Real estate investors operate differently than conventional buyers and sellers, especially to get the 26.9% ROI the average flipped property makes. As you gain experience in the industry, you learn that you might not need the comprehensive support of an in-person real estate agent. Instead, investor-friendly brokerages are a better fit for your goals. You’ll recognize them by their fast-moving tools that empower you to find profitable investment opportunities, price your existing properties strategically, and close transactions with minimal fuss.
The right professional services can help with real estate investment. For example, you might work with a hard money lender who can get you the money fast, not a conventional mortgage lender. You may hire contractors who can flip a property and make it marketable, not remodelers who want to make it a perfect fit for you. Most important is a brokerage that’s built for investment deals, not one that only works with conventional homeowners.
Learn more about why choosing the right investor-friendly brokerage is so important and what to look for when you start your search.
Why Investors Need an Investor-Friendly Brokerage
Real estate brokers are agents with the right licensure and years of experience to oversee and manage other agents. All agents must work under a brokerage in order to practice real estate, and every brokerage has a slightly different business model depending on their size, specialties, areas of focus, and business goals.
For example, some brokerages are extremely streamlined, providing agents with minimal support for minimal fees; other brokerages are very large and may have multiple real estate teams that serve homebuyers, commercial property buyers, and investors.
While investors can make do with almost any brokerage, you can significantly reduce complications by finding a brokerage that aligns with your investment and business style.
What Does a Brokerage Do For Investors?
The primary objective of a brokerage is to help clients with strategic decision-making, managing paperwork and contracts, and ensuring transactions comply with legal and industry-specific parameters. They can also help facilitate marketing and negotiations. However, precisely what a brokerage can do for you as a real estate investor depends on your preferred approach. There are two main strategies to consider: working with an agent and working without an agent.
When you want to work with an agent, a brokerage provides these services:
- Licensed real estate agents for the buy and/or sell side of the transaction
- Advice and guidance on complex real estate transaction details
- MLS listing services
- Curated reports about new and upcoming properties so you can add to your portfolio of properties
- Real estate agent services, such as managing open houses, representing you during transactions and negotiations
When you want to work without an agent, a brokerage can provide these services:
- Flat-fee MLS listing services
- Referrals or suggestions for local lenders, title companies, and other professionals
- Add-on services for marketing, negotiation management, and more
- Consulting services
Deciding to Work With or Without a Real Estate Agent
While real estate agents can bring a lot of experience and resources to every transaction, their services can also be costly. Typically, the selling agent (who represents the buyer) and the listing agent (who represents the seller) each receive a 3% commission. For a $350,000 house, that’s a $21,000 price tag.
This steep cost can quickly cut into your profits, so many investors opt to represent themselves and work without an agent. Knowledgeable sellers can do so through For Sale By Owner (FSBO) transactions, and investors can make offers or sell properties on their own as well.
This is very advantageous for investors on the selling side of the transaction since sellers typically cover both agents’ commissions. But it can also give you an advantage on the buy side of the transaction because you can waive the agent commission and negotiate on price to share the savings.
However, to enjoy the savings of working without an agent, it’s important to be able to manage the tasks and services real estate agents traditionally provide. For example, you might comfortably manage marketing, negotiations, and contract obligations on your own while paying for data or analytics tools and flat-fee listing services. This gives you the best of both worlds—but only if you feel comfortable managing the work for yourself.
Benefits of Working With a Convenient and Reliable Flat-Fee Brokerage
Finding a reliable brokerage may feel secondary to other operational tasks of your business, such as finding properties or scheduling repairs. However, shopping around to find a brokerage that offers all of the services you need—with the flexibility and independence you want—will pay hefty dividends over time. This is especially important if you choose to invest without an agent.
Finding a flat-fee, investor-friendly brokerage you can rely on offers these critical benefits:
- Standardized workflows: You can start to build repeatable processes and checklists so handling every transaction is methodical. You can build the brokerage’s services into your workflows so you or your staff can easily take care of all the tasks and to-dos for buying and selling properties. Creating standard workflows does more than ensure you’re diligently following through on each property—it allows you to scale your business and pass off more of the administrative tasks to staff while you focus on assessing properties and managing relationships.
- Clear and predictable costs: Agent fees are percentage-based, which can make it challenging to predict costs if the price isn’t negotiated until the end stages of the investment process. But with flat-fee services, you know the cost of listing the property on the MLS and any additional services, allowing you to clearly forecast expenses, profits, and cash flow
- More control over your business processes: When you work through an agent as your intermediary or representative, you’re always one step removed from the process. Inexperienced homebuyers and sellers may prefer it, but it means that experienced sellers or investors can’t directly negotiate, don’t have real-time insight into all the moving pieces, and rely on the agent’s preferred processes.
- Ultimately, more savings: Depending on the transaction, the other party may always have an agent. But as long as the fees and time you dedicate to managing your side of the transaction come out to less than 3% of the purchase price, then you come out ahead.
6 Must-Have Elements in an Investor-Friendly Brokerage
Once you know what kind of relationship you want to have with a brokerage, you can more easily find an investor-friendly option that gives you the cost savings and control you value. Look for a brokerage that offers the following elements so you can manage the entire process and save on your investment property closing costs:
1. Online Operations
Online brokerages are more accessible and allow you to explore a wider array of properties across the state. You can use an app or mobile website without having to call in or wait.
2. Flat-Fee MLS Listing Services
This is one of the most critical aspects of an investor-friendly brokerage. Only licensed agents and brokers can directly access the MLS. This can be a costly barrier when you want to promote your properties to agents, buyers, and prospective tenants.
Through a flat-fee listing service, you can upload images, property details, offer requirements, and contact details, all for a known fee. Along with showing up directly in the MLS database, your listing details will be pushed out to public-facing sites like Realtor.com and Trulia. Agents on the other side of the transaction can share the property with their clients and communicate with you.
3. Communication Management Options
Look for brokerages that offer or include portals for managing the communications and negotiations related to each of your properties. This helps you maintain organized histories regarding each property as you field different offers or have staff assisting across multiple properties.
4. Tools and Resources for Marketing
Depending on your preferred style and the nature of the property, you have the option of open houses, showings, and professional photographs. Look for a brokerage that caters to these tactics by offering yard signs, open house management tools, a digital lockbox or Supra for managing showings, and professional photography for your listing and marketing.
5. Optional Access to an Agent
Most of your investment deals won’t require the full attention of a real estate agent, but some of your transactions may come with unique questions and challenges. Look for a brokerage that offers reasonably priced consulting services with a licensed agent. Then you can ask questions about a specialty niche, have them look over complex terms, or rely on their expertise.
6. Fast Title Options
Title work is often one of the biggest drags on real estate transactions. A lot of paperwork and documentation goes into verifying and transferring titles. If you’re managing all-cash deals, then you’re no longer waiting for an appraisal to go through, and the title company becomes the longest lasting to-do. Look for brokerages that either partner with reliable title services and can offer expedited options or let you begin title work immediately so there are fewer delays in the latter days of the transactions.
Build Your Investment Process with a Brokerage that Empowers You
Stay in control of your real estate investment and transaction processes with specific flat-fee services and optional auxiliary services that fit your style. ListingSpark is an investor-friendly brokerage, and we empower investors by pulling back the curtain and giving you access to all the moving parts of real estate transactions. Skip the hefty commission fees and decide how you want your investments and sales to move forward. Explore our service options today to see where we fit into your business and can optimize your cash flow and profits.
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