Should I get my real estate license

Question

Antoine Martel · Answer

I agree with @John Pate. It depends on what you want to do and how you see yourself making income over the next few years. Do you want to be an agent or an investor. They're both very different. While sure you can co-mingle them, it is difficult. Do you currently have a full time job? Do you need extra income right now?

John Pate · Answer

I think your decision should be based at large part on what type of real estate investing you want to do. If you are buy and hold, and only will purchase a couple of homes a year, probably not. There is a cost in time and $ to obtain and hold a real estate license, get MLS, and keep up with training.

On the other hand flipping means a lot of transactions. And, each one means you will save on the purchase and sale. Finding deals should be somewhat easier in both cases since you have access to all the information. At least in Texas, you will have to identify yourself as a realtor and that should also be considered.

Matt Shields · Answer

I think most of the upside is covered here, so as an associate broker I'll give you some downsides (At least in here in AZ).

You may not save as much on commissions as you expect. Dual agency (representing both buyer and seller) is illegal in many States, and I don't know any that allow dual agency when the agent is also the owner, and even if you could the liability would be very high. You will have to offer a selling broker/agent a commission, so now your 6% savings is down to 3%. You can pay less, but agents boycotting you is another story.

Subtract from that 3% the costs of training, brokerage fees, E&O insurance, licensing fees, National and State association fees, and required continuing education.

You are held to a higher standard. If you ever end up in court, it is assumed that you are more knowledgeable than other people, and will be held to a higher standard. A judge/jury may believe that you took advantage of someone with your licensing.

It is illegal to pay anyone except a broker a commission or fee. This prohibits paying unlicensed bird dogs/wholesalers to bring you deals.

Many owners do not like, trust, or want to deal with agents. You must disclose that you are an agent in all offers and advertising.

Real estate investors and agents are very different things. It may surprise you that most agents do not invest in real estate. If you want to be an agent, then, of course, get the license. If you want to be an investor, I would recommend finding an agent experienced with investing. You will learn a lot working with a good agent, not one wanting to slam you into a property just to collect a check. When you become successful and are doing many deals a year, it may make economic sense to get a license, although many successful investors are not licensed, and many who were have relinquished them.

Good luck.

Wesley Robirds · Answer

thank you everyone for your feed back I greatly appreciate the advice

David Nisbett · Answer

For me, it varies on a case-by-case basis. Certain people will be able to justify the time and cost associated with obtaining a license by continuing their education and expanding on their existing knowledge of the subject. There is also an element of control to it, if your strategy is to acquire / sell a higher turnover of properties per year, then you can take full ownership of the process, you won't be relying on somebody to do certain tasks and you can save money if your activity in the market offsets your initial, and continuing, investment into becoming licensed.

However, there is the alternative view that your time and money is put to better use focusing on other factors. If you aren't particularly active, it makes no sense to devote time and money to something which could be utilized elsewhere more efficiently. The majority of agents are worth their commission, they can add great value to the process and if you continue to develop on the agent / investor relationship, they will bring you deals.

Timothy Tooker · Answer

@Wesley Robirds,

No Matter what type of investing you are doing, you absolutely should get your license. Especially starting out, you can make a ton of income that you can use to fund your investments.

You only have to sell or buy one house a year to see that the savings covers the cost of having the license.. Everything after that is profit.

Becca Summers · Answer

No getting your lisence won't teach you to be a better investor or how to run your numbers. The only two benefits are access to the MLS and getting commission if you buy off the MLS. However you might lose out on better deals because agents will no longer bring you deals.

Should I get my real estate license

Most Popular Reply