Should I Get my RE License for my Own Personal Use?

48 Replies

As a bit of background, I live in Los Angeles, my investments consist of sfh in Ohio and one vacation rental here in California. Before I began investing, I got my CA real estate license (Its now expIred), signed on with an agency and did it for about a month before realizing that it wasn’t the aspect of real estate I was looking to do. While I don’t do much investing in California, two years ago I rehabbed my condo and traded up to a more expensive home. I would like to do this same sort of live in flip one or possibly two more times to eventually work myself into the neighborhood I really want to live in. With prices being so high in the area paying the 5-6% agent fee upon the sale is quite hefty. So here’s my questions: would it be worth it to obtain my license again for the sole purpose of buying and selling my own homes or is there enough value in an agent to pay the commission? And, if I do go the route of getting my license, how can I find a broker to support this type of arrangement?
@Jay Hinrichs I know you just recommended that another investor get his license for making offers on investments so I would love your opinion!

it really depends on your deal flow. if your going to be hitting MLS sellers with 100 offers a month then yes.

if your just looking to buy a few properties a year .. then probably not.

if your a rehabber retail flipper.. then I think for sure .. you want to control your own listings.

@Carrie Giordano I have my inactive license myself and don't know what to do with it yet, because I don't want to go into sales, I want it for myself. You probably already know, but having your license at a brokerage costs money, and one boutique place I was looking at only let you do it for yourself if you also sold other homes. So I'm right there with you at that last question...

@Carrie Giordano

I'm going to expand a little further on what @Jay Hinrichs has said - "depends on your deal flow".

I would really look into whichever states you plan on targeting. Some require you to be licensed if your transactions exceed a certain amount in an allotted time; take Wisconsin for example. As per WI Statutues 452.01(2) for the defintion of a broker and WI Statutes 452.01(2)(b) for what I'm talking about:

WI Statutues 452.01(2)

“Broker" means any person not excluded by sub. (3), who does any of the following:"

* Owners are not excluded if you check out sub. (3).


WI Statutes 452.01(2)(b)

"Is engaged wholly or in part in the business of selling or exchanging interests or estates in real estate or businesses, including businesses' goodwill, inventory, or fixtures, whether or not the business includes real property, to the extent that a pattern of sales or exchanges is established, whether or not the person owns the real estate or businesses. Five sales or exchanges in one year or 10 sales or exchanges in 5 years is presumptive evidence of a pattern of sales or exchanges."

Basically, if you're doing five plus sales/exchanges in one year or 10+ sales/exchanges in a period of five years than you are considered a broker and should be licensed in the state of Wisconsin - whether you own the prop or not. I'm not certain if other states have similiar clauses but I would defintely look into it to make sure states you want to transact business in do or do not have such a legal condition.

Overall, I would become a licensee regardless. Access to the MLS, passive opportunities to increase your network, etc. More power to ya!

Originally posted by @Julie Marquez :

@Carrie Giordano I have my inactive license myself and don't know what to do with it yet, because I don't want to go into sales, I want it for myself. You probably already know, but having your license at a brokerage costs money, and one boutique place I was looking at only let you do it for yourself if you also sold other homes. So I'm right there with you at that last question...

Julie you need to find discount brokers that only charge you per deal there are bunchs of them on the west coast.. 

the cost for a license is less than 2k a year.. if your only buying a property or two not worth having of course but if you are active and want instanct access to MLS lock box to get into your competitions home or beat other flippers to the deals its quite handy I cant for the life of me see how anyone who is doing more than 4 or so retail flips does this without a license on the west coast the money saved just on listing commish is easy 40 to 75k per year in your pocket.. but if you don't do much business then ya.. no need to have it.

Originally posted by @Khenkis K. :

@Carrie Giordano

I'm going to expand a little further on what @Jay Hinrichs has said - "depends on your deal flow".

I would really look into whichever states you plan on targeting. Some require you to be licensed if your transactions exceed a certain amount in an allotted time; take Wisconsin for example. As per WI Statutues 452.01(2) for the defintion of a broker and WI Statutes 452.01(2)(b) for what I'm talking about:

WI Statutues 452.01(2)

“Broker" means any person not excluded by sub. (3), who does any of the following:"

* Owners are not excluded if you check out sub. (3).


WI Statutes 452.01(2)(b)

"Is engaged wholly or in part in the business of selling or exchanging interests or estates in real estate or businesses, including businesses' goodwill, inventory, or fixtures, whether or not the business includes real property, to the extent that a pattern of sales or exchanges is established, whether or not the person owns the real estate or businesses. Five sales or exchanges in one year or 10 sales or exchanges in 5 years is presumptive evidence of a pattern of sales or exchanges."

