Do I need to get a real estate license?

Question

I'm interested in picking up properties through auctions and tax lien and tax deed sales, and possibly some preforeclosures, foreclosures or sale by owner deals.  What do I need to consider to decide whether to first take classes and a test to become a broker?  Upside?  Downside?
Thanks for your insights.
Ru Monsell

Paul Timmins · Answer

Ru

You can take the classes for knowledge but not become licensed.

You have to disclose in a deal if you are an agent. Other brokers will worry you will want a piece of the commission.

Paul

Ru Monsell · Answer

Thanks for those replies, everyone.  All the different perspectives and the rationale behind them is really helping.
Ru

Bryan L. · Answer

I have my Realtor's license (and engineering license too, but have it "inactive").  My opinion - if you're going to be buying a lot of MLS-listed properties, being a Realtor is very valuable.  Not only for the MLS access, but also for the access/networking with other Realtors.  And, if you don't want to do Realtor work, you can refer those leads to a Realtor and earn a referral commission.  I recently did that and made a nice little check from a lead where there wasn't enough equity to make an investing deal.  Easy money.

Ned Carey · Answer

Ru Monsell, I see you are relatively new here so If I haven't said so already - welcome to BP

You will get a lot of opinions on this and there is no one right answer. A search will probably bring up a lot of  other threads about this.

First the classes will tell you nothing about how to buy and sell real estate or how to be a good agent. The classes are all about the laws. I found this valuable information. It will give you a good foundation in RE law. If you want to know the law, it is worth taking them even if you choose not to be an agent.

I was an agent and gave up my license. It can be expensive to be an agent and my partner is one so there was no sense in us both being one.  The biggest benefit to being an agent is access to the MLS.  This is the best way to get good information on comparables. However I am now an assistant to my business partner and I still have MLS access.

I did do my most profitable deals before I had MLS access so it is not absolutely necessary.  I also rarely buy off the MLS so that is not much a concern of mine. It might be for you.

The last thing I want to do is a lot of paperwork to earn a commission. The idea of I might make a few commissions on the side has absolutely no appeal to me. If fact I look at it as a poor use of my time.

Bottom line is my decision is I do not want to be an agent. The doesn't mean that is the right decision for you.

Good luck - Ned

Ru Monsell · Answer

Thank you, Karen.  I don't think it's required of me in Maine, but just am getting the feeling that I'll better know what I'm doing if I get the training!
Ru

Karen Margrave · Answer

Ru Monsell First off, each state has their own criteria for when they require someone to be licensed, so check with your states Dept. of Real Estate. As to whether or not it's worth it, only you can decide. Having a license means you have a higher liability when dealing with sellers, and to join the Board of Realtors, MLS, etc. there are fees.

At the same time, getting the commissions off of deals helps out a lot too. I am licensed in real estate and general contracting. I only use my license in buying/selling for our company related projects (except in rare instances when someone I know is looking for property, or wants to sell) All of our projects are done under my General Contractor's license, but I don't work on jobs - though I do go out to jobs regularly, and am involved in all aspects of the project.

So... there's my two cents. I will say, I have never regretted being licensed!