How To Tell Real Estate Agents and Investors Apart

If you’re thinking about selling your home, you’ll probably be interested to know that there are several different types of buyer. Once professionals know you’re in the market, you’ll probably be approached by a few different types of people.

Some of these people will be real estate agents, and others will be real estate investors. The right option for you will depend on your circumstance as a seller.

 

Here are some ways that you can tell real estate investors and agents apart:

 

 

Are They Buying Or Selling Your Home?

This is the main difference between real estate agents and real estate investors. A real estate agent will approach you with the intention of selling your home for you. They will do this by suggesting a sales price and then marketing the property and sourcing prospective buyers.

 

Real estate investors on the other hand typically want to buy the property directly from you. Rather than find you a buyer – they are the buyer! One of the benefits of this is that you don’t have to spend time pouring over listing agreements and having photographs taken of your house. Real estate investors have usually done their research on your property before they offer to buy it, and are therefore ready to move quickly with the sale.

 

 

Are They Charging You Commission?

For real estate agents, selling homes is a business. If they are putting their time and money into marketing your property, they will naturally want repayment. This usually comes in the form of a commission percentage. The average commission percentage charged by real estate agents tends to be 5-6% of the total sales price but can vary dependent on the market and the state.

 

In contrast, real estate investors do not ask for a commission when they agree on the sale of a home. Instead, a real estate investor’s motive is to make money in a different way. This can include renting the property out, or renovating and creating forced equity, or even selling the property for cash at market value to a buyer of their own. 

 

 

Are They Licensed?

Real Estate agents require a valid license to market and sell homes in the state they do business. A license is essential if you are representing someone other than yourself in a real estate transaction. This is to protect both the consumer and the real estate agent themselves.

In contrast, real estate investors do not need a real estate license, because they are not representing the seller in the transaction. A real estate investor is merely purchasing the property directly from the seller. You do not need a license to sell or buy real estate.

 

As stated, there are several fundamental differences between real estate agents and investors, and one may be better for you than the other. If you’re looking for a quick sale, without having to pay a hefty commission, a real estate investor is probably the best choice for you. On the other hand, if you aren’t pinched for time and have a specific type of property that would do well on the traditional market, a real estate agent may be the better option.

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