Should I get my real estate license?

Question

I am interested to hear from investors that got your real estate license.  I'm thinking about taking online courses (any recs?) but am wondering if it's really worth the time/money if I don't want to buy & sell homes for any other reason but to buy our own investment properties.  Do I have to join an agency afterwards?  I live in Nashville, TN and am a newbie.  Thanks!

Joe Fairless · Answer

Lindsay M. I used to say "nope" but then I read the book The Contrarian Playbook and the author is a huge proponent of getting your license because he makes good cash on the acquisition of the deals. Ultimately I think it is a good idea if you don't mind the ongoing training requirements and fees. I'm not an agent but might do that in the future.

Jarrod Weaver · Answer

@LindsayMosayebi often deals fail with license holders because many hold agents in similar esteem with used car salesmen. Rightfully so because many in the industry are complete idiots or self-serving jackasses. If you have the chance to show that you are an intelligent solution creator only then will you find success. The license creates an initial barrier that has to be overcome.

Michael Jobe · Answer

This question pops up all too often on the forums and you'll have people arguing all day about getting licensed versus not getting licensed. I'll offer my opinion...

Get it! But don't do the online course if you can make it to the live class. You'll make more connections and get a better grasp of basic real estate concepts by attending an actual class versus doing it online. I recommend getting licensed because it will pay for itself many times over as well as put more money into your pocket. Be sure to disclose that you're an agent every time you get ready to do a deal.

For example, let's just say you're about to buy a $200k property that you plan to flip for $250k after you sink $10-20k into rehabbing the place. When you purchase representing yourself as the buyer's agent, your split of a 6% commission on $200k is $6k. (granted, some sellers tend to fight paying an agent's commission when said agent represents themselves but I digress). Then when you sell the property for $250k and you are your own seller's agent, that's another $7500 as your split of a 6% commission. So you see how those commissions can add up quickly especially if you're doing deals with those kind of numbers on a regular basis.

I will say however that if your time will be better spent on other activities related to your business and you won't miss that money then by all means forego the licensing process and find yourself an investor savvy real estate agent. Either way be sure to let us know what you decide. Best of luck to you!

Jarrod Weaver · Answer

Holding a license can be a drawback when investing. Professional investors and agents do a great job making their deals as honest and transparent as possible. Problem is that a license makes you a target for law suits. Because a license makes you an "expert" you must disclose your status at the first contact on every deal. Some buyers and sellers are resistant to dealing with a licensee.

Also the time/expense to get and hold a license isn't small. Like any other portion of your business it may make for financial sense to pay for the service than do it yourself. It is likely that you will find agents in your market who are knowledgeable and can help your reach your investment goals while offering discounted commissions if you do multiple deals per year.

Realtors are no different than plumbers/electricians/HVAC/etc - all cheaper to buy the service of than becoming licensed to do.

JOAN DICKIE · Answer

Lindsay M. , one of your concerns was having access to leads.  Having a license doesn't guarantee access to leads.  Actively and consistently lead generating  gives you access to leads.  An actively lead generating investor will get more leads than a licensee who sits at an office waiting for the phone to ring or their broker to feed them leads.

I think one of the hardest parts at the beginning is knowing how to solve difficult issues that always arise during the escrow or closing process.  Belonging to a brokerage where you can ask for advice, or learn by listening to others problems would be beneficial.  Or you could work for another investor and have the backup that way.

Lindsay M. · Answer

@David R. - thank you!  I hope you are right.  Good luck to you too.

Lindsay M. · Answer

Thank you for all of the advice.  I can see I need to continue my research and set some firm investing goals for the next year to see if the cost and liability are worth it at this time.  You all have given me MUCH to consider.

@Mark Brian - I'm not planning on selling any of the properties I buy, so I would not gain that benefit you mentioned.  I need to do more research about the liability aspect, thanks for bringing that to my attention.

@Derek Smith & @Jarrod Weaver - can you tell me a little more about this... why might a seller pass on my offer if they know I'm a licensed?  Because of the commission or another reason?

@Wayne  Woodson , thank you.  I do need to decide how active I'm going to be and that will help me figure out if this is worth it.  If I decide to go forward, I think a smaller, mom & pop broker would be more my style.  I can seek out my own professional development and prefer to pay less.  @JOAN DICKIE , thank you!

@Michael Jobe , I really appreciate the scenario & advice to take the course in person.  One of the reasons I would like to get my license is that I haven't found an agent here that is investor-savvy.  I am scouring MLS constantly (I have the automatic listings sent daily, as @Diana Kroll mentioned), Craigslist, HUD, etc. and then give away 3% commission when I do a lot of the legwork to find properties.

I envision that agents get the lead on more properties before they hit the market...or maybe I just don't know enough people in the right places yet!

Mark Brian · Answer

Not sure about the laws in Tn but in most states you will have to "hang" you license with a broker/company.

But this means getting access to the MLS. And then you will be able to find the deals yourself plus collect commissions when you buy.

And when selling your properties, there still is nothing that beats the power of having a property in the MLS. Instead of just you trying to sell it, it means every agent in the MLS will want to sell it to get that commission. Depending on the MLS, it will probably be automatically feed to the BIG real estate websites for maximum exposure.

There are costs to having a license. But these are business expenses that you should be able to write off. How much depends on what company you are with, the MLS dues, the fees, the E&O insurance, etc etc.

You must also consider the liability of being licensed. This is the reason that some say to not get licensed.

Do a search here on Bigber Pockets because this has been asked many times by others. Lots of good pros and cons discussed in the previous conversations.

Derek Smith · Answer

Lindsay M.

This is my personal view on obtaining a real estate license. It is a MUST! Yes, you'll have business expenses associated with the license, however, the power you receive in return is worth more value. I recently enrolled into classes myself in order to take more control over my real estate investments.

Now, in order to buy and sell property you'll have to be an independent agent for a broker regardless if you're only buying/selling for your own personal gain. In addition, if you represent yourself in any way shape or form that must be disclosed.

Account Closed · Answer

Hi Lindsay.  I am also new to the site.  I have a feeling you are going to find such an agent here on biggerpockets.  Good luck.

Should I get my real estate license?

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