Topic Thursday #23: Stop Losing Deals: Understand Investor Terms That Trip Agents Up
Agents and investors don’t always speak the same language. A term like “cash offer” or “underwriting” means one thing to agents and something completely different to investors. This can cause confusion, frustration, and even lost deals. In this week’s Topic Thursday, we tackled those gaps head-on and shared how to communicate clearly so investors, sellers, and agents all stay on the same page.
Watch the replay below or continue reading for the Q&A.
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This Week’s EZ Success Stories
Zoreena’s 12 properties submitted in one week after going through the EZ investor workshop.
Ryan says his EZ Investor deal was EZ – the investor really handled everything.
Adam went 10 for 10 on listings, averaging $32K–$40K profit per property while agents were fully paid.
Joy’s Denison, TX case: Investor solved family drama by relocating the seller’s mother, clearing the way for a successful listing.
Top 3 Quotes from the Session
“Investors aren’t just looking for the 3%. They want spreads too. That keeps everybody happy.”
“If you hear ‘cash offer’ from an investor, it doesn’t mean cash at closing. It means get it into contract.”
“Call Novation a partnership agreement. Sellers understand that. It’s more palatable than legal jargon.”
Questions & Answers
What’s the rule on Buyer Premiums?
Buyer Premiums cannot exceed the appraised value of the home. This protects buyers, sellers, and investors while keeping transactions compliant.
When listing an investor property, what price do we start with?
Always use the contract price as the starting list price. The Buyer Premium is then added on top.
What happens if only one offer comes in?
The contract is written for the contract price plus the 10% Buyer Premium. Even with one offer, the investor still nets the 3% minimum and often earns spread on top.
What can extra Buyer Premium funds be used for?
Leftover funds can be applied to:
Interest rate buydown to help buyers qualify
Closing costs
Paying off debt (such as car loans or credit cards)
Do investors only expect the 3% insurance policy?
No. Investors expect spread in addition to the 3%. Example: Adam went 10 for 10 on EZ listings, averaging $32K–$40K profit per deal while agents were fully paid.
What does “underwriting” mean to investors?
For investors, underwriting means pricing the home — essentially running a CMA to determine value.
What does “cash offer” mean in investor terms?
It means a non-contingent offer that gets the property under contract. It does not always mean all cash at closing.
What does “as-is” mean in investor terms?
“As-is” refers to the current condition of the home. Investors calculate value using the 70% rule, minus repairs and the Buyer Premium.
What’s the difference between a cash price and a novation price?
Cash price: 70% of as-is value.
Novation (partnership): 80% of as-is value. Seller keeps taxes and mortgage current while the investor does repairs and resells.
How should agents explain Novation to sellers?
Use the term “partnership agreement.” Sellers understand this better than “novation,” and it avoids confusion.
Why open title and escrow early?
Opening title early uncovers liens, judgments, and title issues before listing. Problems are handled by the investor, not the seller or agent.
What is a mechanics lien and when is it used?
A mechanics lien protects an investor when repairs are being made. It’s rarely needed because most EZ deals involve minimal repair costs, but it can be used as a safeguard in certain states.
What is the agent’s role with investor listings?
The agent’s job is to:
Take photos
Put the listing on MLS
Complete paperwork
Communicate with the investor, not the seller
What if the property is in poor condition or messy?
Document the issue and report it to the investor. Do not address it with the seller.
How do you handle family drama or seller resistance?
Turn it back to the investor. Example: In Denison, TX, an investor resolved a family dispute by moving the seller’s mother to an apartment, clearing the way for a successful listing.
What is investor psychology?
Most investors close only 1% of leads while carrying heavy overhead (call centers, VAs, managers). EZ changes this by giving sellers four fair options: Cash, Novation, EZ Investor Listing (10% Buyer Premium), or Traditional EZ Listing.
What if investors call asking for off-market deals?
Invite them to the EZ Investor Workshop. Many are inexperienced “wannabe” investors. Serious investors will put down non-refundable earnest money.
What’s Next? Get Connected and Keep Learning!
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EZ REI Club: Join Here
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