Many people do not make the distinction between Realtors and real estate investors since they both deal with real estate. However, there is a world of difference in what they do and how they operate, and it is important to understand these differences when you are selling or buying a piece of property. Let’s look at what makes them different.
A real estate investor does not need to have a license to buy and sell properties on his or her own. The only time that you will actually need to have a license is if you are representing someone else in the sale or purchase of the properties. Therefore, a Realtor would need to have a license in order to work because they help people to buy and sell their homes.
A Realtor and a real estate investor both make money from the properties they work with. However, the manner in which they make money is different. A Realtor will earn commission off of the sales that they make. The percentage of the commission can vary and is generally between 1% and 5%. The agent will make more money on higher sales prices, naturally.
The investor, on the other hand, does not make a commission. Instead, they will make money by finding deals where they are able to get the properties at a good price. They will then find ways to make money from the property. Depending on the type of property, they have a number of options. They could sell the property for cash at market value, they could flip the property for a quick sale, finance the property to a buyer, or even bundle the property with several others for a larger sale to other investors. Their goal is to generate cash flow.
When you work with a real estate agent, they will help you sell your property. They will assist with the marketing, staging the home, and showing it to others for you. They strive to make the process of selling as easy as possible. However, the investors are looking to buy from people like you. The real estate agents will try to get you the highest amount possible for your home. The investors will want to negotiate with you to get the lowest possible price for the home you are selling, since they need to make a profit on it.
You will also notice that the real estate agents tend to market differently than most real estate investors. The Realtors have an office, business cards, and advertisements. While there are a number of investors market that way too, their approach tends to be different.
A Realtor works for a broker and the investors tend to work on their own or in teams / groups. The investors do not have the same amount of regulation and oversight that the Realtors have since they are working on their own behalf.
As you can see, even though they are both working with real estate, there are many differences between Realtors and investors. However, some Realtors are investors too! This gives them a distinct advantage when working with sellers. Not only do they understand both the Realtor and investor side of real estate, they are able to offer sellers more options to meet their needs.
As always, it is important due your due diligence when deciding to work with someone regarding selling your house. As a Realtor and an investor, Chris Bounds and Texas Ideal Properties offers professional and friendly service to everyone.
For more information about how we can assist you, please give us a call or fill out the form. We will be happy to talk to you about how we can buy your house for cash and close at a time that is convenient for you.
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