I've decided I need to be a licensed Real Estate Agent
Investor · Tampa, FL · Member since 2014 · 6 posts · 4 votes
I've decided I need to be a licensed Real Estate Agent
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesthat's a good question Joe... and one that I can answer I think !... Its regionalized in areas were if your goal is to buy SFR's and there are plethora's of them then probably not that important as agents will bring them to you and you will always have deals to bid on.
But if your in Very tight inventory markets were wholesaling is not nearly as prevalent as other areas. Then Access to the MLS is the key to being successful... The hot sheet comes out at 3am.. you need to be reading it by 5 am so you can make offers by 8am... your agent has not had their coffee or put on their makeup by then and your out of luck.
Plus in higher value markets being an agent is as profitable if not more than being a wholesaler and you LEGALLY need none of your own money when you sell a property to someone else.. Especially in states that are cracking down on non vested sellers, like Ohio an Florida.
As an agent you build a business that you can do for a lifetime.. Show me many flippers or rehabbers that have been in the business 15 to 40 years like many many RE brokers myself included..
But that all said just because you have a license does not mean your going to make a bunch of money selling RE.. its like anything else 20% of the agents make 80% of the commissions.. So you take my market here in PDX those 20% make 250 to a million or more a year all without having to ever buy one piece of property... I have had years were I made over 300k just on referrals and other deals that came to me and I was not even activiely in the business but I could take a commission because I keep my license up and current.. NOw I have to take my CE for California this month ..
30 Replies
- Richmond, VA · Member since 2013 · 293 posts · 96 votes11y
You're welcome @Barbara Brown
I would suggest listening to a podcast called "The Real Estate Guys Radio" and get a feel for their opinions about team building and leveraging others. They come off a little "pitchy" at first, but there's tons of good info to be mined from their conversations. The primary host used to be a licensed agent and broker and decided to let his license lapse in favor of organizing syndication deals and adding good Realtors to his team. That took the hunting and most of the negotiation off his plate and he was able to focus on what he liked best, the deal making and fund-raising.
- Munhall, PA · Member since 2013 · 68 posts · 20 votes11y
I saw you mentioned you wanted to consider wholesaling. I just acquired my RE license a few weeks ago with the the same thing in mind... be and Realtor AND wholesale, but this was before I spoke with a lawyer. Turns out, at least in PA, that building a business around wholesaling is technically illegal since its pretty much acting as a real estate agent without a broker OR a license. You're marketing properties you have no intention of buying; merely having the seller sign an options contract or a purchase agreement that you sell to an investor. If you get caught doing this or making a mistake you might be looking at fines or even jail time in a worse case scenario. I'm not an attorney, so I'd suggest before you get too heavily involved in wholesaling (especially once you get your RE license) contact a real estate attorney (emphasis on a REAL ESTATE attorney, not just any attorney), set up a free consultation, and let them brief you on the license laws of your state.
- 11yJamane Y.Pro MemberGreensboro, NC · Member since 2013 · 169 posts · 29 votes
@Barbara Brown I too have decided to get my real estate license. Actually I just started class this month. I'm going to a community college, which was a lot cheaper than the proprietary schools. I found that other agents did not want to work with an investor and there are too many unanswered questions about dealing with real estate. And then there's the MLS thing. I found getting access to the MLS has not been easy. So I'm willing to go to school and learn more especially about real estate law in North Carolina. There's a thin line and the real estate laws are changing. I see this as a positive things. Good luck.
- Real Estate Investor · Chicago, IL · Member since 2014 · 33 posts · 58 votes11y
The pros and cons of licensing have been discussed, but some of the practical details haven't been addressed. In most states, agents cannot operate independent of a broker. A newly licensed agent will cost their broker time, money, and resources. Agents are an expense, so brokers are paid on every transaction that their agents do (technically it's their money and they're paying you). If you are not bringing in business, they will most likely charge you a monthly fee to cover their overhead. If all you want to do is keep your license active, there are brokerage companies that will let you operate under them with minimal supervision and fees.
States require a pre-licensing course, which is offered at community colleges, private RE schools, brokerage firms, and local Realtor chapters. The class is focused on teaching RE law, general principles, and passing the state exam. You will NOT learn how to build a RE business, investing, or real world skills like using the MLS. If you want to be an active agent, taking the class at a brokerage house is a good choice because you'll start developing the relationships you'll need to succeed and they will invest the time to teach you the business. If you're only going to buy and sell on your own account, the local Realtor association is a good place to take the class, since you will need more training which will likely come from them if you don't have a close relationship with a broker.
Real estate agent and Realtor are not synonymous The latter denotes members of the trade association, and not all licensees choose to join. There are dues, but membership is necessary in order to have access to the MLS. There will also be fees associated with maintaining Supra lockbox access. The total cost varies, but it'll probably be in the neighborhood of ~$1000/ yr.
Real estate agents are held to a higher standard of conduct than nonprofessionals. In addition to disclosures, there are regulations they have to abide by and restrictions on their activities that others aren't subject to. Additional scrutiny is unavoidable because of the ability for anyone (even anonymously) to lodge a complaint with the state's regulating department, and the allegation will be investigated. Licensed individuals are subject to administrative, civil and criminal sanctions.
Only you can decide what's right for your business, I'm just adding more food for thought.
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