When it comes to real estate agents, there are a few pretty widespread misconceptions about exactly what they do and their ultimate value, even among investors. Many people believe they can just cut out that middle man and save a good bit of money by not having to pay agent commissions. So as an investor, do you really need the services of an agent? Most investing experts agree that you do. After all, an agent’s paycheck depends on helping you execute successful transactions. Let’s see, then, why every Metro Detroit Michigan real estate investor needs an agent by their side.
Kinds of Agents and Agent Roles
A seller’s agent represents the selling party, and her role is “to find the best deal that will give the seller maximum profit for their property. An agent will also advise the client on the preparations needed and improvements that can boost the price of the house. Agents use advertisement and networking mainly as marketing techniques for the seller’s property” (Mashvisor).
A buyer’s agent for a Metro Detroit Michigan real estate investor represents the buyer and has the primary task of “finding the cheapest property that fits the profile the buyer is looking for. Based on their experience in sales and market prices, real estate investment agents are able to identify areas and particular properties that fit the budget” (Mashvisor).
Agents for Buyers
Hiring a buyer’s agent allows a Metro Detroit Michigan real estate investor to concentrate on running her business instead of investing tons of time and effort in looking for properties that fit the investment budget. The agent’s main job, then, is finding the kinds of properties the investor needs and within the right price range. Then the agent negotiates with the seller to get the best price possible.
Agents for Sellers
Similarly, seller’s agents work for investors handling all the burdensome and time-consuming tasks like showings, negotiations, and legal technicalities. And this, again, allows a Metro Detroit Michigan real estate investor to concentrate on running the business. In addition, many investors who buy and hold properties aren’t up to date on everything going on with pricing. But the agent will be.
Agent Advantages for a Metro Detroit Michigan Real Estate Investor
Investors can realize several distinct advantages by using an agent, for example:
JARGON FAMILIARITY
Investing in real estate involves a lot of jargon and technical terms that can be more than a little confusing, such as cap rates, ROI, cash-on-cash returns, 1031 exchanges, and net present value. Agents are familiar with all these terms, and investors who don’t have the time or inclination to learn them can simply lean on their agents’ knowledge.
UNDERSTANDING OF GOALS
Also, agents understand what matters to investors, especially their investment goals. A good agent, then, will know the best approach and strategy to help a Metro Detroit Michigan real estate investor achieve her investment goals.
TIMELINE ASSISTANCE
Whether an investor has a five-year plan or a ten-year plan, a good agent can provide the expert guidance needed to help the investor stay on schedule.
CORRECT CALCULATIONS
The business of real estate investing involves many formulas and calculations, particularly with respect to analyzing return on investment. Agents have been trained in and have experience in correctly performing these calculations.
MARKET KNOWLEDGE
One of best advantages an agent can offer a Metro Detroit Michigan real estate investor is thorough, up-to-date market knowledge. Good agents will know what neighborhoods are currently hot, where the best schools are, where jobs are moving to – basically, what areas offer the best investment opportunities.
NETWORK AND RESOURCES
Good agents also have a broad professional network and, as a result, can hook investors up with the professionals and tradesman they will need – for example, real estate attorneys, tax planners, plumbers, and painters.
The Big Ones – Lead Generation and Property Evaluation
Still, the two main reasons why every Metro Detroit Michigan real estate investor needs an agent by their side are lead generation and property evaluation. These are key, and a good agent can make all the difference here.
“Lead generation is one of the foundations of any real estate business. Finding a real estate investment property may be the most important aspect of any deal. If you are not doing something every day to generate leads, chances are you will fall behind the competition.” Further, “you must have a system in place that allows you to evaluate properties” (ThanMerrill). And a good agent can help you on both counts – generating leads and providing a critical component of that necessary evaluation system.
Where to Find an Agent
Real estate investors absolutely have to keep their margins as large as possible and constantly work on cash flow – otherwise, they can’t stay in business. So the upshot of all this is that every Metro Detroit Michigan real estate investor needs an agent by their side.