What are the biggest obstacles that a licensed agent face when tring to get into investing? Wholesaling to be exact. Thanks in advance.
Apart from the standard obstacles to wholesaling, I think it may be advantageous to be licensed, at least in my area of the country.
I know of a licensed real estate broker who does a fair bit of wholesaling and his access to MLS, among other things, helps him find properties a little easier than the rest of us.
As well, and I'm speaking only with respect to Washington state, but as a licensed real estate broker he can provide "referral fees" to pretty much anyone. Without a license, giving or receiving fees is a violation of state law. For example, he can provide a referral fee upon the closure of the deal to anyone he wishes. I however, and only able to provide referral fees regardless of whether the close or not.
Obviously, others here will offer their own unique insights, but I think the bottom line is that it's a plus to be licensed.
Originally posted by @Patrick Britton:
As well, and I'm speaking only with respect to Washington state, but as a licensed real estate broker he can provide "referral fees" to pretty much anyone. Without a license, giving or receiving fees is a violation of state law. For example, he can provide a referral fee upon the closure of the deal to anyone he wishes.
Interesting, that is clearly illegal in MD. A licensed person cannot pay referral fees to anyone other than another licensee. Whereas an unlicensed person can. (But it is Illegal for anyone unlicensed to accept it.)
Ned the above statement is incorrect I believe this fellow meant to say HE IS NOT allowed to pay referral fee's to anyone who is NOT an agent.. It is not legal in CA OR or WA were I do business to pay anykind of referral fee to a non licensed agent IE broker.
What non licensed folks do between themselves of course is one thing. but a RE agent amy not pay a non licensed person any kind of referral fee period.
The disadvantages of being licensed is, you have to have your broker's permission to buy investment property. This is different if you are a licensed broker.
An agent, who works under a broker has a lot of disclosure rules set up by the National Association of Realtors, Association of Realtors at the state level, and additional rules at the local board of realtors. It is usually related to disclosing to all parties involved in the transaction that you are a licensed agent. If you take advantage of people as an agent, your license and your broker's license are in jeopardy.
slight correction the Nar does not create disclosure rules.. state law does. The rules within the board of realtors is related to Ethics not law. State LAW is what dictates disclosure of licensure not the Board of REators or NAR. But agree if you take advantage of buyers or sellers as a licensed agent you can lose your license no doubt
The biggest disadvantage is that as a licensed professional your are bound by the state laws regarding Real Estate. So, whenever your buying or selling in my state I must notify the other party. You have advantages to data that the public can not see which creates an uneven playing field. You are apart of an association which over see ethical practices.
Some of the teaching at some of the seminars are not ethical. I did not say all seminars.
You can not offer referral compensation.
I don't focus on the disadvantages, I see how my knowledge can assist other investors. Like when I see a landlord ready to evict a tenant without understand the laws that govern a proper eviction. I normally let them know that they need to seek the assistance of a lawyer before they break the law and land in a see of legal fees.
We can still invest, we just follow different rules.
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