Hi! I have been considering getting my real estate license for a while now but I'm also currently learning how to invest in properties So, should I get my real estate license if I plan to be an investor or would that be a conflict of interest?
. Yes you should, no it is not.
Not a conflict of interest at all. In fact, you make commission off your purchases/sales :) My goal was always to be a successful investor but I became an agent to expand my knowledge, learn the market and to network. I stand by my decision and am very happy I became an agent, I get to work with a lot of real estate investors too!
@Kendall Shelton it depends on what you want out of the license. There are plenty of us who are both investors and agents, but the real estate license doesn't really provide any insight into investing. The course work is mostly about compliance, and you don't even fill out a contract here in Illinois until you are active as an agent and have passed the test.
Get your license!
I found some of my best, most profitable flips through being first on the scene for a listing presentation. As long as there is full and complete disclosure to the clients and customers, you are golden.
When first getting your license, did you just tell your brokerages who sponsored you that you’re also an investor? Are most typically okay with that? Thanks in advance!
@Mariah Talicuran , when I first got my license I told my sponsor I loved the real estate business and wanted to be an investor as well. His answer: "we love people who want to list and sell and invest for their own account".
Don't be afraid of being open about your intentions--it has to be a good fit for you and for the office you are joining. Relationships built on trust and hard work will last. Being 'slippery' can get ya squished.
Good luck--please let us know how you make out!
Well that is a wonderful response, which it sounds like you’ve done well for yourself . I can’t wait to get started. I am definitely someone who loves honesty, trust and building long term symbiotic relationships. Thanks for the insight and I’ll keep you posted!
Ok! Thank you everyone for your help!
As mentioned above it only becomes a conflict if the proper disclosures are not given or disclosure is given in the wrong order. If the seller is not informed properly of the situation it can give rise to a situation where the seller relies on your representations as a real estate professional and/or shares confidential information with you thus creating an implied agency relationship. If you do not give them a fair and accurate representations that are also in their best interests because you have an interest in the property then it can raise liability and ethics issues. State's have agency laws to protect consumers from unscrupulous business practices like this that use a position of trust to gain confidential information.
For example: A Realtor who is also an investor gets a listing presentation set up like mentioned above; they go to the listing and represent themselves as a listing agent only. The house has a market value of about $250,000. The Realtor tells the client they can sell it for $240,000 but it might take 6 months. The Client then begins to reveal confidential information about their position because they now trust the Realtor and are assuming this person is talking to them as their agent. The client reveals that they really need to sell it as quickly as possible and might take as little as $210,000. The Realtor in this situation then tells them they "have a client" who might be willing to affect a quick sale. Because the Realtor went into this posing as a professional that simply wants their listing and nothing more they now have personal confidential information about the seller's position that any other buyer would not have, and they have that information because they created an implied agency by acting as if they were there to represent the seller and the seller's interests.
Be very careful not to create an implied agency relationships with potential sellers. Some licensed real estate agents have the strategy of using a listing presentation as a pretense to get confidential information for buyer's they represent. That is unethical and against the code of conduct for the NAR and against many state laws. Be sure to read and understand your state's laws with regards to agency and be sure to immediately inform the seller's of interest in the property that may conflict with theirs. These types of situations are often navigated improperly by inexperienced professionals. Be sure to involve your broker on deals like this because I guarantee you they want to know about it because you're putting their butt on the line too.