I’m coming up on the one-year anniversary of the month in which I received my real estate license.
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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 â and giving that agent every reason to like you â may help you secure the deal.