“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” Franklin D. Roosevelt.
Sometimes people are not actually able to tell real estate investors and real estate agents apart. This is owing to the fact that both parties deal with houses, both make a living from the sales of houses and both parties are professionals in real estate. That said, now the question is, “ what are the differences between these two set of professionals?” The answer lies in their methods of doing business and in this article, we shall be looking at a couple of them. Read on.
To start off, a real estate agent is defined as someone- a professional who has passed the mandatory licensing exams after the needed real estate classes in the state they wish to carry out their real estate business. A qualified real estate agent who belongs to the National Association of Realtors is called a Realtor.
On the other hand, real estate investors are also a professional who carefully examines the real estate market, then purchase properties with the singular intent of wealth creation.
Now the differences …
- Real Estate Agents are Employees of Brokers While Investors are not
Real estate brokers are agents who have taken their education far above that of an agent and have received their brokers’ license. Once an agent is done with their education and received their license, they need to get employed by a broker. An investor does not need to get employed by a broker. Investors are people who seek deals where deals exist.
“ It’s never an easy road but it’s a road we(Investors) love traveling” – Alexander Romanov, co-founder of Iwillbuyhouse and expert real estate investor in Seattle who has bought over 50 houses in Seattle alone.
- Agents Earn Commissions, Investors Do Not
Investors and agents make a living from real estate business, but how? Well, agents need houses to sell from which they earn about 1-6 percent from the sale, while expert investors can make money from some very smart moves and these include;
-They buy below market value and then sell at market value to a qualified home buyer.
-An investor can flip the house by selling it at a discounted rate for quick-sale, most times to a like-minded investor.
-An investor can finance the sale of a property to a buyer and then have the buyer make monthly payments to them instead to a mortgage bank.
- An Agent Needs License to Operate, Investors Do Not
Real estate agents who operate in a state need to be licensed by the state government. As an investor, you do not need a license in order to buy or sell a house, but as an agent, you are representing someone and would need a license to do that on a professional level.