom, you chances of selling quicker will increase. Or they may say everyone in this area wants finished basements, or finish storage areas in the walk up attic, or everyone is looking for wood floors, tile, granite kitchen tops etc. Hey, give them what they want if it’s in the budget.
5) Tap into Their Networking Team
Real estate agents network with other professionals, many of whom provide services that you will need to buy or sell. They do know which vendors have a reputation for efficiency, competency and competitive pricing. Agents can give you a list of references with whom they have worked and provide background information to help you make a wise selection. This includes handymen, movers, cleanout companies, lawyers, insurance companies, and contractors.
6) Contracts and Paperwork
Real estate agents are trained to fill out all the paper work including the most feared by beginning investors is the contract. Here again, they make sure everyone signs, and gets all the pertinent information to hand over to your attorney. Most times you never see the seller until the closing. And that’s assuming that you even go! I rarely go to closings anymore. Why? If I’m buying, I leave a check and sign everything the day before at my attorney’s office. And if I’m selling, I sign the day before and all I have coming at the closing is a check. I know the real estate agent is going to be there to get their check and greet the sellers/buyers. Hey, that’s potential clients for them in a few years
7) The Danger of Negotiating a Real Estate Commission
I often get asked this question:”Should I Ask My Agent to Reduce His/Her Fee?
I am sure you are aware that real estate commissions are negotiable, right? If you hint around about commissions, some agents will offer a fee reduction right off the bat. Others will discuss it with you to see what you have in mind. But even though nobody will feel upset that you asked, as it’s almost expected, I think that puts the investor into a “danger zone” The danger zone I refer to is if you cut the agents commission, they always seem to lose a little of their steam, drive, concentrated effort on “selling your house”.
If they are good agents who work hard, pay them the full commission. If you sell your house in 30 days and feel you are paying too much commission and it was the house that sold itself, change your thinking. Believe me, I’d rather pay a full commission than sit with a house an extra 60-90 days. Those costs can be high depending on the winter and maintenance, holding costs and financing costs.