If you’re thinking of selling, you’ll likely connect with people who want to help. Some will be agents and some will be investors. Check out this blog post to read about 3 ways to tell real estate agents and investors apart in the Greater Toronto Area, and help you understand why you might want to work with one versus the other…
Ways To Tell Real Estate Agents And Investors Apart In Toronto: List Versus Buy
The easiest way to tell agents from investors is to ask what they are going to do with your house – list it or buy it. A real estate agent will list your house on a listing service and they’ll try to find a buyer. They might need to show it to several people in order to find one buyer.
An investor, on the other hand, isn’t going to list your house – the investor is a buyer and they will buy your house from you directly. (That’s what we do at 24 Hour Cash Buyers – we’re buyers and we buy houses in Toronto. If you want to sell your house, click here and enter your information to find out how much we can pay).
List Versus Buy
Understanding Real Estate Agents’ Approach
When dealing with a real estate agent, their primary goal is to market and sell your house through traditional means. This involves listing your property on multiple listing services (MLS), organizing open houses, scheduling showings, and advertising the property through various channels. The agent acts as a middleman between you and potential buyers, working to find the best offer.
This process can be lengthy and involves numerous steps. From the initial agreement to list the property to finalizing the sale, several months can pass. During this time, the agent will be in constant communication with you, updating you on potential buyers’ feedback, negotiating offers, and handling the administrative tasks associated with the sale.
Understanding Investors’ Approach
Conversely, a real estate investor operates very differently. Investors are typically looking to purchase properties quickly, often with cash offers, which can expedite the entire process. When you engage with an investor, they will assess your property, present a cash offer, and if accepted, proceed with the purchase without listing the property on the MLS.
Investors are usually more flexible with their buying criteria. They might purchase homes that require significant repairs, are in less desirable locations, or need quick sales due to personal circumstances like foreclosure or inheritance. The focus for investors is on acquiring properties that they can either rent out for income or renovate and sell for a profit.
Timeline to Sell
Agents’ Timeline
The timeline to sell your house through a real estate agent can vary widely. Typically, the process involves the following steps:
- Initial Consultation: The agent meets with you to discuss your goals, the home’s condition, and the current market conditions. This step can take a few days to a week.
- Pre-Listing Preparations: This involves making necessary repairs, staging the home, and photographing it for marketing. Depending on the home’s condition, this can take anywhere from a few days to several weeks.
- Listing the Property: Once the home is ready, the agent lists it on the MLS and other platforms. The time it stays on the market can range from a few weeks to several months, depending on market conditions, pricing, and demand.
- Showings and Open Houses: During this period, the agent schedules showings and open houses. Feedback from potential buyers is gathered, and adjustments to the marketing strategy may be made.
- Offers and Negotiations: Once offers start coming in, the agent presents them to you, and negotiations begin. This phase can be quick or drawn out, depending on the buyers’ interest and offer conditions.
- Closing: After accepting an offer, the closing process begins. This includes inspections, appraisals, and finalizing the mortgage. Closing can take anywhere from 30 to 60 days or more.
Investors’ Timeline
In contrast, selling to an investor is generally much faster:
- Initial Contact: You contact the investor and provide information about your property. This step can be done within a day.
- Property Assessment: The investor visits the property to assess its condition and value. This can often be done within a few days.
- Offer Presentation: After the assessment, the investor makes a cash offer. This offer can be presented within 24-48 hours after the assessment.
- Acceptance and Closing: If you accept the offer, the closing process can begin immediately. Investors often have the funds ready and can close in as little as 7-14 days, depending on your timeline and needs.
Commission Versus No Commission
Agents’ Commissions
One of the significant differences between real estate agents and investors is the commission structure. Real estate agents typically earn a commission based on the sale price of the home. This commission is usually around 5-6% of the final sale price and is split between the listing agent and the buyer’s agent. For example, on a $500,000 home, a 6% commission would be $30,000, with $15,000 going to each agent.
This commission covers the agent’s services, including marketing, negotiations, and handling the administrative aspects of the sale. However, it also means that the seller will receive less money after paying the commission fees.
Investors’ No Commission Approach
In contrast, investors do not charge a commission. Since they are purchasing the property directly, there are no intermediary fees involved. This can be a significant advantage for sellers, as it means they get to keep the entire sale amount without deducting commission fees.
Investors make their money through the future use of the property, whether by renting it out or renovating and reselling it. Their profit comes from the property’s appreciation or the rental income, not from the seller’s payment.
Conclusion
Distinguishing between real estate agents and investors is crucial for homeowners looking to sell their properties in Toronto. Each has its unique approach, timeline, and cost structure, which can significantly impact your selling experience.
Real estate agents focus on listing and marketing your property to find a buyer, often involving a longer timeline and commission fees. Investors, on the other hand, offer a quicker, no-commission sale by purchasing the property directly.
Understanding these differences can help you make an informed decision that best suits your needs and goals. Whether you prioritize speed, cost savings, or market exposure, knowing what to expect from agents and investors will guide you towards the best choice for selling your home.
Call to Action
If you’re ready to sell your home quickly and without hassle, consider working with a trusted real estate investor. At 24 Hour Cash Buyers, we specialize in buying homes in Toronto directly from sellers, offering fast closings and no commission fees. Contact us today to learn more and get a cash offer for your property.
References
- Government of Canada. (n.d.). Real Estate – Buyer’s and Seller’s Guide. Retrieved from Government of Canada Real Estate Guide
- Wikipedia. (n.d.). Owner Financing. Retrieved from Wikipedia – Owner Financing
- Ontario Real Estate Association. (n.d.). Seller Financing. Retrieved from OREA Seller Financing Guide