3 Benefits to Getting a Real Estate Agent License

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I’m coming up on the one-year anniversary of the month in which I received my real estate license.

That’s right. I’m a licensed real estate agent.

Most people don’t know that about me, not even my closest friends. It’s not that I’m trying to hide it. It just never really seems to come up in conversation. I’m not running around advertising that I’m a real estate agent.

Why not? Because I got my license specifically for the purpose of investing in my own growing rental property business. In fact, my inspiration for getting my real estate license came from BiggerPockets. Last year, I read this blog post by J. Scott and it convinced me that I should pursue the benefits of getting a real estate license. So … I did. (Thanks, J. Scott!)

In this article, I would like to discuss some of the advantages I feel that I’ve gained as a result of having my license and why I recommend following this path if it interests you.

As a disclaimer, I absolutely don’t believe that having a real estate license is necessary for successful investing. There are thousands of incredibly accomplished real estate investors who do not carry a real estate license. Instead, they form tight relationships with other agents who bring them deals, and they also pursue off-market deals. I applaud them and fully support their decision.

To be clear: getting a real estate agent’s license is not necessary. However, in my personal experience, it has been beneficial. Here’s why.

1. MLS Access

As J. Scott outlined in his article, having a real estate agent’s license allows you to legally and legitimately access the MLS.

This provides two benefits. First, you can closely watch a neighborhood and spot a new property the moment that it comes onto the market. You don’t have to wait for an agent to find the property for you, or for a public website like Zillow to pull the data.

Secondly, you can mine lots of historical data. The MLS provides plenty of information about prices, comps, and all types of other valuable information. Yes, some of this is available through websites such as Trulia, Redfin, Zillow, and LoopNet, but the MLS is, and always will be, the gold standard.

2. The Ability to Form Relationships with Other Agents

Furthermore, as J. Scott also said, you have the power to make the other agent’s job as easy as possible. You can handle getting the utilities turned on for inspections, completing extra paperwork, coordinating with the closing attorney, and managing the title search. 

Volunteer to go above-and-beyond the call of duty. Do everything in your power to make the other agent feel like you’re easy to work with.

Agents who go out of their way to make the other agent’s job as easy as possible get rewarded with close relationships. And real estate is fundamentally a business that revolves around forming relationships with others.

If you’re well-regarded within your community, people will forward you leads and tips. One of my best properties, in fact, is located outside of a geographic area in which I normally search. I never would have spotted it myself. But another agent told me to check it out.

3. Collecting the Commission

I don’t want to overemphasize this point, because I actually believe that the commission is one of the less-important benefits of getting a license (relative to the other advantages that I have listed.)

However, it’s worth noting that as an agent, you’ll be able to collect a commission on the deal. If you buy a $100,000 house, for example, and each agent receives a 3 percent commission, you will collect $3,000 on the deal. After paying broker fees, you may net $1,500 to $2,500. (There is a wide variation in broker fees depending on which brokerage you hang your license under.)

While collecting the commission is a nice fringe benefit, I don’t believe it should be your primary motivation for getting the license.

As an investor, your job isn’t to make a little bit of cash on the side. Your job is to find and secure the best deals. Direct access to the MLS can help you find the deal. And speaking directly with the other agent — and giving that agent every reason to like you — may help you secure the deal.
 

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About Author

Paula Pant quit her 9-to-5 job, invested in 7 rental units, and traveled to 32 countries. Her blog, Afford Anything, shares how to shatter limits, build wealth and maximize life. (At AffordAnything.com, she shares EXACT numbers from all her rental investments -- costs, cash flow, cap rate; it's all published for the world to read.) Afford Anything is a gathering spot for a tribe dedicated to ditching the cubicle. Read her blog, and join the revolution.

23 Comments

  1. For a Buyers Agency and achieving a fringe benefit related to this, every situation is different. Definitely not a guarantee you’ll receive ‘commission’ and the zeal in providing this benefit is toward those agents who are fully active and servicing the public in comparison to those trying to take advantage of unfound money. The owner also must approve. In short sales, for example, banks almost never approve of this ‘benefit’ and must be notified well in advance. Retrieving a license definitely provides education.

  2. Paula, I’m in the same boat (got my lic to help my rental prop business). The biggest advantage to me is the ability to look at any property on my schedule without contacting an agent. This has been a huge benefit! I just got beyond 2 years and am now independent, which you may want to consider as your next step, depending on how it works in your state.

  3. I am just getting started. I have take the course for my state, passed the test and I am (very impatiently) waiting for the license in the mail! Again Thank You J. Scott! I would not have done it with out his encouragement through the podcast. I know I have learned more from bigger pockets than I learned in the 60 hour course I took, but the course was required and was made easy because I already had the knowledge tucked away in my brain from bigger pockets. THANK YOU PB!!

  4. Michael Dorovich on

    Hi Paula, great article.

