Orlando, FL · Member since 2009 · 2k+ posts · 282 votes
I was thinking about getting my RE license just so that I could obtain MLS access and have an advantage over other buyers, but there were a few things I was wondering about:
1) Is there a long lag time from the time you pass the test to when you actually receive your license (and are able to purchase an MLS subscription)?
2) I know that when you work under a broker you need to pay the broker a yearly(?) fee. But do they also expect you to do other things such as desk duty at the office, etc.? Is it a good idea to tell them you are only doing this for MLS access, or will that make them not want to deal with you?
3) I suppose it varies by state, but what are some of the disclosures that you are required to make (as an agent) when you sell a flip?
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
14y
Getting MLS access is just one benefit of getting your license, and I would argue not the most important. I would also argue that saving 3% commission on purchases/sales is not the most important.
In my opinion, BY FAR the best reason to get your real estate license is so that you can CONTROL YOUR DEALS. How many people post here daily about the frustrations they have with their buyer's agents, the listing agents of the properties they buy, appraisers, buyer inspectors, their end-buyers and end-buyer agents, mortgage brokers, etc?
We normally don't have those issues. I'm my own buyer's agent so I always know what's going on with my offers. If a listing agent isn't doing their job, I don't have to sit around and wait -- I can call them directly, call their broker, call the real estate commission, etc. When I have a property on the market, I know when it is being shown (the agents call me directly), I can get feedback directly from the agents, and I don't have to worry about another agent saying something I don't want them to say during a negotiation. When I get a property under contract to sell, I can talk directly to the buyer's agent, I can require that they put me in touch with the appraiser, I can call the buyer's mortgage broker whenever I want, I know when the buyer's inspector is going to be going out to the property. Also, I don't have to wonder if there are emails flying around between the closing attorney, the buyer's agent, the mortgage broker, etc, without me knowing about it -- I'm looped into everything.
Yes, I'm a control freak. I couldn't imagine being successful in this business without being one...and having a real estate license gives you the power to control pretty much every aspect of your transactions.
Here are more of my thoughts on the topic (if you never read anything else I ever write, I recommend this one):
Engineer · Wichita, KS · Member since 2012 · 396 posts · 36 votes
14y
Originally posted by Brian P:
Terry
Yes you are confused. The deals I referred to the agent are deals it didn't make any sense to pursue as a investor and you should run into a ton of these, so instead of saying pass, you say commission or fee.
Thanks for the clarification, if you read through all the post on this thread there is ALOT of confusion related to the OPs question, lots of conflicting opinions, especially to newbie’s.
I'm still not sure why I need a license if for example I have properties that are not investment worthy to pass on to licensed agents. I should be able to draw up a private contract to act as an agent's agent of sorts if you will between us and collect a fee, not what's known as a MLS licensed "commission". I'd have to wonder why these agents would pay me to find properties though and should know the market as well as me an investor. That way I spend more time looking for investment properties rather than selling them for small change commissions or fees. I can see where if the purchase price is high a license and selling may exceed what I can make as an investor, but these days those are far and few between. As I said, most agents and brokers are getting hit hard by the internet, flat fee services, and market in many US areas, in areas like mine especially where median house prices are $80K in 2011.
Most of the selling agents I have worked with have set up private websites as mentioned that feed all the big private websites as the MLS does to boost their marketing and sales. Seems like MLS is just another website in the crawl no better or worse than the rest, but I have no access so I am not sure. Guess I'll go get with an agent and see all this data I am not supposed to see on private websites but as some have proven you can be a successful investor without a license. And in the mist try and sell some hand washing deals to anyone I can. :)
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
14y
Originally posted by Brian P:
JScott
One more point, with a commission it is earned and taxes due then but with a capital gain, even short term, I can move the taxable event to another period if need be.
This can even lead to a 1031 Exchange at some point, as long as you are holding the property and not just looking to quickly flip.
Engineer · Wichita, KS · Member since 2012 · 396 posts · 36 votes
14y
Ok, I get it now I called my local REC they told me if I try and sell/buy a property to anyone but myself I am in violation of state law. They told me they have nothing to do with MLS that is my local Association of Realtor's so called them and they told me my state is a non disclosure state meaning property prices are not on public record. Also, that if I get a license I have to list it with a broker that may want me to be active as an agent moreso than referring a few properties and if I am not they may restrict my access to the MLS. He told me 95% of the MLS data is out on Realtor.com and brokers sites, and I don't need a license to be sucessful in investing same response I got from an sucessful investor that teaches the license course. He said having a license can in some cases open me up to litigation not having one does not since I am a so called "expert" altho peeps with out licenses know more, go figure!
