Does RE license help in buying out-of-state?

Question

Hey BPers!

I'm a fairly new RE agent (almost 1 year) and also new to REI. I hope you can help me in my understanding. I've read other BP posts on the advantages of having a RE license in buying investment properties. But, I don't understand how the license is an advantage if you're buying properties outside of your licensed state. Or, is it? Can anyone explain further? Thanks

Will Barnard · Answer

That is not correct. Your CA real estate sales license is for CA only and you may not represent anyone in any other state. However. You may receive referral fees from agents in other states.

Patricia Joseph · Answer

Thanks @Will Barnard for taking time to explain the benefits to having a RE license. I can definitely see the benefit in #1 when buying investment property.

Tim Johnson · Answer

From what I have learned, if you obtained your license in California than your able to be a legitimate sales agent in all 50 states. Somebody please correct me if I'm wrong.

Will Barnard · Answer

Having a re license for out of state deals is still beneficial in several ways.

1. As an agent, you should be familiar with contracts, disclosures, etc and at purchase, by going direct to listing agent, you can come in "unrepresented" and ask that the price drop by the amount of the commission that the seller no longer has to pay.

2. Referral fees. Any licensed agent can receive a referral fee from another agent from any state. Refer a buyer, refer a seller, and collect a fee.

3. Relationships - This is a relationship business and having a license provides additional beneficial relationships with other professionals out of state. Of course the license is not required to form relationships but having one can open doors to some that you otherwise may not have been able to make.

Patricia Joseph · Answer

@Bob Okenwa @Christopher Giannino - thanks for the info!

Christopher Giannino · Answer

One thing I might add is at my brokerage we have offices all across the world.  We have an internal directory in which I can look up agents across the world and refer a client to them.  Most (if not all) the agents are willing to pay some type of a referral fee so in a case where your brokerage offers something similar, you would be able to potentially receive a percentage of the commission.

Bob Okenwa · Answer

Yes, you'd need to be licensed in any state you plan to represent anyone (including yourself) as a buyer's or seller's agent.

Patricia Joseph · Answer

@Bob Okenwa - if I understand correctly I would have to be licensed in that state in order to represent myself as the buyers agent, when I'm buying my own investment property. Is that correct?

Bob Okenwa · Answer

It's not an advantage in the sense you could get a commission or MLS access out of state, but if you're an agent, you have insight on how to structure deals and negotiate and that is still a good asset/advantage.