If you’re planning on investing in property, working with a broker is a good idea because they can guide you along the proper channels. Before we discuss why you should work with a licensed broker, it’s imperative to distinguish between the different broker categories. In the United States, brokers fall into one of four classes:
Listing brokers: These agents work on a contractual basis and are hired by property owners who require help in marketing their property to either sell it or lease it.
Buyer brokers: these are the agents who help buyers interested in acquiring a property.
Dual brokers: these property agents assume the role of both seller agent and buyer agent. They are required by law to disclose this dual functionality to avoid conflict of interest and obtain signed permission from both parties before proceeding.
Transaction brokers: do not take part in any of the preliminary buyer and seller negotiations. Their role is strictly to facilitate the transaction for either the buyer, the seller or both. They must be a neutral party.
Advantages of working with a broker when investing in real estate
If you’re new to the world of property investing, there’s probably a lot you’re not aware of. Having someone to guide you and explain new terms, procedures and legal landlord obligations can prove invaluable. Here are some of the top benefits of going through a broker when investing.
1. They teach you the ins and outs of property investing
Do you know what to look for when selecting a property? Are you familiar with the application process? Do you have experience liaising with solicitors? Can you compile and fill out the necessary paperwork by yourself? If you answered in the negative for most of these questions, then you’ll certainly do well to go through a broker.
2. They’re often impartial when it comes to lenders
Most brokers work independently and aren’t associated with specific lenders. This is good because they become neutral parties who can compare the different offers available from a range of lenders impartially.
3. They can help speed up your application
As professionals working in the property industry, expert brokers will have established good rapport with lenders, banks and other institutions. You can benefit from these relationships if you choose a good broker. A well-connected broker may be able to help push your application along and get it approved faster.
4. They know their way around different types of loans
Property investing comes with a range of complexities that only an experienced broker will know how to navigate. One of these critical areas is securing the loan to purchase the property. A seasoned broker will know their way around construction loans, bad credit loans, non-resident loans and a host of other financial situations.
5. They can explain your mortgage situation
If you’re thinking of using your mortgage to get a loan, your broker should be able to explain to you how you can use it to your advantage. Additionally they’ll be able to better explain offset accounts and redraw facilities. If you’re thinking of splitting, they’ll also be able to advise on this too.
It’s not difficult to see that there are many reasons to go through a broker when investing in property. It’s not only a wise decision but one that can potentially save you time and money.
Are you looking to invest in property? Talk to one of our PMI Colorado advisors for more information on how we can facilitate the process and make it easier.