5 minute read – Many people do not understand the distinction between licensed brokers (real estate agents or Realtor®) 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.
The Real Estate License
A real estate agent/broker and a real estate investor both make money from the properties they work with. However, the way they make money is different. A broker will earn a commission off of the sales that they make.
The percentage of the commission can vary and is generally between 2% and 6%*. The agent will make more money on higher sales prices, naturally.
*Commissions are negotiable.
The investor, on the other hand, does not make a commission. Instead, they will make a money/a profit margin by finding deals where they are able to buy the properties at a good price and/or at good terms.
They will then find ways to make money from the property. Depending on the type of property, they have several 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 and/or a profit margin when they purchase real estate.
Helping You Sell or Buying from You
When you work with a real estate broker, they will help you sell your property. They will coordinate and implement the marketing, staging the home, and showing it to others for you.
They strive to make the process of selling as easy as possible. The real estate brokers will try to get you the highest amount possible for your home.
Real estate 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 margin on the purchase with enticing convenience and certainty benefits.
Real estate brokers tend to market differently than most real estate investors. The brokers have an office, business cards, and advertisements.
While there are several investors who market that way too, their approach tends to be different.
How They Work
A real estate broker works under a brokerage firm, also known as a realty office, and the investors tend to work on their own or in teams/investor groups. The investors do not have the same amount of regulation and oversight that the real estate brokers have since they are working on their own behalf.
Agent Investors – The Best of Both Worlds
As you can see, even though they are both working with real estate, there are many differences between real estate brokers and real estate investors. However, some brokers are also investors too. This gives them a distinct advantage when working with sellers.
Not only do they understand both the broker and investor side of real estate, but they are able to offer sellers more options to meet the seller’s needs.
Realblvd – Agents and Investors
As always, it is important to do your due diligence when deciding to work with someone regarding selling your house. As a licensed broker with 16 years of experience and an investor, Arnold Camps and his brand of Realblvd provides professional, and friendly service to everyone.
For more information about how we can assist you, please check out our resources here on Realblvd.com We will be happy to talk to you about how we can buy your house for all cash and close at a time that is convenient for you or maximize your home sale with our advanced listing program.
Contact us to get started