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
14y
Originally posted by Brian P:
JScott
One more point, with a commission it is earned and taxes due then but with a capital gain, even short term, I can move the taxable event to another period if need be.
Two problems:
1. If you're planning to flip the property, it doesn't matter how long you hold it, it's never going to be long term capital gains (or even short term capital gains), From the IRS perspective, it's about intent...if you intend to flip, you won't get 15% tax rate and you won't get cap gains advantages.
2. Flipping houses is a business, not an investment. You pay ordinary income (and self-employment tax) on flips, not capital gains.
I'm not an accountant, but this is how both of my tax guys understand it...
Rental Property Investor · Englewood FL & Prior Lake, MN · Member since 2012 · 107 posts · 33 votes
14y
I got my license as a buy and hold investor so I could act more quickly on deals that popped up. It makes viewing properties much easier as I can make my own appointments at my own convenience and I don't have to feel guilty about making an agent go out of their way. I don't have to worry about agents figuring out how to scan a contract and it cuts out one of the middle men in a negotiation. Previously I did have the pleasure of working with some great agents, but the training was great to have as an investor and the MLS access is helpful. In our area, full MLS access give you 1 click access to the property tax data, listing history, and all kinds of other information that can help you form a fuller view of a property before going to see it. You can see if it's a short sale, REO, or HUD home open only to owner occupants. It's certainly not free and I didn't sign up for an electronic key so I can't get into all properties, but it's been well worth it to me. A good agent can act like another member of your team, but getting my own license was good for me.
Real Estate Investor · Atlanta, GA · Member since 2009 · 339 posts · 126 votes
14y
My experience has been that the bank will pay commission to the buyers agent even if they are related or members of same company.
I also went through this debate of wether to get license or not and decided for my wife to get the license. It is invaluable to have MLS and property access. To put it simply, MLS access for an investor is like a hammer for a carpenter, a basic must have tool.
I am surprised to see that there are banks that will not pay commission.
Also as far as the costs of the license, they are pretty low if you go with the right broker. And you better shop around because there are huge differnces on the costs of being affiliated with one broker vs. another. But if you go with one of the low cost brokers then the commission you make in one deal can be enough to cover the expenses of being an agent.
Orlando, FL · Member since 2009 · 2k+ posts · 282 votes
14y
Has anyone ever had an actual problem caused by the disclosures that you have to make when you're a licensed realtor? Some people here seem to think it's not an issue but then others say not to get the license because of this issue.
FULL WRITTEN DISCLOSURE OF ANYTHING YOU ARE aware of that is wrong about the house. FULL DISCLOSURE ON listing a property you own and FULL disclosure that you are an agent in both buying and selling.
I have seen lately an occasional listing stating that if purchase is made by a licensed agent, NO commission shall be paid on the buyers side. This is if you are representing yourself in a purchase. THis is for REO listings. Banks are free to add any addenda they feel like. Read contract carefully, don't depend on listing broker.
Orlando, FL · Member since 2009 · 2k+ posts · 282 votes
14y
Originally posted by Ren Ver:
FULL WRITTEN DISCLOSURE OF ANYTHING YOU ARE aware of that is wrong about the house. FULL DISCLOSURE ON listing a property you own and FULL disclosure that you are an agent in both buying and selling.
OK thanks...does that mean you can't sell "as is" or just state you've never lived in the house?
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
14y
Originally posted by Ren Ver:
FULL WRITTEN DISCLOSURE OF ANYTHING YOU ARE aware of that is wrong about the house. FULL DISCLOSURE ON listing a property you own and FULL disclosure that you are an agent in both buying and selling.
That's the rule in my state whether you're licensed or not...
As for disclosing that you're licensed, in my experience, that's a VERY good thing -- it adds a layer of trust...
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
14y
Originally posted by Ren Ver:
FULL WRITTEN DISCLOSURE OF ANYTHING YOU ARE aware of that is wrong about the house. FULL DISCLOSURE ON listing a property you own and FULL disclosure that you are an agent in both buying and selling.
As an agent, that is probably true in most places. But as a seller, there are many situations that have been exempted from seller disclosures; REO, probate and estate sales are just a few of these exempt types of sales.
