Why Should an Investor Use a REALTOR®?
Investors come in all shapes and sizes, whether you are a novice or an old seasoned professional you can always use the expertise of a Realtor®. All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® can be called a REALTORS®. We proudly display the REALTOR "®" logo on our business card or other marketing and sales literature. REALTORS® are committed to treat all parties to a transaction honestly. We owe our clients fiduciary responsibilities that include obedience, loyalty, disclosure, confidentiality, accountability, and reasonable care. REALTORS® subscribe to a strict "Code of Ethics" and are expected to maintain a higher level of knowledge of the process of buying and selling real estate.
Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $250,000. If you had a $250,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $250,000 law suit, would you deal with it without the help of an attorney? Considering the fact that a Realtor® is an asset would you want to take on the liabilities of doing it on your own, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®.
But if you're still not convinced of the value of a REALTOR®, here are a few more reasons to use one:
1. Your REALTOR® can help you determine your buying power and plan for your investment. Lack of a plan is the biggest mistake we see new investors make. The first step is to develop a plan based on what you can afford and how long you can afford it. In today's market, holding times have increased therefore a contingency plan must be in place in order to survive. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can help you to develop a long term strategic plan to make your investments successful.
2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties. Realtors® have the resources to target specific areas or property types to match the investor with a suitable property.
3. Your REALTOR® can assist you in the selection process by providing objective information about each property. Real estate isn't easy. Investors don't make money because they pay too much for their properties. Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning. Schools, taxes, existing mortgages etc. There are two things you'll want to know. First, will the property provide the environment I want for an investment? Second, will the property have resale value when I am ready to sell?
4. Your REALTOR® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
5. Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR®, title company or attorney can help you resolve issues that might cause problems at a later date.
6. Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders. Numerous properties are in need of work. It is ideal for an investor to work with a purchase rehab lender to insure that the property can be financed.
7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly. Closing the deal always comes with some anxiety. A Realtor® has experience in different situations and can always shed a positive light as to what is going on until the very end.
8. When selling your home, your REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors to getting your property sold for the best price, quickly and with minimum hassle.
9. Your REALTOR® markets your property to other real estate agents and the public. Your REALTOR® can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your REALTOR® markets your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your REALTOR® acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc.
10. Your REALTOR® can help close the sale of your home. A key to your success is building the right team of professionals. You need a good relationship with at least one Realtor®. It is impossible to build a business as an investor if you're spending all of your time sitting at an open house. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR® is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).
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