Buying & Selling Houses

The Top 3 Reasons Why You Should Get Your Real Estate License

Expertise: Real Estate Investing Basics, Personal Development, Landlording & Rental Properties, Real Estate News & Commentary, Business Management, Flipping Houses, Real Estate Deal Analysis & Advice, Personal Finance, Real Estate Marketing
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Should you or shouldn’t you pursue your real estate license? I know I’ve written before on why you shouldn’t get your license, but here I’d like to explore the flip side of the coin.

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Read below to explore a few reasons why you should consider getting licensed.

The Top 3 Reasons Why You Should Get Your Real Estate License

1. You’ll learn the ins and outs of how real estate works.

The first reason you should get your real estate license—and probably most important one—is that it will help you jumpstart your real estate learning experience. You’ll go through around 12 to 14 weeks of classes, and you will learn anything and everything associated with becoming a successful real estate agent.

You will also learn other things like branding, marketing, lead generation, contracts, talking to buyers, talking to sellers, compliance, etc. Unfortunately, there are a lot of real estate investors out there who do not understand these basics.

This process will also help teach you how to do real estate the right way. There are a lot of cowboys out there, who do not know what they are doing. They break the rules and regulations on a daily basis. It’s making all of the other legitimate real estate investors look bad.

2. You’ll lower your risk.

The second reason is that it is less risky to get your real estate license and go through the whole process of learning how to do real estate the right way. In addition, when you do get your real estate license, you’re going to have to peg that license under a broker. Guess who is going to be overseeing your absolute every move, making sure that you are abiding by all of the laws and regulations, that you’re not doing anything shady?

Your broker.

So, you will be at a lower risk because you will have someone overseeing all of your work. Plus, throughout the process of getting your license, you will meet multiple people. You will meet other real estate agents, so the networking will be absolutely amazing. I believe the more people you speak to on a consistent basis, the more your mind expands and the more educated your decisions become. Therefore, you will make fewer mistakes, thus lowering your risk.

man sitting at desk working on a computer

Related: Should You Become a Real Estate Agent?

Another thing is, you’re not going to need that much money to start. If you’re looking at buying, fixing, and flipping—or if you’re looking at buying, fixing, refinancing, and holding—you’ll need $20,000 to $100,000 to get the process started. If you want to wholesale in a legitimate way, you should also have that much money set aside just in case you don’t perform on that contract. Then you can cover and close on that particular deal so you don’t lose your reputation.

Look, in my opinion, risk is associated with money. The more capital that you have to invest in a particular transaction or a particular deal, the more you are risking. The less capital that you have to invest, the less your risk is. In this instance, when you get your real estate license, you’re not investing any capital; you’re investing your time for the most part. You earn if you sell, and you don’t earn if you don’t sell. So, the risk is much lower than if you do not get your license and start the journey as a real estate investor.

Related: Answered: Should You Get Your Real Estate License?

3. You’ll reduce the hassle of starting out in real estate.

The final thing is that you’re going to reduce your overall hassle. What I mean by that is you now have your real estate license, you know how to do things the right way, you’ve got your network built, and you’ve met a lot of real estate agents who did that same course with you.

Now you’re working for a broker. I would expect your broker to have a full-blown support staff at your disposal to assist you with anything and everything related to performing as a real estate agent. Compliance, transaction coordination, contract reviews, web design, marketing, lead generation, discussions with buyers and sellers, training and education—you will have all of these things at your fingertips.

Otherwise, real estate might seem like a jungle. You don’t know where to start, who to talk to, or where to go. What getting a real estate license does for you is put you on the right track. You are focused on one particular thing and doing that one particular thing successfully.

When you don’t get your license, as I said, it’s a very tough world out there. You do not know what animal is going to come after you. You’ve got no protection from anything or anyone. You’re out there on your own. 

Any other reasons why folks should get their real estate license?

I want to hear from you below.

Engelo Rumora, a.k.a."the Real Estate Dingo," quit school at the age of 14 and played professional soccer at the age of 18. From there, he began to invest in real estate. He now owns real estate all over the world and has bought, renovated, and sold over 500 properties. He runs runs Ohio Cashflow, a turnkey real estate investment company in the country (Inc 5000 2017 & 2018) and is currently in the process of launching a real estate brokerage called List’n Sell Realty. He is also known for giving houses away to people in need and his crazy videos on YouTube. His mission in life is to be remembered as someone that gave it his all and gave it all away.