Rental Property Investor · Ft. Lauderdale, FL · Member since 2012 · 43 posts · 2 votes
14y
My understanding is that if you're a "part time" flipper and don't do it full time, there are tax advantages to NOT having your RE licenses since you're not a full time RE professional.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
14y
Originally posted by Jackie F.:
My understanding is that if you're a "part time" flipper and don't do it full time, there are tax advantages to NOT having your RE licenses since you're not a full time RE professional.
It means, no payroll or self employment tax.
If you're flipping houses, you WILL pay self-employment tax, regardless of whether you're part-time or full-time and regardless of whether you have your license. Payroll taxes are incurred if you have employees, and again, it doesn't matter if you are part-time or full-time or whether you have your license or not.
In other words, part-time vs full-time and license vs unlicensed will make no difference in your tax situation if you're flipping houses.
Orlando, FL · Member since 2009 · 2k+ posts · 282 votes
14y
So these are the benefits of getting full MLS access, as I understand it:
1) get the lockbox codes, visit houses on your own schedule
2) write your own offers
3) see whether other offers have been put in
4) see how many mortgages are on a short sale
Am I missing anything? Do people who get full MLS access actually have the properties appear in the system a day or two before it hits the general "free" MLS, or are you still competing with other buyers at the same time?
Investor · Orlando, FL · Member since 2012 · 431 posts · 106 votes
14y
Originally posted by Bienes Raices:
So these are the benefits of getting full MLS access, as I understand it:
1) get the lockbox codes, visit houses on your own schedule
2) write your own offers
3) see whether other offers have been put in
4) see how many mortgages are on a short sale
Am I missing anything? Do people who get full MLS access actually have the properties appear in the system a day or two before it hits the general "free" MLS, or are you still competing with other buyers at the same time?
The main benefit as I see it is being able to knock 3% off of a deal and credit it towards the purchase price. Reverse if you're listing your own property. It's nice to view houses on your own terms without having to deal with an agent.
You can see how many mortgages are on a short sale by using public records.
No idea on whether the MLS has a head start on the public mls - it used to but no idea if that's still the same.
It is nice to have more detailed information on the property that you don't get with the free mls listings.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
14y
Getting MLS access is just one benefit of getting your license, and I would argue not the most important. I would also argue that saving 3% commission on purchases/sales is not the most important.
In my opinion, BY FAR the best reason to get your real estate license is so that you can CONTROL YOUR DEALS. How many people post here daily about the frustrations they have with their buyer's agents, the listing agents of the properties they buy, appraisers, buyer inspectors, their end-buyers and end-buyer agents, mortgage brokers, etc?
We normally don't have those issues. I'm my own buyer's agent so I always know what's going on with my offers. If a listing agent isn't doing their job, I don't have to sit around and wait -- I can call them directly, call their broker, call the real estate commission, etc. When I have a property on the market, I know when it is being shown (the agents call me directly), I can get feedback directly from the agents, and I don't have to worry about another agent saying something I don't want them to say during a negotiation. When I get a property under contract to sell, I can talk directly to the buyer's agent, I can require that they put me in touch with the appraiser, I can call the buyer's mortgage broker whenever I want, I know when the buyer's inspector is going to be going out to the property. Also, I don't have to wonder if there are emails flying around between the closing attorney, the buyer's agent, the mortgage broker, etc, without me knowing about it -- I'm looped into everything.
Yes, I'm a control freak. I couldn't imagine being successful in this business without being one...and having a real estate license gives you the power to control pretty much every aspect of your transactions.
Here are more of my thoughts on the topic (if you never read anything else I ever write, I recommend this one):
Orlando, FL · Member since 2009 · 2k+ posts · 282 votes
14y
Originally posted by J Scott:
Getting MLS access is just one benefit of getting your license, and I would argue not the most important. I would also argue that saving 3% commission on purchases/sales is not the most important.
In my opinion, BY FAR the best reason to get your real estate license is so that you can CONTROL YOUR DEALS. How many people post here daily about the frustrations they have with their buyer's agents, the listing agents of the properties they buy, appraisers, buyer inspectors, their end-buyers and end-buyer agents, mortgage brokers, etc?
We normally don't have those issues. I'm my own buyer's agent so I always know what's going on with my offers. If a listing agent isn't doing their job, I don't have to sit around and wait -- I can call them directly, call their broker, call the real estate commission, etc. When I have a property on the market, I know when it is being shown (the agents call me directly), I can get feedback directly from the agents, and I don't have to worry about another agent saying something I don't want them to say during a negotiation. When I get a property under contract to sell, I can talk directly to the buyer's agent, I can require that they put me in touch with the appraiser, I can call the buyer's mortgage broker whenever I want, I know when the buyer's inspector is going to be going out to the property. Also, I don't have to wonder if there are emails flying around between the closing attorney, the buyer's agent, the mortgage broker, etc, without me knowing about it -- I'm looped into everything.
