5 Reasons Real Estate Investors Should Be a Realtor’s Best Friend

The working connection between real estate agents and investors has never been fully realized. Realtors frequently overlook the advantages of dealing with investors, while investors are wary of brokers who refuse to waive their commission costs.

Because they are focused on short-term outcomes, most realtors avoid working with investors. They prefer transactions with a medium to high ticket value above those with a lower ticket value that investors might be interested in.

These two sorts of real estate agents frequently overlook how helpful it may be to collaborate. In the long term, servicing full-time investors may be quite beneficial for agents. Real estate brokers provide several value-added offerings to investors in their continuing business. Finding an investor-friendly real estate agent is a crucial component of the puzzle.

Investors are still essential clients, despite the fact that we deal with typically unattractive assets. Real estate agents may benefit from their long-term value if they stay open-minded about dealing with them.

REPEAT BUSINESS

To generate recurring business, all good agents work hard to develop connections with their clients. They employ promotional materials to keep prior clientele in mind while they wait to make their next move. However, because most people only purchase or sell their property once or twice in their lives, these marketing strategies may be ineffective.

The fees on traditional house sales are definitely higher than those on investment properties. These commissions, on the other hand, are rarely earned. The prospective financial worth of a homeowner decreases after the first real estate purchase. Typically, agents are unable to rely on them for repeat business.

Working with investors is a good option for agents who want to get repeat business from the same customer. Investors, who rely on a regular stream of sales to keep their businesses afloat, require the assistance of a realtor more frequently than the average property buyer or seller. In reality, successful investors frequently undertake one or two acquisitions every month, ensuring that the agent involved has steady work. Fix and flips are a great illustration of how agents may work together for a win-win situation.

Working with investors provides agents with a more constant and predictable flow of business. An investor's long-term client value is incredibly promising. Rather than cultivating connections with a big number of clients with little potential, real estate brokers might focus on a small number of investors and rely on them for regular transactions.

LIGHTNING-FAST DEALS

It’s easier for investors to commit to a fix and flip property that they may only own for six months than it is for a future homeowner to commit to a house that will be theirs for a lifetime.

Some agents get stuck working with clients for months or even years looking for the “perfect home.” Those who aren’t time-pressed to buy or sell tend to nitpick specific details of homes, all the while taking up an agent’s time and resources. Since investors rely on real estate to make a living, they are always serious buyers. Rather than casually shopping the market like many homeowners – they are ready to buy.

Investors don’t have time on their side. The success of their business depends on speed. Investors must move quickly to beat out competitors and capitalize on hot markets. They must also sell quickly to minimize holding costs. Experienced investors flip multiple houses simultaneously and can turn around a project in just 9 months (that’s the average for one of our borrowers); for them, the faster, the better.

Agents who work with investors can reap the benefits of speedy transactions and earn quick commissions. With the right collection of investor clientele, they can expect to do 5 to 6 deals per month, earning separate commissions on each one!

DOUBLE COMMISSIONS

An investor occupies two different roles during an investment. In the first leg of a project, they are buyers searching the market for properties. In the latter half, they are sellers listing rehabbed properties on the market.

When an agent provides exceptional service to the investor on the buying end, they will often be trusted to handle the sale as well. This means that the agent is entitled to two separate commissions. They receive a buyer’s agent commission on the way in and a seller’s agent commission on the way out.

REFERRALS

Investors are typically plugged into the local real estate community. They often attend meetups, events, and conferences to network with other investors and real estate professionals. This networking provides a window of opportunity for agents to earn referral business.

Since investors are social people, they can spread the word about a trustworthy and helpful agent. Sometimes, agents will receive indirect referral business from an existing client.

If an agent suggests a property that doesn’t meet their client’s needs, it still may work for another investor. Each investor has a different comfort zone and different margins to hit. A property may be desirable for one investor and undesirable for another. Investors know this and will often recommend properties that they can’t use to other investors who can use them, all hoping that they return the favor in the future.

When an investor passes on a property and suggests it to someone else, the agent in charge earns a new client in the process. This process is repeatable at scale, so long as the agent finds quality investment properties that can be circulated throughout the investment community. Just like?real estate agents having a relationship with a mortgage broker, it can work the same with an investor. It’s all about building confidence in one another.

SMOOTHER TRANSACTIONS

Traditional home buyers make purchasing decisions based on emotions and aesthetics. They want a home that looks and feels right. These qualifications are subjective and tough for an agent to grasp, making it difficult to suggest the right properties.

Investors base decisions on numbers. Their criteria in searching for investment property are specific and well defined. If they can’t find properties at a steep discount with value-added potential, they move on.

Working with a client whose criteria are predictable makes it easier for the agent. When they understand an investor’s target numbers, realtors can more efficiently suggest listings for that client. There is less back and forth passing on properties as both parties are on the same page.

Also, since investors understand real estate, they more adeptly handle all of the minutiae involved in the transaction. Investors understand the documentation and what’s expected of them, which means they typically move quicker and don’t need as much help throughout the process.

This is all to say that working with an investor can make an agent’s job much easier. They can spend less time explaining the paperwork, showing the wrong properties, and spending more time productively building their business.

Investors have high demands and need agents willing to keep up with their fast-paced business. If an agent is up to the task, they stand to open up new business channels that will continue to develop and flourish into larger opportunities in the future.