You wouldn’t go into the courtroom without an attorney. So why would you buy, sell or redevelop real estate without an advisor or agent? Entering into a real estate transaction with an agent or by yourself is a legally binding agreement. While doing the work yourself can save you on the commission rates real estate agents command, going in alone may not be the way to go and could end up being more costly than a commission in the long run.
Buying or selling real estate is a major financial (and emotional) undertaking. Although agents or advisors can either negotiate or help negotiate transaction prices, they are there to be a fiduciary and to make sure that you have all the information possible to make educated decisions. Let us look at some of the reasons why you need one and what the differences may be.
What is the Difference Between a Real Estate Advisor, Agent or Realtor?
A real estate advisor’s primary job is to evaluate real estate, the short and long-term goals of their client, and provide options for the highest and best use of any given property. The real estate advisor often works closely with your accountant and/or financial advisor to craft the best scenario for your financial goals and situation. Advisors do not have to be licensed agents but often are.
This is slightly different from a residential real estate agent or broker realtor, who are (generally) only focused on a single transaction instead of the bigger financial picture, Real estate agents and Realtors have to be licensed in the state in which they conduct transactions, however, the designation of Realtor differs from Agent in that we belong to a National Organization that holds members to a higher ethical and moral standard. This is not to say that Real Estate agents are not ethical or moral, but as a Realtor, we are bound by the organization’s code of ethics.
Why do I need a Real Estate Agent or Real Estate Advisor?
Purchasing, selling, renting or converting real estate assets into profitable ventures can be a challenging, complex, and time-sensitive process; in real estate time can kill deals. Many questions can arise that dramatically impact the outcome of the investment. Highest and best use is a term that will continue to come up. Often, return on investment will far surpass the cost of using an advisor or agent; typically, buyers do not pay real estate commissions. There are numerous parties involved, such as title and deed research firms, attorneys, and insurance companies, that one must coordinate with in order to appropriately conduct a real estate transfer.
Further, many questions can arise that dramatically impact the outcome of the investment such as potential zoning. Highest and best use is a term that goes hand in hand with real estate. Highest and best use determination can significantly change the financial outcome of a real estate transaction. A quick example would be a residentially zoned lot on a main thoroughfare sells for $200,000 as a single family lot. However, after researching the market and other scenarios, it could have sold for twice that if you were to rezone and sell as a commercial lot.
Typically, a real estate advisor will have an extensive background in real estate or development, often development, often with experience and resources that extend far beyond the responsibilities of buying and selling real estate. A real estate advisor works in an advisory capacity to help you plan more strategically, and strategically and increase the value of your portfolio. Key metrics advisors take into account can include but are not limited to:
Capital allocation strategies and tax deferment
Evaluation of land, zoning, and zoning, and local ordinances
Feasibility, renovation, and other associated costs for income-producing properties
Guidance in developing, building or renovating residential and commercial properties
Strategies for improving operations and customer satisfaction on income producing properties
After reading this, hopefully you have a better understanding of the difference between “Realtor vs. real estate agent vs. Real Estate Advisor.” The real estate industry is robust, with numerous professionals taking ownership of each of its unique niches. Whether or not you decide to work with an agent, advisor, or Realtor or navigate buying/redeveloping a property on your own, it is important to acknowledge the important work done by these professionals. While there are some qualified to buy and sell their own real estate, being able to rely on a professional during a difficult process is an asset.
Chris Tillett is currently a licensed Realtor in Virginia. Prior to becoming a Realtor, his career consisted of seven years with the City of Norfolk’s Economic Development Department as a real estate development and process project manager. After leaving the city, he worked as the Chief Development Officer for a national commercial construction company specializing in restaurant construction. Due to Covid 19, most jobs came to a halt and new restaurant builds were on hold for the foreseeable future. It was at that time that Chris decided to use his prior experience to start his own Land Development Consulting company.
You can reach Chris Tillett in a few different locations. If you are looking for a house, his real estate website is chris.crenfk.com and if you are looking for development consulting services, information can be found at www.tillettadvisors.com.
Carlton Building Services in Hampton Roads Virginia
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