What kind of real estate professional should you turn to when you want to sell your house?
Both real estate agents and real estate investors claim they are the best way to sell your home. But what’s the difference between the two? Which one is the best option for you?
Let’s explain the difference between an investor and a realtor to help you figure out the best home-selling strategy for you.
What Is A Realtor?
A realtor or real estate agent is an intermediary that you hire to help you sell your home. Their job is to find someone who wants to buy your house — preferably at the highest possible price.
They do this by planning and implementing a marketing strategy to find interested buyers for your home. They will also offer recommendations on how to fix up your home so it will be noticed. Plus, they help steer you to other professionals that can help such as stagers, photographers, and the like.
Once they find a buyer, they will also handle negotiations throughout the closing process.
What Is A Real Estate Investor?
A real estate investor is quite different. Instead of pounding the pavement to find you a buyer, they are the buyer. When you go to an investor, the hard part of selling a home is already done.
There is no nerve-wracking wait for the right buyer to notice your home. All you have to do is strike the best deal with the investor.
Selling to an investor basically allows you to sell your home by owner, reaping all the benefits of this method without all the stressful parts.
Differences Between A Realtor And An Investor
Already, it is quite obvious that these two real estate professionals are quite different. However, let’s dive into the differences to help you understand which professional can help you best in your situation.
How They Are Licensed
A real estate agent is supposed to be a professional that can assist other people in buying and selling real estate. When other people’s money is at stake, it’s important for these professionals to know what they’re talking about. Thus, real estate agents have to be licensed to work.
However, you only need a license when you’re representing someone else during a real estate transaction. Real estate investors are actually the buyers, thus they don’t need a license to operate.
Having a license might seem like a good thing. After all, they had to pass an exam to get it! However, paperwork doesn’t indicate much about their actual sales experience.
Investors are dealing with their own money. With that much skin in the game, they are highly motivated to know what they’re doing.
You can bet that if they aren’t doing well, they won’t last long. So, check their portfolio of past projects, talk to past clients, and look at how many years they’ve been doing business to get a good idea of their expertise.
How They Make Money
Another big difference is how they make money. Listen up, because this is important for you.
Real estate agents earn a commission off the sale that is typically 6% of the home’s sale price. The seller usually has to pay it in full. This means that when you sell a $300,000 house you have to pay $18,000 right off the bat in agent commission!
Investors make money in various ways. Here are a few of the most common:
- Fixing up and reselling the property
- Manage the property as a rental
- Selling and financing the property (acting as seller and lender)
- Bundling it with other properties to sell in bulk
In other words, investors have many methods of turning a profit off the property. They aren’t limited to just earning a percentage of the sale price.
Who Pays The Closing Costs And Fees
In a traditional real estate transaction with an agent, the closing costs are negotiated and divided between the seller and the buyer. The seller tends to pay a large chunk of those costs.
Selling to an investor eliminates some of the closing costs. For example, that 6% realtor commission. On top of that, most investors cover all the remaining closing costs. When you get your offer, that’s how much money you’ll walk away with — no monkeying around.
How The Home-Selling Process Works
The sales process is also quite different depending on the professional you choose. Let’s take a brief look at what you can expect.
Selling With A Real Estate Agent
Selling the traditional way requires quite a bit of work and it can get expensive quickly. Between marketing materials, repairs, commission, etc. it costs approximately 10% of the home’s value to sell it. If the home needs major repairs, you’ll need far more than that.
On top of the expense, there’s the inconvenience. You have to keep your home showroom-ready all the time and you’ll have potential buyers tromping through your home, usually not at your preferred times.
Finally, once you find a buyer, there is often a bunch of back and forth. The real estate agent will handle the negotiations, but you’ll nearly always have to make concessions. Plus, you’ll have to open your home several more times to appraisers, inspectors, etc.
The whole process can take months. Closing alone takes a minimum of 30 days and most of that time is spent trying to please the buyer’s lender. Deals falling through are common and then you have to start all over again.
Selling To A Real Estate Investor
When you sell to a real estate investor, there is only one walkthrough. The investor comes at a scheduled time that is convenient for you to take a look at the home. They are experts at understanding home value so you don’t even have to clean it up if you don’t want to!
Investors often buy houses as-is. A big investment strategy is to buy fixer-uppers, repair them, and sell them for a profit. This means if you don’t have the money or time for repairs, selling to an investor is an excellent choice.
Finally, the whole process is fast. Investors typically pay cash for houses, which means there is no waiting around for the lender. They simply look at the house and make a cash offer.
Upon acceptance, it only takes a couple of days to draw up the paperwork. You can often sell your house in as little as 7 days!
Selling To A Real Estate Investor
Intrigued about selling your home to a real estate investor? We’d love for you to give us a chance!
Here at Mrs. Property Solutions, we have a unique way of doing business. While one of our goals is to turn a profit, our primary goal is to make sure that everybody wins. We buy houses, but more importantly, we help people who need to sell their houses fast.
Our numbers guy has consistently found creative ways for us to buy houses — even when other investors have turned down the deal. And we work hard to make sure our sellers get a fair price for their homes.
Interested in getting a fair cash offer for your home and selling your house in just a few days? Reach out to us today!