    Conway Churaman from New York City, New York
    Replied about 2 years ago
    I am sorry but I do not agree with number 1. The course I took prepared me to take the state exam and nothing more. Everything that you mentioned I would learn I did not. I just learned how to pass a test. Now I am trying to get into a work environment that would actually teach me the rest.
    Michael Lee Investor from Coppell, TX
    Replied almost 2 years ago
    Isn’t it odd that the licensed people say yes and the one’s that do not have one say no. I agree about the learning thought but I do not think it make’s people any better. I was a real estate broker in Texas for about 30 years but never did that full time but I can say that it helped me but did not make me good or bad. Maybe I did not do that full time was that there were too many crooks or dishonest licensed people involved.
    William Butler from mahopac, NY
    Replied 22 days ago
    I am a full time realtor and although your credentials are impressive you dont need a real estate license to get ahead in real estate investing. I have an investor who as a matter of fact just looked at a million dollar buy and hold investment in yonkers today. i have been helping him find reos and other good deals then after he renovates, list the flip. I have been working with him for 10 years. Best thing for some one who wants to invest is learn as much from this site, find someone to mentor from, and or call a realtor or get someone who invest to refer one who knows what they are doing working with investors. its a pretty expensive way to learn. i pay local, state, and national dues, i pay for an app that allows me to open electronic lock boxes which is essential, plus i pay whats called errors and omissions insurance (which is insurance policy a broker makes you pay for that will cover you and him if you lie cheat steal, or are sued and need defending. note this insurance does not cover any fair housing lawsuits) , every two years taking classes required to keep your licenses for continuation ed. that costs me a a year about 1500 bucks. that is not to mention my designations in commercial and investment real estate, new construction, and working with developers of a subdivision, which total cost me another 1500 dollars to attain. and as the first fellow said after passing my re exam i knew all the things i should and should not do not to lose my license, and took me a few years to figure it all out. i too started out part time but moved to full time because i could not service my clients as they should of been. i got my licenses in 2007 when the market crashed and too a long time to make any kind of money. granted i was not investing. i would advise again look at what this site has to offerin way of information, network with people and work with realtors and check youtube for content as well. i was turned on by a pod cast for Chris Voss who wrote never split the difference and revolutionized my negotiation skills and have won many deals because of it. but getting your license does not thing unless you then get a brokers license, open your own shop and just sell your products. if you have a great realtor they will send you deals on the market, and run with ones who work in residential and commercial like my self. but sorry my friend your 3 points dont hold water advising poeple to get some inside track by getting there re license. but just my opinion
    Alexandra King Real Estate Agent from Santa Barbara, CA
    Replied 22 days ago
    I am a realtor in Santa Barbara CA where the average 3/2 SFR goes for around 1,200,000.00 - in average to bad shape. So, this statement is not true: >>>>Another thing is, you’re not going to need that much money to start. If you’re looking at buying, fixing, and flipping—or if you’re looking at buying, fixing, refinancing, and holding—you’ll need $20,000 to $100,000 to get the process started.<<<<< Also, I have been prospecting for 14 months and have yet to have a transaction; in a county with 1400 agents and 93,000 people, the chances of getting business - at least right away- are slim to slimmer. Additionally, the 20% who ARE succeeding are spending between $2000/month -$200,000/year to market their businesses. As I have no $$ to market with, my launch as an agent has been pretty pathetic. If I wanted to buy an investment property here it would cost me 6+ figures just to get a foot in the door.....But, I plan on keeping on as this is the only route to investing that I have.
    Trish Giassa
    Replied 22 days ago
    So it appears someone else said this but it bears repeating. Getting a real estate license is good for learning the real estate commission rules and passing the exam to become licensed. I am licensed in two states, and neither state classes taught me anything about the day-to-day business of real estate. I will also stipulate that few are the brokers that provide thorough training and oversight. So, if you're going that route, ask and make sure the training and oversight is truly available. Don't just have them tell you. Ask other newbies what their experience has been like and then determine if that is the best place for you. Whatever you decide, know that real estate sales is very simple ... but not easy. Competition, legal constraints, and the upsides are significant. Good luck! :-)
    Cory R. Realtor from Ocean City, NJ
    Replied 22 days ago
    I’m a recent college graduate and I got my RE license. Like other people said, the course doesn’t teach anything about day to day. Although I haven’t invested in anything yet, I know the license has given me the confidence. I’m understanding the steps and how it all works. I do foreclosures and was dropped into the mist of it. For the personality type like I have it, I know it will allow me to make the push in to investing rather than waiting on the sidelines. I do have to say, if anyone’s deciding to be a Full Time RE agent right out of college and not making the best $, it will be quite a challenge getting a loan without outside help.