Basically, if you're doing five plus sales/exchanges in one year or 10+ sales/exchanges in a period of five years than you are considered a broker and should be licensed in the state of Wisconsin - whether you own the prop or not. I'm not certain if other states have similiar clauses but I would defintely look into it to make sure states you want to transact business in do or do not have such a legal condition.

Overall, I would become a licensee regardless. Access to the MLS, passive opportunities to increase your network, etc. More power to ya!

just like those that wholesale illegally  this law is broke every which way in WI  LOL  Oregon is really cracking down on unlicensed wholesaling.. you get turned in you get a cease and desist and a fine if your not careful. 

I would love to hear from anyone in LA that  currently holds their license with a discount broker and the costs associated with it. 

@Carrie Giordano as a Real Estate Broker of 20 years, I believe it is a very bad idea to be licensed. The reasons being the moment you are a licensee you are considered an expert in the field. As a Broker, even moreso. You also are often excluded from Errors and Omissions insurance coverage on personal deals. I won't even list my own property, I have an associate list it so it gives me the maximum protection. Your duties to disclose are also much more seriously taken, although a seller ALWAYS has the obligation to disclose material defects they are aware of. Investors, wholesalers, flippers often think they can ignore all of this. I also teach Continuing Education and was a Managing Broker for almost 1200 agents. I got served the lawsuits and got all the agent questions. I've seen a lot and I can tell you that unless you are making being an agent your full time job it's extremely dangerous to do it. As far as costs, a buyer's agent is going to be paid 3% typically, closing costs are approximately 1.5-2% (in AZ) and your listing agent will make 2-3%. You can write a listing agreement that still gives you the right to sell the property yourself. This way you don't lose market time trying to get a buyer, because you are marketing through your agent and the MLS all at the same time. Being greedy is a huge mistake. A great agent on your side is a massive benefit. I've brought my investors many deals, I don't give those deals to just anyone.

I personally would never give up my license, I just got a $700 check for buying a property in an online auction. do this a few times, plus MLS access, and referrals, I dont see a downside, as far as previous comments, if you are Honest, Open, and practice above board, you dont have anything to worry about on the liability side, Im very in favor of being licensed.

Originally posted by @Heather Binder:
@Carrie Giordano as a Real Estate Broker of 20 years, I believe it is a very bad idea to be licensed. The reasons being the moment you are a licensee you are considered an expert in the field. As a Broker, even moreso. You also are often excluded from Errors and Omissions insurance coverage on personal deals. I won't even list my own property, I have an associate list it so it gives me the maximum protection. Your duties to disclose are also much more seriously taken, although a seller ALWAYS has the obligation to disclose material defects they are aware of. Investors, wholesalers, flippers often think they can ignore all of this. I also teach Continuing Education and was a Managing Broker for almost 1200 agents. I got served the lawsuits and got all the agent questions. I've seen a lot and I can tell you that unless you are making being an agent your full time job it's extremely dangerous to do it. As far as costs, a buyer's agent is going to be paid 3% typically, closing costs are approximately 1.5-2% (in AZ) and your listing agent will make 2-3%. You can write a listing agreement that still gives you the right to sell the property yourself. This way you don't lose market time trying to get a buyer, because you are marketing through your agent and the MLS all at the same time. Being greedy is a huge mistake. A great agent on your side is a massive benefit. I've brought my investors many deals, I don't give those deals to just anyone.

Heather these are great points.. and it really depends on what your trying to accomplish.. access to MLS for many flippers and having a lock box supra thingee so your not waiting on an agent to show up Is pretty valuable. I have never in 20 years or so of buying deals for my clients seen a wholesaler EVER give me a sellers disclosure EVER... LOL.

My wife list all our properties..our brokerage she works for is a boutique maybe 50 agents.  we are both brokers and could do it without being at an agency but she likes having them double check her paper work plus she has a transaction coordinator run her files.

However at least for us  listing our own projects at the volume we do which is 12 to 15 million in sales of our properties per year.. is substantial amount of money .. there is risk in real estate .. but you can check my CA brokers license 40 years Never one complaint and but I have been in a few squabbles usually over EM.. but thankfully not a material defect situation.. and I carry my own 1 mil policy that is specific to what we build to pay for attorneys.. it cost me about 35k per community I build its good for 10 years after completion.. so I don't rely on E and O.. 

WE love having MLS at our finger tips .. its a huge advantage to those that don't have it I personally think.. My wife always owned 3 C 21 offices and managed all those folks. so you and here share very similar backgrounds.. she wants nothing to do with management anymore.

Like Heather above, I no longer list or buy my own properties using my license. I hire a colleague since my e&o wont cover me if Im a principal to the transaction. I give up a few bucks for having my liability covered.

