What to do While working towards R.E. License?

Question

I'm often asked the question, "what are some of the things that I can do while working towards obtaining my real estate license?"

I thought it would be helpful to share my personal experience and ask for suggestions from the group.  So please add to this thread with helpful positive input on some of the profitable things that you have done to generate cash prior to obtaining your license......thanx

First let me state what can't be done...."It's not legal to practice real estate without a license."  This rule is a strange quagmire because (correct me if I'm wrong) but, without being currently licensed or having held a license in the past, one does not fall under enforcement of any regulatory body.

It's sort of like eating from the tree of the knowledge of good and evil.  Until we learn what's wrong, there's no real accountability except the inability to be paid from the Hud-1 statement as a service provider.  (All monies exchanged in a real estate transaction must be reflected on the Hud-1 statement).

This rule mainly applies to unlicensed individuals who mis-represent themselves as possessing valid licensing or, to individuals who work within real estate brokerages but are not licensed.

Here's an interesting gray area.... As long as a seller has not listed his property with any real estate brokerage or firm, he can basically employ what ever legal means to market and sell his property.

So what I did prior to obtaining my licensing was to contact Fsbo's and ask them if I could send them buyer leads for free.  I even went so far as to have them sign a short form stating that it was ok for me to advertise their properties.

Then I advertised the properties online, using rags, and bandit signs.  After I gleaned several of the prime leads,  I contacted a friend who was a broker and flipped the leads for her to work with them.  She was kind enough to offer me a signup bonus to join her brokerage once I finished my classes which took 30 days approximately.   Said bonus (which were in no way related to the free leads that I gave her....lol) and, was to be paid after I completed licensing.

Because I held a mortgage brokerage license at the time, it turned out being a sweet deal.  I was able pull credit, keep the cream of the crop and originate the mortgages on most of the good leads.

The longer I've been in business, the further I get from the gray areas.....

Dick Green · Answer

Sorry if I mis-lead anyone with that brief overview.  I don't advocate any actions outside the parameters of the law.

I should have mentioned that at the time written about in the post, (many years ago), I was a licensed Mtg, Brkr.

Texas allows both Mortgage and Real Estate Licenses to be held at the same time.

As a Mortgage Broker I often worked with and still work with FSBO's.  I help them sell their properties by offering free advertising.  (something anyone can do)

note:  the goal isn't selling the fsbo, but compiling qualified leads.

What I did years ago to jumpstart the real estate side of my business was, to simply hold on to some of the leads for future use since I knew that I would be obtaining my real estate license.

Hope that clears things up....

Minna Reid · Answer

Yeah that sounds illegal. You cant collect money from selling other peoples real estate unless you are licensed to do so. Unless of course you have an interest in the property.

Will Barnard · Answer

Basically, the scenario you laid it is just another way to word acting as an agent without a license and you 'could have' been in trouble for it. (Glad that was not the case) Either way, I would not recommend that be repeated. In CA and many other states, it would be a no-no.
            
            If you wanted to do that process legally, why not take control of the property via an option contract or warranty deed/grant deed and then market the property and keep the spread. It would be legal and everyone is happy, seller, your end buyer, and you. You could even create a sub2 transaction on this and stay within the laws in all states.

Mark Brian · Answer

Since each state is different on their viewpoints regarding what is allowed for the non-licensed, I would be very careful. I would not want to stand before a judge and plead ignorance of the law, because the judge ain't gonna care.
            
Not being licensed does not remove the responsibility to obey the law. If by the law in your state, you are not to practice real estate without a license, then don't.

But the difference could be whether or not you have an "interest" in the property in my state, at least so I have heard. But very recently, I got an email about the state cracking down on people practicing real estate without a license. I would not want to be the test case in our court system.

Andrew Sanchez · Answer

Very interesting, i'm a bit confused though.  Need a little clarification, heres what i think:  You're advertising fsbos to find buyers/potential leads, and you send them over to your broker/friend so they could sell to them.  Am i anywhere near right? lol

Anyways yeah i might try that, i'm taking my classes right now, trying to see if theres anything to do pre-licensing.

What i am thinking of and suggesting also is interning for a brokerage, getting a head start on some experience.  The more experience the more money you'll start making faster :D.

Cheers