Hi folks, i just signed up and really excited to join the community! Would love to get your thoughts whether it's worth it to get a real estate license and represent yourself when buying properties? The idea is to save on commission of course, and also get access to the MLS first hand. Any advice?
Remember you have to pay to be with most if not all MLS associations... you're paying to breathe being a licensed agent. In my opinion it won't hurt as you'll gain valuable experience in multiple arenas however it's not a necessity. You can show up with a PQ in hand and that's maybe a plus to a seller where you they aren't paying a commission to anyone. It's all about the story, the presentation and level of preparedness to make a deal.
Getting your license is inexpensive and gives you the opportunity to educate yourself on state and national legal structuring around real estate to give you the framework to build off of and is worth it, in my opinion, just for that. For using a license to save on commissions it does mean you will need to spend the time and money marketing the property and negotiating on your own behalf instead of leveraging a broker's time, efforts, network and skill to do it for you. I think it's relative to your specific goals and access to time and money if you should use your license to organize your own transactions.
Great question! Wondering the same.
How difficult, costly and long does it take to become an agent?
I did ultimately get my license but I debated it for 2 years. The classes required to become an agent are not expensive and will give you a good understanding of the laws associated with real estate. Once you become an agent you are then subject to the ethical considerations of the profession. IE you can not deliberately underestimate the value of a property to obtain a great purchase price. Over the years I listed properties that sellers accepted purchase offers that as an investor I would have seen as a great deal, but I was unable to make those offers due fiduciary responsibility to my client. On balance being an agent has benefited my investment business. I work for a broker that allow me to sell my own properties for free. This has given me an opportunity to sell and use 1031 exchanges without the concern of the cost of a listing commission.
Well, I'm on this trajectory but I can say no, it's not needed. Most RE license classes only dealing with the legality of stuff but wouldn't train you to become a better investor. If you want to become a better investor the best approach is sitting and networking with many more senior/experienced investors. Forget books.
In RE agent class they don't teach you much about IRR or MOIC for example.
@Natalia Perlova Only if you want to be a real estate agent as a profession. You need to make 2-4 commissioned sales/yr to break even with the costs of being an agent. MLS dues, broker dues, desk fees, continuing education classes, software and subscriptions. Additionally things like gas for showings, lunches with clients and above all your time. If you do it just have a plan and a budget and expect to be in the red for 6 months to a year.
Remember that when you're buying, you're not paying for commissions so working with an agent at first is not a bad thing. But if you do get the license, you will make the commission when you buy which can be used for part of the down payment. Interview a bunch of brokers and find one that won't charge you just to hang your license, if you're not going to be working with other people. After purchasing 21 units I became an agent to work exclusively with investors and on my own portfolio. I don't really do the retail thing, emotional buyers would drive me nuts. I work with a broker who owns a property management company as well, who has managed my portfolio for over 3 years prior to me joining the brokerage, so I am definitely in the right place.
It absolutely doesn't hurt. That's why I originally got mine. You'll learn a lot and can use it to help raise capital. Talk to a local broker and get some information. You're going to have realtor fees associated with your local NAR. So just be wary of those.
I would say it totally depends on the numbers. I just got my license, and I did it in about 5 weeks total (3-5 hours a day). I'm working as an agent though. The MLS dues can be very expensive ($2000+ a year), however if you're buying multiple properties a year, then it definitely is worth it. If you're buying 1 property a year, then you'd need to run the numbers. Access to the MLS is also useful, but not as much as you'd think. At least here in Utah, the public has access to the same listings, just not as many information or tools.
@Natalia Perlova as an investor and agent (investor first) I can say it's not needed. If your plan is to buy and hold and not pursue some form of real estate as your primary job (Property manager, appraiser, realtor ect) then just hire a good investor friendly agent. As you may know, the buying broker does not get paid by you the buyer but rather the seller, so it's 'free' to hire an agent to represent you when buying property. If you plan on flipping property or looking to make RE a full time thing, I would lean towards getting it.
As others have said, it costs a few thousand a year so you should be somewhat active either selling your own property or representing others to justify the fees. Keep in mind that once you are an agent you are bound by certain ethics when going under contract ect. For example, wholesaling while legal in many states is one of those 'grey' areas that as a realtor I probably wouldn't do. Buying property off market... are you going to loop your broker in on that or not tell them? Also keep in mind, that yes you will save money selling your own properties but your broker will still have you 'split' a certain % with them.
For example, you sell your house for $300k. Typically you would spend roughly 5% in listing fees... say $15,000. Of the $15,000 1/2 goes to the buyer broker. So essentially you would be saving yourself $7,500 dollars... not bad. However, after your split with the broker... this could be anywhere from 50/50 split to 90/10 split your $7,500 can quickly dwindle down. Then of course there is taxes you have to account for. My point being, if you choose to go the Re license route, be sure you are doing enough transactions to cover the yearly fees and shop around with different brokers.
I have had my real estate license in NY, NC and FL. only to buy property and save the commission which was 80% of what they took Eg 7% overall commission 3.5% to selling agency they gave me 90% of that 3.5% because I bought the property
Never paid mls fees. Never paid any fees never sat a desk Never listed nor sold property
Simply contacted a small real estate companies asked if I pay for the course can I access the MLS and buy my investments through you?
It worked very well
I do have access to 6 MLS access too without having a Realtor license. Regarding commission, I simply ask the seller agent to be dual agent and split their buyer agent fee to me.
Hi - I'm a realtor and would recommend teaming up with an agent that you work well with to provide a benefit to you both. It can be costly becoming an agent and you have to keep up with continuing education so although you may save some money, it is a job that you must continue to pay dues and maintain. If you have an agent working with you on your investment properties, you can determine a set commission that would give you balance and a team dynamic.
@Natalia Perlova short answer no, EVERYONE has access to all deals listed,, Also the good deals are not listed. I have done about 500, yes 500 flips and used a realtor 10 years ago for about 10 of them.
I am a licensed Realtor in NM and to be honest, if you have no desire to drive people around showing houses, then I'd steer clear of getting your license to be an investor. Getting a Real Estate license can be good if you want to supplement your income with the occassional sales commission for listing or selling property. It is a full time gig and requires a lot of work. It's not worth it if you're not going to make a business out of your Realtor (r) status. There are pros and cons either way, you need to know what you need the license for.