    Troy Gandee Real Estate Broker from Charleston, SC
    Replied 22 days ago
    I agree. I'm an investor and BIC. I don't think you absolutely have to have it, but there's no reason not to. You'll get more understanding of the process, have more access to date and properties and you're just adding more tools to your tool box. A lot of my investor-agents are able to monetize marginal deals that won't work as an investment because they're licensed. You don't necessarily have to be a Realtor, but if you want to be excellent at real estate investing, why wouldn't you spend the time and money to learn about one of of the primarily sources of lead gen, procurement and protocols? A lot of people are criticizing their licensing courses. The licensing courses aren't designed to teach you the day to day ins and outs. They want to teach you how to comply with the law. Your BIC/Company should be the one to teach you the ins and outs. Every agent has different goals and many have different business models, so why should the licensing course spend a whole day on specific properties or practices that won't be of value to the whole class? If you want to sell land, find a BIC that understands that. If you want to sell multifamily, find a BIC that has experience with that. If you want to sell luxury, find a company that excels in that. The licensing courses aren't there to teach you things like how to get the best response rate on marketing. They're more concerned with teaching you how not to violate things like the ADA or The Fair Housing Act and rightfully so. They shouldn't be concerned with whether you pay for billboards or mailers. That's a personal choice about your small business.
    Cameron O'Connor Rental Property Investor from Indianapolis, IN
    Replied 22 days ago
    I have gone back and fourth on getting a license. I currently work a full time job with a construction management company, and am a RE investor outside of this. I enjoy looking at properties all the time. I am interested in it for the knowledge, networking, and ease of exploring properties at will. This is how I spend most of my free time. Not to mention, it seems advantageous to make some extra cash for my next down payment that closely correlates with the amount of hard work put in, in lieu of a salary. Is there any separate license that is needed in mid-large multifamily (10-150 units) or commercial properties? Any negatives or reasons not to get a license? Being required to disclose unnecessary info? Being bound by certain laws that others are not? Any disadvantages to this over a non-licensed investor?
    Lan Nguyen
    Replied 21 days ago
    This is Lan Nguyen . I am an investor right now in Texas . After all I just jump in to get realtor license . I think it ‘s so helpful for my Real estate investment. For sure you know in and out . You are understand a compliance. You have the right to sign a contract for yourself or your clients . You have no gate keeper to stop you find deals in any area of real estate from residential to commercial but give you a big net work friends and clients .It helps Lower risk for your investment like Engelo said . I come to get license after I do fix, flip and rental . It helps me do my investment much better . I know some realtor can get you into the problem when they did not write the contract correctly. Not everyone think the same but if you can find some one allows you to see how they do find , fix , flipping house from beginning to the end . You know the license work well . You don’t lose a lot of your commission from your own property when you buy and when you sell it . Everyone comes from different views to have different opinions . However, the license you have is a little investment for yourself to make a lot money if you know how to do it. Also this real estate Education is cheap in this country but the law suites is too expensive to pay for it. Remember ,at the end of the day you are on your own .
    Eric VanKirk Realtor from Denver, CO
    Replied 18 days ago
    I have been licensed in two states and can say I learned nothing about ‘branding, marketing, lead generation, contracts, talking to buyers, talking to sellers,’ during my initial licensing classes. I did learn about compliance and a few other legal things, but to really learn how to sell real estate takes either a mentor, a company with a training program, or lots of reading and asking questions from multiple sources. I prefer to have my license for a few reasons. 1. I am required to stay up on contracts and regulations within real estate so I know of any changes that come about. 2. I have direct access to active, under contract, and sold listings, and I feel that gives me a better grasp of housing values. 3. When I market to properties, if I find a viable property that I cannot buy, I can represent the seller on the deal and make a commission. I also represent myself when buying and selling my houses so I get the commission on those as well. One thing to be sure of if you do have your license is to make sure you are open and honest with the seller. This is especially true if you are buying the property to flip. It’s best to get it in writing that they understand and agree to what you are doing so they cannot come after you later. If they refuse, move on to the next deal. No deal is worth losing everything over. Or, you could just know a great Realtor and work with them on your deals…
    Michael P. Lindekugel Real Estate Broker from Seattle, WA
    Replied 16 days ago
    with a real estate license many E&O insurance policies wont cover your own deals when you represent yourself. there are disadvantages in WA state. if you represent yourself as the buyer in a transaction with an unrepresented seller, then you have FMV disclosure duty requirements to the seller. Wholesaling would be difficult. the NWMLS rules require that all your transactions are entered into the NWMLS. pocket listings and a failure to input carry very steep fines.