Mortgage broker act as financial institution’s representatives to assist borrowers in obtaining some or all the funds needed for an investment property. Rarely will lenders advertise or recommend investment properties. However, lenders may be able to refer or direct you to a buyer’s (i.e., real estate or property management) agent if the borrower does not want to research to find an investment property. However, if a borrower chooses to attain a buyer’s agent, borrowers should inquire about the rates of several agents to get the best competitive deal and savings.
Self-research. The most cost-saving method for borrowers is to find the investment property themselves. Online property listings are accessible online, where the borrower can custom search settings based on the property type of interest, price range, and location or number of bedrooms and bathrooms. Borrowers can also “favorite” a property of interest to get subscription alerts, such as price drops, pending offers, the property’s general availability, or listing price. Information about the seller’s agent may also be on the web page listing, where borrowers can reach out and inquire for information about or tour the property.
Buyer’s agents. Engagement with an expert buyers’ advocate (i.e., agent) is a valuable service and successful resource for borrowers. Buyers’ advocates can provide borrowers with excellent returns with negotiation skills and investment strategies by considering the borrower’s finances and buying power. Most buyers’ advocates conduct market research to be aware of their localised area conditions, comparable sales, and property specifications to meet or match the property desires of each borrower. Some buyers’ advocates can even provide an established appraisal of the property of interest to present to lenders. The potential drawbacks in hiring a buyers’ advocate are paying their commission, which may be upwards of 2-3% of the property cost upon settlement, and being one of many clients, meaning the borrower may be competing for the time or attention of the buyers’ advocate. Before signing a contract to retain a buyer’s agent, the borrower is highly recommended to explore competitive rates and implore the hidden and other expected costs associated with their services.