Yes, I'm a control freak. I couldn't imagine being successful in this business without being one...and having a real estate license gives you the power to control pretty much every aspect of your transactions.
Here are more of my thoughts on the topic (if you never read anything else I ever write, I recommend this one):
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
14y
Originally posted by Bienes Raices:
Two other questions:
1) Is there any issue in putting in an offer using an LLC, once you're an agent?
2) Does it cost extra to get an electronic key?
1. No issue whatsoever. I probably shouldn't generalize to all situations and all states, bu I can't imagine a situation (or location) where this would be an issue.
2. Probably depends on your state/MLS, but I pay about $14/month for electronic key and access using my smartphone. There was a $50 setup fee, I believe. But again, your MLS will likely dictate the cost.
Orlando, FL · Member since 2009 · 2k+ posts · 282 votes
14y
Originally posted by J Scott:
Originally posted by Bienes Raices:
Two other questions:
1) Is there any issue in putting in an offer using an LLC, once you're an agent?
2) Does it cost extra to get an electronic key?
1. No issue whatsoever. I probably shouldn't generalize to all situations and all states, bu I can't imagine a situation (or location) where this would be an issue.
2. Probably depends on your state/MLS, but I pay about $14/month for electronic key and access using my smartphone. There was a $50 setup fee, I believe. But again, your MLS will likely dictate the cost.
Thanks. One other thing: should I tell the broker(s) that I contact (to possibly work under) that I'm an investor who's not really interested in acting as a traditional realtor? Will that turn them off? Or do they only care about getting their fees?
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
14y
Originally posted by Bienes Raices:
Thanks. One other thing: should I tell the broker(s) that I contact (to possibly work under) that I'm an investor who's not really interested in acting as a traditional realtor? Will that turn them off? Or do they only care about getting their fees?
Absolutely tell the brokers you speak with what your goals/plans are. If they don't want to deal with investors, it's better to know upfront, as that situation won't be good for anyone.
Wholesaler · Salt Lake City, UT · Member since 2009 · 1k+ posts · 401 votes
14y
Good grief, if Jason were my tax advisor and legal advisor I would have far less money. So for all of you out there get a good tax advisor and a good legal advisor to use when it its important,and take the advice you get here with a large grain of salt as something to investigate and consider, not as an absolute truth. Even my advice, I might have not had my coffee or may be having a senior moment or it doesn't apply to where you are doing business.
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
14y
Brian P - please point out any bad advice and offer alternatives, so that we may all benefit from the ensuing discussion. After all, that is the main benefit of forum discussions.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
14y
Originally posted by Steve Babiak:
Brian P - please point out any bad advice and offer alternatives, so that we may all benefit from the ensuing discussion. After all, that is the main benefit of forum discussions.
Yes, I would also like to know what "bad advice" I might have given. I'm wondering if he's confusing "bad advice" with "advice he didn't want to hear"...
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
14y
Come on, Jason usually has very good advice with a big dash of opinion, but it's solid. His comments above about controlling the deal I see as arising out of how he conducts his business, not so much due to having a license, but his point about getting to the appraiser for example is certainly helped by having a license.
I'd like to see every investor have the same education as an agent, as a minimum. Why? Because you need to know at least what an agent knows to be successful......period!
My broker's license expired, I have no intentions of using it and don't need it.
There is no broker in SW Missouri I can't talk to. I can call the Board of Realtors any time. I can call the Div. of Finance or Real Estate when the office is open. I can raise cane as well as any agent or other broker, I don't need a license to do that. If my agent doesn't do what I ask, I can go to the broker (but that has never happended, just saying). I can have access to the MLS through my agent, no I don't really need to look at the agent's side, but the agent can and disclose anything I need to know.
I'm probably alot more laid back than Jason in the "control" of any deal, but then I have a pretty good idea of what to let slide and stay on top of, roll with the punches so to say. Not saying he does not, just that he may want to stay closer to or inside the deal.....personality.
In my opinion, the only advantage is the access to the MLS, the 3% and the dinners at the Board of Realtors. There is really nothing else an agent can demand or force through that I can't do. Besides, I have rarely called others to report anyone or blister some agent. Believe it or not....
The real trick is knowing what Realtors must do, can do and can't do and you don't need a license to know that....