To get the license or no?

Question

Do I get my license or no? I love RE. Have a STR, a few MFH, and a few small commercial buildings. Working now on our first flips with a partner - who has a bunch of SFH. I grew up around RE as my mom was a top agent in the area. I want to go RE full time and determining if it makes sense to get my license? Both to save on commission, find deals first, but also would like to get into the buy/sell side.

Kevin Sobilo · Answer

@Cory St. Esprit, a few thoughts:

1. @Bruce Woodruff makes a valid point, BUT that doesn't apply to everyone. Many people would rather take the commission rather than the discount because they want the documented self employment income.

They might want to show that income for future borrowing needs or even to boost their future Social Security benefit. For example, someone who is 60 years old and near collecting their retirement benefit may want to raise their average wage by showing good income the next couple years before they start collecting.

2. I agree with others though that commission savings are not the main draw unless maybe you are a VERY active developer or flipper.

3. There are other reasons a license is beneficial though. It gives you insight into what other investors are doing! Working with them as clients you get to see what is and isn't working for them. Learn from their successes and failures without risking any of your $$$.

4. @Bo Smith, isn't entirely correct. While many good deals are found off market. There can be some smokin deals found on the MLS. A deal is what YOU make of it.

A small example, I bought a property off the MLS where the tenant would not allow access and the listing agent was from another county.

I made 2 simultaneous cash offers and had no competition because nobody else would bid without seeing it first! I found the seller had no lease, no deposit, and no keys! So, I negotiated a LOW price the more they came to realize what a pickle they were in.

I got the property WELL under ask when it should have sold for full ask or a bit more!

5. Having a license can keep you engaged and motivated! Working in real estate every day keeps you up to date on changes in the law, market, lending, etc.

6. You get access to the MLS, lockboxes, and well vetted forms!

You can pull comps, prospect expired listings, look at old pics of listings from years back etc. You can show yourself homes at your convenience. You can use well vetted forms to rent out your properties without having to pay a lawyer or anyone else for something of lesser quality AND they are updated regularly to conform to changing laws and norms.

7. Even if you later escrow your license, they can't take away the knowledge and experience you gain.

Matt Dingus · Answer

I get this question a lot. I never recommend getting your sales license really if you're just looking to use it for your own investing, finding deals, etc. I'd more so recommend finding a great agent to do that for you and add them to your team. If you're thinking about doing it to help others buy/sell and looking to create an active income stream where you're dedicating a large part of your time into it - then it can be worth pursuing and carrying. So really just comes down where you want to focus your time and what your goals are with RE.

Rick Albert · Answer

The mistake people make with this is as a real estate agent you aren't in the business of selling homes. You are in the business of client acquisition. That's very different than investing in real estate.

There are also yearly fees and expenses that go into being a RE agent, so unless you are doing a large volume of flips, the savings isn't really there, especially when you factor in your time spent on marketing, showings, etc. Evaluating deals, managing construction, etc. might be a better use of your time.

I tend to disagree with Janice. You lose control of your time because you have to sit open houses, do showings, managing paperwork, etc. I also don't see how you would get "early access" that an agent wouldn't otherwise provide you. The Clear Cooperation Policy restricts pocket listings (not that they don't happen). As a matter of fact if you are a licensed agent, I've seen investors LOSE access because the agent with the deal knows they aren't getting the buy side or the listing, so they are going to present it to someone else first (super unethical in my opinion unless already discussed with the seller, but it is what it is). I've seen it backfire.

Marcus Auerbach · Answer

Don't - part time agents suck. You would never hire a one, so why would you do that to yourself? It should be a requirement to transact min 12 deals per year or loose your license.

Jorge Vazquez · Answer

I wholesaled for about 10 years before getting my license and heard all the same warnings about extra liability. In practice, it was the opposite. Being licensed made me more informed and sharper on both sides of the transaction. I understood contracts better, caught issues earlier, and could clearly explain things to buyers and sellers. As an investor, it also let me participate on both sides of the deal and not leave money on the table. My income grew roughly 25% year over year, not because I worked more, but because I worked smarter.

Mohammed Rahman · Answer

Hey Cory,

Maybe a better question is: “Do you want to be the agent (or at least have that option), or are you happy being an investor who partners with one really good agent?”

Getting your license can give you some advantages (saving on commissions for your own deals, earning commission, and getting earlier access to inventory), but the downside is the time and effort required to maintain it. I agree with @Matt Dingus - it really comes down to where you want to put your energy and what you’re trying to achieve long term.

If your main goal is to scale as an investor and you already have a strong agent relationship, you might not need the license right away. If you see yourself eventually helping other investors buy and sell, or want full control over how your own deals are marketed, then the license starts to make a lot more sense.

Andrew Glisson · Answer

I actually had my license and dropped it.

Between compliance, brokerage fees, insurance, MLS access, and paperwork, it wasn’t worth the distraction without doing real transaction volume.

I now work with an agent who charges me 1%, and that’s been far more efficient. I stay focused on investing and operations, they handle the admin and execution.

Unless you want to be in the brokerage business or are doing a lot of buy sell volume, it’s hard to justify keeping the license.

Jacob Thorpe · Answer

Working industry side changes things vs being an active investor.  I can maybe help with a short history lesson.  In 1849 there was a phenomenon in California known as the "gold rush". Thousands of people left home in search for gold, many wound up broke.  The guy who made the most money, California's first millionaire,  was selling shovels.

To get the license or no?

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