The Difference Between an Investor and a Realtor | Chris & Jamie Buy Houses - Sell Your House Fast (2024)

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The Difference Between an Investor and a Realtor | Chris & Jamie Buy Houses - Sell Your House Fast? ›

The percentage of the commission can vary and is generally between 1% and 5%. The agent will make more money on higher sales prices, naturally. The investor, on the other hand, does not make a commission. Instead, they will make money by finding deals where they are able to get the properties at a good price.

Real estate agents earn commissions on their deals. This can vary from 1% to 5%, or sometimes even more, depending on the property. However, a real estate investor earns no commission; rather, the investor benefits from the difference between the purchase price and sale price of a property.

Perhaps the biggest difference between an investor and the typical homebuyer is their intentions for the property upon buying it. In the case of the typical homebuyer, they're looking for a permanent residence for themselves and their family. Investors, on the other hand, see your home as a business opportunity.

However, selling your home to an investor might be the best move you can make, depending on your circ*mstances. While selling to another family or individual looking for a primary residence can net you a higher price, investor sales provide alternative benefits.

As a general rule, investors are looking to get properties for less than they would pay if they were buying a personal residence. This is especially true if your home will have repair costs after its purchase. Unless the market is extremely tight, they may offer less than the fair market value.

A real estate investor buys property, intending to sell or rent it out. As this type of investment may require high capital initially, some investors don't own the properties they buy and sell, but they do it on behalf of others.

A consumer is typically more risk-averse than an investor since they are buying a property for personal use. Investors are more likely to take calculated risks since they are buying a property with the intention of making a profit.

Investors can invest their money in exchange for shares (equity), as a loan (debt) or as convertible instruments, such as SAFEs and Convertible Notes. On the other hand, a shareholder is a specific type of investor who owns shares in a company.

Selling to an investor has several key benefits. Each real estate transaction is different; however, real estate investors are often cash buyers, have quick closing timelines for a quick sale, and have limited concession requests. However, this can also come with an offer that is below market value.

A primary residence is typically your long-term home. It's where you live, sleep, raise your family and watch TV. An investment property might be fully capable of serving as a home, but it's instead used as a means of generating income. The primary goal is to make money instead of making a home.

How much less do investors pay for houses? ›

With some exceptions, investors typically pay no more than 70% of a home's fair market value (after repairs, and minus repair costs). In exchange for a low price, they can often pay cash and close very quickly — in some cases, in as little as a week.

Investors usually put in a cash offer within 24 hours of being contacted and most processes take two weeks for sellers to close with an all-cash investor. This is a much shorter timeline than selling your home to someone who needs a mortgage, which will take you at least 60 days to reach your closing.

“Investors are not protected by state or federal Fair Housing Laws, so if a seller refuses to sell to an investor, that is the seller's right.” For individual sellers, it can be tough to turn down investors' offers — especially when they're the highest bids by a long shot.

The convenience and certainty of all-cash offers appeals to sellers so much so, that they pay on average 10 % less than mortgage buyers, according to a new study from the University of California San Diego Rady School of Management.

A Realtor works for a broker and the investors tend to work on their own or in teams / groups. The investors do not have the same amount of regulation and oversight that the Realtors have since they are working on their own behalf.

The benefits of a real estate license for investors include generating additional income, locating more deals, and directly accessing data on the multiple listing service (MLS). Obtaining a real estate license requires time and money, but compared to other professional services, the barrier to entry is relatively low.

Over the past 50 years, stocks have generally generated higher returns than real estate. If you had invested $33,500 into the S&P 500 in 1973, it would now be worth around $5.1 million, with an annual return of 10.59%.

A property investor is one who buy/sell/rent homes for the purpose of making a profit. A real estate agent is a person who helps other to buy/sell/rent their homes and then the agent collects a commission from it.