Using a real estate agent when investing in real estate, pros and co

You have both advantages and disadvantages when you use a real estate agent to purchase or sell a home.You may want to understand these factors when you look to invest in real estate.Many people find that they don't need an agent while others prefer to have an agent represent them in the transaction.

First, you should understand that a real estate agent is trained to understand contracts and the legal issues around real estate transactions.That doesn't mean that they know anything about investing or a good deal.You will want to make sure you are doing your own due diligence on each deal.A real estate agent can provide some good information and support, but their motivation is to make a commission and that is not always in your best interest.

Secondly, not all agents are created equal.You will find that many agents are starving and don't do that much business.Sometimes a starving agent is good to work with because they will get out there and do a good job.Others, however, are starving because they don't do a good job.You will need to find a good agent if you are going to use one.

Using an agent can give you several advantages as an investor.First, they should understand the market because they work in it every day.Additionally, the have access to the Multiple Listing Service (MLS).This allows them to pull comparables (comps) and find houses that fit your criteria.It also allows them to list houses on the MLS for you.The MLS will put your house on the market and put it in front of a lot of agents so it is very good advertising.

Another advantage of using an agent is that they have been trained in contracts.They understand what you can and can't do legally.They should be able to write up a legal and binding contract that will protect you.They also have experience in real estate transactions so they will understand the whole process.A lot of money is usually on the line and many frauds and scams are perpetrated in real estate so a good agent can be an added layer of protection.

Lastly, the agent will represent you in the negotiations.You will never have to meet the seller and you may find it less stressful this way.Some people don't enjoy negotiating for the best price while others do.

You will find there are several disadvantages for using an agent also.The most obvious reason is that they charge a commission.Some will argue that the seller of the house pays the commission so if you are the buyer you might as well have a realtor.However, this argument is not completely true.While the money comes from the buyer, the seller will often charge more for the house if there are agents involved.Hence, you as the buyer will be paying a commission for their service.

Additionally, the agent makes a commission only if you purchase the house.Hence, they have an incentive to have you make a purchase whether it is a good deal or not.Realize this when they are giving you advice.Also, they normally have not received training on investing.Most agents don't invest in real estate.Hence, they are not qualified to give investing advice.Therefore, don't rely on their advice to determine whether you should buy or not.

Lastly, the agent is paid a percentage of the purchase price.They are also responsible to negotiate the price.This means that it is in their interest to have the price be as high as possible.This works great if you are the seller, but it is working against you if you are the buyer.Remember, that their interests are often conflicting with your interests.

In summary, an agent can be a great asset to your investing team.However, they are often not needed in your transactions.You should use them when they are needed, but consider educating yourself to complete the transactions when they are not needed.