It can be a stressful time if you are in the real estate market. Whether you are looking to purchase your dream home or selling your current property, the market isn't slowing down any time soon. If you are on the selling side of that hypothetical situation, you might be weighing the options of who to use to facilitate the sale. The debate of using a real estate investor or agent and which one is the better option can confuse even the savviest person. Learning about each option and the difference between the two helps you decide the best choice to fit your requirements. AgentsEmployment StatusWhat makes this relationship unique is that agents aren't technically employees of any specific company. Working as independent contractors, agents are representations of the brokerage house that utilizes them. Therefore, brokers take on the responsibilities of the agent's actions, meaning the agent is constantly under the microscope. However, the brokerage cannot control every facet of the agent's day because of the independent contractor status. LicenseLuckily, becoming an agent requires no prior experience, depending on the firm you represent. However, there are many requirements for an agent that don't crossover for investors. For a real estate agent to make transactions, they must obtain a license, seeing as an agent is representing somebody else. Unfortunately, acquiring a license might be a potential roadblock for aspiring agents, as the challenging exam they need to pass may scare them away. However, the agent's number of properties indicates success more than being book smart. CommissionLike most sales occupations, agents make a commission for accelerating the deal of the property. One downside of earning a payday from the commission is that the buying and selling agent split the loot. For example, if you make 5% on selling a $500,000 home, you take $12,500 instead of $25,000. Another negative for agents is that they only make money through the sale of the home, making it draining and time-consuming if the property is on the market for an extended period. PaceWhen you buy a home going through a broker and agent, the process feels lengthy and tedious. As an agent, they must walk through the entire process of purchasing a home. That includes handling all the negotiations between the buyer and seller, the house inspection and repairs, and ensuring all the necessary papers are signed. If you are the seller and need a quick transition, the slow process hampers using an agent to complete a sale. Building a BrandIt can be a bit overbearing on how much agents market themselves. For instance, one of the most exaggerated personalities in television or cinema is a real estate agent. An agent will utilize billboards, websites, business cards, or direct mail campaigns to entice you to use them to sell your home. InvestorsEmployment StatusAs a real estate investor, you are in complete control of handling the transaction. You don't need to adhere to the practices of a brokerage house because you aren't working for anyone—you're working with someone. LicenseWhile it might be beneficial for an investor to acquire a real estate license, it isn't necessary to conduct business. Ergo, by not requiring a license, an investor can bypass all headaches that come with acquiring one. You will likely spend around 120 hours to complete the required course, which doesn't consider the time spent studying for the demanding exam. Furthermore, you will have to take additional classes throughout the year to keep your license active. In summary, jumping through all the hoops of getting that license isn't worth the headache for most investors. CommissionA fantastic thing about being an investor is the various ways you can profit. An investor has several options at their disposal, like selling the property to a potential buyer at market value. Making a quick deal like that helps investors gain some capital back that they put into the property. Additionally, if the potential buyer can't pay for the property upfront, you can strike a deal that allows the buyer to make monthly payments directly to you instead of the bank. If there isn't a potential buyer, you may offer the property to another investor to flip. Lastly, you can handle your properties like a value meal and sell a bundle of properties for one price. PaceUnlike the long, drawn-out process of purchasing a home through a real estate agent, investors can offer and close a deal in as fast as 24 hours. This type of flexibility helps sellers get their money more quickly than traditional measures. Moreover, an investor can agree with the seller when they need to leave their home, making the moving out process less stressful. That type of understanding between the two parties helps enable a trusting relationship. Building a BrandGranted, investors need to market themselves to fill their client list. However, their advertising plans may differ a bit from those working as real estate agents. It's not uncommon to see a sign stapled to a light post that says "We buy houses" with a number attached to it. That sign represents a specific real estate investor. They certainly aren't as in-your-face as real estate agents when they market themselves. SummaryWhat Suits You?So, between real estate agent and investor, what is the best option for you when you are ready to sell your home? Well, that depends on what you are trying to accomplish, the speed at which you need something done, and the assistance necessary to handle any deal. If you want to sell your house fast and have a relatively painless experience, using an investor will be the best strategy. However, if you want the certainty of someone who has accreditation and completed various courses and exams, a real estate agent fits your needs better. If you are leaning towards the idea to sell your house as-is in Naperville, using Direct Property Buyer offers their expertise and will give you the best available offer.
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AuthorEric Strung and Direct Property Buyer Team Archives
January 2024
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*Members of Direct Property Buyer have real estate licenses held by Spartan Residential.
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