The recent NAR settlement relating to rules on real estate agent buyer agent commissions shook up the realtor world. Many agents are understandably worried about how these changes will affect earning potential. In this already super-challenging market, the combination of elevated interest rates and frozen transaction activity has caused a lot of stress and struggle. Adding this new uncertainty was yet another obstacle for real estate agents in 2024. While many are sharing their predictions and ideas of how this will play out – it’s still a sea of speculation. Nobody knows for sure how the market will adjust and how the industry will change – only that it will. Whatever path the industry takes – real estate agents need to be adaptable and embrace change and new avenues to succeed as things shake up.
Pivoting Your Strategy: Working Directly with Investors
One avenue that real estate agents should consider exploring is working with investor buyers! This growing segment of the market is comprised of individuals who rely on a trusted agent to find them deals. Residential real estate investors nationwide are seeking to acquire single family rentals, small multifamily properties such as duplexes or triplexes. Additionally, there has been a massive uptick in the popularity of short term rentals. Not only that – but investors generally look at real estate as a business. They are likely more willing to pay out of pocket for buyer representation since the best investors know you have to spend money on high-quality partners to win in competitive markets such as real estate.
Top Reasons to Work with Investors in 2024
- Investors purchase a lot of properties Owner-occupant home buyers typically are not purchasing property regularly. Those seeking a home are looking for just that – a home. They typically will not purchase a new property and move year after year. Investors, on the other hand, don’t need to move to buy more. Many investors like to build portfolios with multiple purchases a year – which means multiple transactions and multiple commission checks!
- Investors will also have other forms of business – such as lease listings – that you can help with as well. A lot of investment properties for buy and hold investors building real estate portfolios are frequently up for rent – with leases typically rolling yearly. Gain the trust of an investor with multiple properties in your market? If you have experience and ability to do lease listings as well – that’s another big source of income and business to supplement yourself in a slow purchase market.
- Referral Fee Income – The best real estate agents are typically focused on one thing – getting their client the best deal and a deal closed. With that being said, commission and income matter – especially in a market and industry where consistent checks and stress-free transactions are a rarity. Most agents are well-aware that RESPA requirements expressly forbid earning a referral fee from mortgage lenders involved in transactions. What most don’t know is that this does not apply to investor transactions. Private lenders such as Easy Street Capital strictly provide business-purpose loans for investment properties. We can freely payout referral fees to agents on investor deals!
Need to double check? We feature the applicable section of RESPA law with direct links to the CFPB webpage on the relevant restrictions!
Becoming an Investor-Friendly Real Estate Agent
OK – now we’ve got your interest? The next question for agents looking to become an “Investor-Friendly Agent” is: “Where do I start?”
Naturally, successful real estate agents that primarily works with homebuyers have a specific expertise. Odds are, this expertise is in the knowledge of their local market. The best agents focus in on geographics. Becoming the go-to agent in a specific city, neighborhood or area and building up a sterling reputation for reliability, knowledge and local expertise is arguably the best way for agents to enjoy consistent success. Knowing the nuances of the neighborhoods – and the “little things” that make all the difference – is the cornerstone of a real estate agent’s success.
For agents wanting to expand to work with investors – building off this path is likely ideal.
Research rentals in your market
Many markets are very different in the atmosphere for rental units – even different areas and parts of the same city? Utilize your access to your local MLS to become a pro at running rental comps. Learn how this data differs from just running comps for sale prices. Consider experimenting with additional rest estimate tools such as the free tool from BiggerPockets and online tools such as Rent-O-Meter to check your numbers. For vacation markets, check out tools such as AirDNA’s “Rentalizer” tool to run short term rental revenue projections.
Find a Niche – Investor Types
Another benefit to working with investors is that you can find focuses and niches beyond just geographic scope. There are many real estate investing strategies that investor buyers can focus on – such as fixing and flipping, short term rentals, the “BRRRR Method” and more. If you can get educated on specific niche strategies and speak the language well to investors – you are likely to become a trusted agent partner for high-volume buyers very very quickly. Check out the “For Professionals” section on our website for tons of free guides and contents on many of the most common and popular investing niches.
Research Rules and Restrictions
Combing through HOA restriction agreements and municipality rental rules and restrictions documents are inarguably some of the most boring activities to imagine. Taking the time to do this will likely payoff big time for those that want to truly succeed as investor-friendly agents. While not as consequential typically for standard homebuyers, missing a rule or regulation for an investor can be catastrophic. Failing to note for an investor buyer that the property they are buying can’t be rented can be devastating. Whether because of the HOA or PUD rules or the city laws, this is a quick way to destroy your reputation as real estate agent aiming to be seen as a trusted partner.
Register for our Real Estate Agent Referral Program Today!
Click the button below to learn more about our Real Estate Agent Referral Program. Get paid to help your clients reach their real estate investing goals! Got any questions? Fill out our Contact Us form and speak with an Easy Street rep today! We look forward to working with you!
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