    Which market(s) are you in? What is the yearly cost to have MLS access in your area?

    Thanks, Michael

  5. When I originally wanted to get into real estate investing, I read in a book that getting a license would be a good idea. What it did for me, though, was sidetrack me from becoming an investor.

    The problem was (at least here, in Texas), that if you get your agent license, you have to work under a broker. If you work under a broker, they want you to sell houses. Well, I already had a full time job, and there just wasn’t time for working my job, selling houses, and investing in real estate all at the same time.

  6. Hi,
    Thanks. This is a great article. I’m in a situation you were in prior of getting your license. Right now , I currently own rental property and did go to school just to get a license because I love RE more than Accounting(my previous work experiences). I would like to thank you for your article it motivates me although for now I prefer to be a stay home Mom until my son turns 4 yrs old. Currently have my Pre licensure certificate, I was going to take RE test right after I got it but because of me thinking be doing this in the next few years so I decided to just take my time which I realized its wrong, I’ve got to get this RE license before it’s too late and be worry free until I’m ready to start kicking again. Your my inspiration on this thanks for taking the time of making this article, very helpful. Best of luck to you.

    Thanks.
    El

  7. Paula,

    Great great great article. I have always been interested in real estate and just got my license a few days ago. Now that I have access to MLS, can you talk about some of the ways I can use it to begin investing? What kind of information should I be looking for? What kind of investments do you use MLS for.. flipping? renting? etc.

    I def. feel a bit overwhelmed and need to pick a direction to go in. Would greatly appreciate any guidance you can provide.

    Thank you,

    Ch

  8. Same thing here in Ohio Leslie. I thought about getting mine too, but I don’t have the time work under another realtor.

  9. I’ve been thinking about this for awhile but, because the prices in my area of California are a bit too high for suitable rentals, the benefits of me having a license may be small. Still, I think just studying for the exams would be really instructive.

  10. Paula,

    You are absolutely right! These are some of the reasons why I got my license while my wife is working on hers. Once she gets it, we will be working off her license to find/submit deals on our own. Getting the right data quickly is a huge plus.

    To Leslie A, you can get connected with a broker that doesn’t take much of a commission which means you don’t get all the bells/whistles. This way, you can focus on your investing and not selling. As for time, you can take online course and knock it out quickly so you can focus on your investing. Waiting on agents to help you may not play to your favor sometimes.

    Thanks for the article Paula!

  11. Thanks! I just got passed the test, and I am in the process of applying for my license. My husband and I want to flip more houses, but we were having a hard time finding properties. There is alot of controversy about having a license, and I wasn’t sure I had made the right decision.

  12. Dave Stratton on

    There are advantages and disadvantages to having your license depending on the state. I have a Georgia RE license which is currently inactive. The advantage of being able to have access to MLS and to be able view properties whenever you want is a plus. It is also nice to be able to speak with listing agents and also not having to wait on someone else to put in offers. It is a great education to learn the laws and how things work.

    There are also some disadvantages, especially if you are not doing it full time. First, you are a new agent so there is a learning curve. When you get your license they don’t teach you how to be an agent or deal with all of the paperwork. It is not hard but just takes time. In Georgia you need to work under a broker. So if you go with one of the big name companies they have a lot of training but they are also expensive and take more of your commissions. If you go with the smaller companies they are usually cheaper but not as much support or training. I worked for a small company but it still cost me over almost $2,000 a year even if I did not do one deal. Also many banks will not pay a commission if you are the buyer and the agent on a short sale or foreclosure. Because I own 7 rentals with my wife, all my rental income had to flow through my broker which delayed when I received the rent payments. You lose control, especially if you are use to doing everything yourself.

    I guess it is similar to the debate on if you should work on your own properties or hire a professional. Should you learn as you go as an inexperienced part-time agent in a tight market or hire a full-time agent that specializes with investors. I don’t know what the correct answer is but make sure you research the laws in your state and see if it works for your business.

    • Richard Adjou

      Why does your rental income flow through your broker? Do they handle all property management in Georgia through the broker? I believe in Maryland, if your list your rental on the MLS, the agent’s commission is 1 month’s rent

  13. Daniel Francis

    I couldn’t agree more! I think having your license gives you a competitive edge. You can stop screening out sellers and just GO to the house. Face-to-face is easier to make a deal. And since you have EVERYTHING to offer, your odds of coming out with a deal, even a listing, are so much higher!

  14. Lafontant Cherilus

    Paula – how did you go through the process of hanging your license and paying fees? I’ve thought about getting my license, but I have a full time job and I honestly would not have much time to go around selling houses, but I do like the MLS access part. Most brokerages charge you a fee to hang your license in addition to ongoing desk fees etc.

  15. Ryan Thiesen

    I had just signed up for the classes in my state to acquire my real estate license a few days before reading this post. It’s always nice to hear of something you are planning working out.

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