@Julie Marquez not sure about WA but in CA there are several zero cost brokers. Sure it’s no frills but there’s $0 monthly fees, and 100% splits. Just a $600 per transaction fee, which covers E&O. I have my license in CA because I buy 1 property a year. That’s about $15K in commission and it costs me roughly $1500 to keep it active and pay for MLS, Supra, NAR dues, etc
@Jay Hinrichs I am a real estate investor and I have sellers disclosures. License really tend to hold the sellers back because of certain legal rights and laws that are held to the brokers and agents. I agree that they aren’t necessarily a need. Of course putting location into the scenario.

Suggest discount broker like Redfin. They list for 1% and offer a rebate if you purchase.

Hassle free.


@Carrie Giordano I would say that it probably isn't worth the knowledge and time am experienced agent could bring to the table if you're only looking to do a couple deals. Yes, commissions are expensive, but you need to remember that you're paying for someone to do a lot of the heavy lifting by finding deals, taking care of negotiations, etc. If you consider the cost of your time as well as any fees related to getting your license it may end up being a wash. If you didn't enjoy being the agent the first time around I would totally just let an agent who does this full time take care of you. Best of luck!! I hope you get your dream house!

Yes, I wish I would have done that 20 years ago. I did it this year and it's a game changer. It's not just about the commission- the greatest benefit is being able to look at properties whenever you want and negotiate directly with the listing agent. Don't hesitate. Good luck!

@Carrie Giordano   

Having a real estate license will not make you successful as a real estate investor. 

Also, when selling your own property with your license you're really only paying (or saving) ~half the agent fee, unless you double side (which is illegal in many states, if not nation wide - an agent / broker cannot represent a principal in a transaction if they are also a principal in the same transaction).

If all you're doing is house hacking your own personal residences, there's probably very little good reason to have a license, unless you're house hacking million dollar homes.  The amount of time/money/hassle of maintaining your license really isn't the best use of time.

@Account Closed thank you for your feedback. It definitely gives me something to consider regarding the sale of my home. However, what are your thoughts on the purchase of a new home? Every home I’ve purchased, I’ve actually found on my own. So giving the agent $30k to write an offer and negotiate the deal seems excessive. 

@Blair Poelman thanks for the thoughts! In California, it is legal to double side a deal and when we sold our last place that’s exactly how it worked out for our agent. I’m sure that is more rare and I wouldn’t expect that though. She was great and did add value but not $50k worth of value. In Los Angeles, a million dollar “tear down” is not uncommon. So yes, just one side of the commission could practically buy a home in Ohio. 

Originally posted by @Corby Goade :

Yes, I wish I would have done that 20 years ago. I did it this year and it's a game changer. It's not just about the commission- the greatest benefit is being able to look at properties whenever you want and negotiate directly with the listing agent. Don't hesitate. Good luck!

Agreed - the commission is nice, but being able to make offers whenever and however you want, lock box access at any time, and negotiating directly is a benefit that cannot be quantified. 

@Carrie Giordano   Yes - Dual / limited agency is legal in several states - my comment was taking dual agency a step further.  

When a licensed agent is selling their own property, the agency laws (at least here in UT, and I believe everywhere else) prohibit that agent from representing the buyer of their property.   That buyer can be unrepresented and you can avoid paying a commission all together, but there is an inherent conflict when representing a buyer who will be negotiating directly with you to buy your property.   

@Mindy Jensen being that you wrote the book on selling your own home, I would love your thoughts on this!

this is a interesting topic that I would like to share my experience. I have been doing buy and hold type of investment since 2005. While I haven't done any deal since 2014, I thought it would have been good to get my own CA Real Estate Sales Person License so that it would be easier for me to get access the properties for a potential deal. It turned that the reality wasn't like this. In order to gain access MLS and SmartLock, I would have to be part of regional RE associated with couple of thousand annual fee, which was kind of disappointed.

I was luck that I get the license 1.5 year ago w/o spending much money ($200 for a corespondent online class for RE principle, RE practice and RE law and another $150 for license test and fee). I found a broker who doesn't charge any until I did any transaction, of course w/o MLS and smartLock access. I guess I am a bad agent since I am not interested in becoming an agent at all. Given that, however, I feel the license does give me huge benefit:

1. the study to pass the license itself fed me enormous knowledge on basic aspects of RE.  I spent 2-3 months to read these 3 books, along with questionnaire, case study, etc.  which provided a lot of aha moments in related to my RE purchase experience in past years.  

2. with the license, it helps me to stay in the game. Even though I haven't done any deal in last 5 years, w/o access MLS and smartLock, I've been paying attentions in RE market.

3. This is the most important, with the license, as part of brokerage firm, it opens my networks to various agents.  This is invaluable benefit of obtaining the license.  

So I guess I will keep renew it once the time comes.

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