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Eric Wood
  • New to Real Estate
  • South Bend, IN
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Represent myself in my first ever transaction. Is this realistic?

Eric Wood
  • New to Real Estate
  • South Bend, IN
Posted Nov 4 2022, 11:55

Hi everyone! I have been interested in real estate investing for a long time and finally reached a point personally and financially where I feel like I'm ready to start. I recently passed my state (IN) and national REA licensing exams, but haven't yet hung my license. 

In the next ~3 months, my goal is to acquire my first rental property. Once my partner and I both graduate from school next May, I'll also be purchasing a property to house hack. I'm planning on mainly using my license to represent myself in transactions to save myself money via commission, while helping out some friends and family with a few transactions as well. I know that there brokerages out there who work with investor agents and have no problem with this type of arrangement, but I still feel a bit nervous. 

I've learned a lot during the pre-licensing course that I took, but I know that there is a lot of learning on the job that takes place as an agent. Is it realistic that I can find a brokerage to hang my license with that will be hands-off enough to let me "do my own thing", but will still provide training and enough support to make me comfortable representing myself for my first few transactions? My other plan of action would be to leave my license unassigned and work with a more experienced realtor for my first few deals until I feel more confident. Am I overthinking this? Is it worth giving up 3% on my first few deals to learn from someone else? Any advice is appreciated! 

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Amber Arwine
  • Lender
  • Chicago, IL
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Amber Arwine
  • Lender
  • Chicago, IL
Replied Nov 4 2022, 13:37

I just helped another realtor walk through their first ever deal (as both realtor and purchaser). I'm not sure about the broker side, but having an experienced lender will be key in your first few deals to help answer questions for you. I'm happy to help if you have any questions. 

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Nathan Gesner
  • Real Estate Broker
  • Cody, WY
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Nathan Gesner
  • Real Estate Broker
  • Cody, WY
ModeratorReplied Nov 5 2022, 05:03
Quote from @Eric Wood:

"A man who represents himself has a fool for a client." Abe Lincoln

Abe was talking about a man in court, but the same could be true for a man with zero experience that chooses to represent himself in a sales transaction. You may be emotionally involved and make unwise choices. As a new licensee, you have little knowledge of the market, contract law, real estate law, negotiation, or any of the other skills a REALTOR brings to the table. Finally, the commission for a Buyer's Agent is paid by the Seller, so you aren't really saving anything by representing yourself.

Until you gain some experience, I think it's wise to use a professional.

  • Property Manager Wyoming (#12599)

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Nate Sanow
Pro Member
  • I​nvestor & Agent
  • Tulsa, OK
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Nate Sanow
Pro Member
  • I​nvestor & Agent
  • Tulsa, OK
Replied Nov 5 2022, 05:23

Based on how humble you are, I think you will be just fine to self represent. If you go to a decent brokerage that gives a rip, someone (the broker, or someone they employ directly) should walk you through all the paperwork and logistics of what to do on your first few transactions. Not to mention, going somewhere with a spirit of collaboration the worst case is you pay an older and more experienced agent a Referal fee for consultation. Typically about 20% of your 3%. There is value in knowing what you don’t know. But if you are going to be licensed you will at some point face this giant. Why not process a file when you are your own client? 

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Dominick Johnson
  • Rental Property Investor
  • St. Louis, MO
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Dominick Johnson
  • Rental Property Investor
  • St. Louis, MO
Replied Nov 15 2022, 13:38

I'm sure most brokerages have people willing to teach you and free classes to train you. If not, they aren't worth hanging your license at. My wife is a realtor with Keller Williams and they are excellent at this. Interview different brokerages and see which one is the best fit for you. It's pretty nice getting that 2.7% kickback check when we close on an investment property that my wife is the buyers agent for. What better way to learn than on your own deals. You will build confidence for when you represent actual clients.

Also, if you go down this path of investing, there's a good chance you will grow to like that more than whatever W2 job you are pursuing after graduating. My advice is to save yourself the career change in 5 years and pursue being a realtor now. You'll likely make more in one commission than you can in one month making a $100k salary. This will speed up your investing portfolio, and give you the freedom to not sit in an office 40 hours a week.