Do realtors have an advantage when buying investment properties?

Question

From a non realtor point of view. It seams like the “good deals” can be (not always) snatched up by other realtors before they get to investors.

Do you think there is an advantage to become a realtor to find your own investment properties?

Russell Brazil · Answer

Do I have an advantage? Yes. But its not because Im just an agent....its because Im in the top 1% of all agents. It isnt just having a license that gives you an advantage, ...ita only when everyone knows you and brings deals to you because of how much business you do. Just having a license doesnt do anything on its own.

Amber Gonion · Answer

@Mason Clinger I am a broker my husband is an agent.  The advantage is in doing many deals per month and seeing over and over the prices, rents, and conditions of properties.  Mls access is nice but it isn’t a great advantage as most everything is out on Zillow and if it is an easy to spot deal it will go to highest and best (at least in Minneapolis area).

The advantage is living and breathing the industry every day.  We are doing rental comps for potential properties every single day, we are walking through properties just about every day.  We also manage properties so it helps us keep a pulse on the rental market.  After a while you just know by the little things when it’s a deal and when to pass.  Having license in itself doesn’t help, and the tools don’t help, but the volume and living in the area means everything.

JD Martin · Answer

Not much of one.

1. Realtors don't have unlimited bundles of money to scoop up all the good deals;

2. Most realtors are like most Americans, with less than a thousand bucks to their name in an emergency;

3. You could apply this same logic to everyone in the chain - lenders, inspectors, foreclosure specialists, etc. Everyone has their niche and realtors are interested in moving lots of houses, fast, rather than just scooping up a bunch of stuff that has to be rehabbed, put back on the market, and eat the holding costs while waiting for a buyer.

Bottom line: it's not something to worry about.

David Greene · Answer

@Mason Clinger

Very few agents will ever invest in real estate. I honestly would not worry about this.

The best thing you can do is educate yourself in what you’re about to do (the contract, Contingencies, loan pre approval, how to read an inspection report, rent amounts, rental demand, etc) and feel incredibly comfortable before you ever look at a house.

That way when you find one you like you can move quickly and decisively and snag it before anyone else does.

I make all my buyer clients go through a presentation where we explain all this thoroughly. Most agents do not.

Don Spafford · Answer

@Mason Clinger I would say that possibly the only advantage it would bring is that you don't have to wait on someone else. If you find a property you like, you can submit your own offer. You don't have to call your agent and wait for them to send you the offer to sign, so that when a great deal does show up you can try to get in right away. Of course that doesn't mean there won't still be a dozen other offers anyway, but if you make a good offer, you may be able to get it accepted right away before other offers come in. That and being able to check out properties when it is convenient for you, not have to depend on other peoples schedules or have random people from someone's team show up to help you. Other than that, like everyone else said, there isn't much of an advantage.

Bruce Runn · Answer

I buy/sell enough multi family properties/go into most multi family listings in my target area via on the MLS and off market and my son in law is my agent so I think I have an advantage over 95% of realtors.  I can put an offer/know listings at the same time as an agent but am a 3rd party that I believe gives me an advantage in buy and sells.  I can also come in with all cash which most realtors can't do and I'm a GC so I have more intimate knowledge of reno costs than any realtor as I do that day in/day out including building new.  I personally think a GC has more advantages over a realtor.

The one place I've seen a realtor advantage is when there are multiple offers and the realtor/buyer has a relationship with the listing agent that they may get a right of last refusal over other bidders.  Even then I can put in an escalator clause to negate that if I have room in my price.

CJ Chaney · Answer

I think it gives an advantage based on you have a better base knowledge of RE in general than the normal person and agents do have access to the MLS and Contracts and hopefully, as a Realtor, you know how to value a home. It's the same as anything though you have to put in the work to actually learn about RE investing. Most real estate agents don't actually know a lick about investment properties.

Adam Tafel · Answer

Reviewing 100s of deals every month for clients gives you a pretty good eye. Being well-versed in negotiation tactics, market values and rehab costs goes a long way. Having said that, getting a real estate license for the sake of being able to represent yourself might not be the best deal. There's a big difference between getting your license and working as a full-time Realtor. I'd personally rather have an expert represent me in any area in which I'm not familiar. If I'm buying a vacation home in Florida, I'm absolutely using another agent.

Joe Splitrock · Answer

@Mason Clinger advantage is a matter of perspective. I once heard a motivational talk from a man missing both of his legs and he told the crowd that not having legs gave him an advantage. Life is what you make it. Most people wallow in self pity believing they were dealt a bad hand in life. All the realtors who told you they had an advantage, made it an advantage.

Adam Bartomeo · Answer

I have to say that I am fairly surprised to see some of the responses. The only reason I got my license was to buy and sell my own deals. It has since turned into much more (brokerage and property management) but it has helped me a lot with investing. I hear the others talking about the general or the average agent and its not needed. They are correct, you don't need it. But, and investor/agent has an advantage because they can use their commission to pad the profit and they have full access to the MLS which is a much more powerful search engine then any other site. There are certain rules you have to follow as an agent when purchasing but the benefits far out way the rules. I can make more deals work for me because I have a 3% or so padding. I also save 3% when I sell so I have a 6% savings.

Do realtors have an advantage when buying investment properties?

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