Introduction
Finding your next investment property can be a time-consuming and frustrating process. You’ll have to spend hours scouring the internet and visiting properties, hoping that you find something that meets your needs. Luckily, there’s an easier way to go about this process: using a sourcing agent.
In this guide we’re going to explain what a sourcing agent is, how they work with investors like you pre-purchase (before buying), and how they can make finding your next investment property much easier than doing it on your own.
What is a sourcing agent?
A sourcing agent is a property investor who specialises in finding investment properties for other property investors. They are also called deal finders and sometimes real estate wholesalers.
Sourcing agents work with investors to find the right property for their needs, at the right price.
How are sourcing agents paid?
Sourcing agents are paid by the property buyer. They receive a commission which is deal dependent, which is normally made-up of a reservation fee to secure a deal, and the balance of the sourcing fee, due on exchange of contracts.
Good sourcing agents are prepared to work on a commission basis because they know the value they bring to the process–and their results speak for themselves!
How does this process work?
Sourcing agents are a great option for those who want to buy a property but don’t have time to do all the work themselves. They can find the property for you, negotiate the price, expedite and progress chase the legals and above all, make sure your purchase runs smoothly and efficiently.
A sourcing agent will typically charge an upfront reservation fee (around 25% of the sourcing fee) which covers their work up until exchange of contracts.
In some cases, sourcing agents may choose to provide optional extra services for an additional fee, such as offering project management or connections with potential tenants, which their client base may want.
How does a sourcing agent help you find great real estate deals?
A sourcing agent will help you find the right property. They work with an extensive network of real estate professionals and can use their expertise to find properties that meet your needs and budget. They will negotiate transactions on your behalf, which is especially helpful if you’re not familiar with the market or don’t want to spend hours driving around looking at different homes in person. If a deal sounds too good to be true (or if there are any red flags), they’ll let you know so that no one gets scammed!
Who qualifies for a deal from a sourcing agent?
Sourcing agents are a valuable resource for investors who have the capital to invest in real estate and want fast access to good quality deals.
- Who can use a sourcing agent? – Investors with at least £100K in liquid assets (cash) and a clear investment strategy they can outline.
- Who shouldn’t use a sourcing agent? – People not currently ready to buy – it’s likely your sourcing agent will bring you deals quickly – their worst case scenario is non-committal from people saying they’re ready to buy, when this is not the case.
What are the qualifications for an investor? – According to Investopedia: “An individual investor has two basic choices when he wants his money working for him instead of sitting idle in his bank account: investing directly into stocks/bonds/mutual funds or buying real estate.”
A sourcing agent is an expert who can help you find your next investment property.
If you’re interested in buying investment properties, it’s important to find an agent who can help you make your search easier. A sourcing agent is an expert who can guide you through the process and help you avoid common mistakes that new investors make.
An experienced agent will have access to deals that might not be available on the open market, which means they’ll be able to save you time and money by finding deals that would otherwise go unnoticed. An agent also brings massive value to the process because they know what questions to ask and how best to move deal forward for their clients.
Conclusion
We hope that we’ve given you some insight into how a sourcing agent can help you find the right investment property. We know from experience that it can be a long and frustrating process finding the right type of opportunities, but it doesn’t have to be! If you have any questions about this post or anything else related to real estate, feel free to contact us today.
