Advantages to Having a Real Estate License When Pursuing Listed Properties

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It’s no secret that there are some smokin’ deals to be had on the MLS right now in the form of short sales and REOs.    While having your real estate license is by no means a necessity if you want to score great deals off of the MLS, there are definitely some advantages to being licensed.  Following are a few of those advantages..

Having access to the MLS

I’ve been wholesaling REOs for the last two years, and I can’t imagine doing so without having access to the MLS.  Aside from being able to look up comparable sales, I can also do research to find out where the investor hot-spots are,  as well as  find out which properties have fallen in and out of contract multiple times, and which properties are due for a price reduction (I specifically target such properties).  The MLS contains a wealth of information, and is something that I rely on heavily in my day to day investing activities.

Making a Commission on Purchases

Another upside to having your license when pursuing listed properties is that in many cases you will be allowed to take a commission on the deals that you purchase.  While you may elect to give your side of the commission away to the listing agent in order to sweeten your offer, it’s always nice to have the option of making a commission on top of the profit you are making on your deal.

Access to Properties

Being licensed will also allow you quick and easy access to any listed
properties you wish to get inside of and make offers on. When great deals hit the MLS, you need to be able to get into the property and have your offer on the table ASAP. If you don’t have access to the property, many times the deal will be gone before you are able to set up an appointment with a buyer’s agent to view it.

If you are a wholesaler, having access to the properties will make it much easier for you to show deals to prospective buyers once you have something under contract.

Ability to Make Your Own Offers

Finding deals on the MLS is a numbers game. You most likely are going to have to make multiple offers before you land a deal, and many agents are less than excited about submitting lots of low-ball offers to the banks. While it is certainly possible to find an agent who is willing to submit multiple offers for you, it can be an uphill battle. Having your license will allow you to circumvent this issue, as you can simply make the offers yourself and not have to worry about irritating a buyer’s agent.

Like I mentioned previously, having your license is not a necessity if you wish to pursue listed properties, but it is something you might want to consider, as there will be far fewer hoops for you to jump through as a licensed agent.

About Author

Formerly a bartender, Steph Davis is now a full time wholesaler in Tampa, FL. If you'd like to get an idea of what it's really like out there in the trenches, head on over to her blog: FlipThisWholesaler.net!

11 Comments

  1. Hi Chris,

    I don’t have my license. I was able to get MLS access through other friends who are licensed, so I never bothered to get mine.

    I don’t know what the rules are regarding disclosing that you are licensed when you are wholesaling, but none of the wholesalers I know who are licensed (which is most of them) ever disclose it on their marketing materials. Not sure if they are breaking the rules or not..

    Steph

  2. Very nice write up. I have been on the fence on whether or not to get my Real Estate license here in California in order strengthen my wholesale assignment business. I am more leaning towards that I am going to pursue it (or have my wife get it).

    Just curious, do you need to put your DRE# on all your advertisements for properties you have under contract that you are trying to assign? I know it may be different from state, but just wondering what you have been doing. Thanks!

  3. @Steph – Access to the MLS and the ability to save (make $$) on commissions is a definite plus for having a license.

    @Chris – I know of a few people who are doing what you suggest – having a spouse get licensed so they are not bound by the restrictions that do come with a license.

  4. Great post, stephani.
    I’d add one more advantage. Education.

    Agent licensing requires education, which can be extensive in some states. What you learn in these courses can make you a better investor.

    IT has certainly made a difference in my business.

  5. Having your license does make finding deals like these a lot easier, though at the same time it is pretty easy for un-licensed people to gain access to the MLS, at least from what I have seen in the past.

    You bring up some good tips though, and there is some serious money to be made in these short sales right now. My problem is finding the time to do the research required for finding a great property. lol

  6. Three points to consider:

    1. Realtor associations do not look kindly upon members who let others access the MLS. Revocation of membership is a possible sanction.

    2. State legislatures pass rules and regulations that licensees must follow or face civil and even criminal penalties.

    3. Cavalier, reckless conduct in the course of a transaction can not only get licensees in hot water with the Realtor association and the state, but also place them at the wrong end of a suit for damages.

    Imagine turning all of your profits — and then some — over to your defense attorney.

    Larry Lowenthal
    Expert Witness, Realtor Ethics.

  7. Good points Larry.

    Precisely why I decided not to get my license- too many rules and regulations.

    Not sure what you are referring to as being cavalier, reckless conduct, though…

    Take care,
    Steph
    Non-licensed REO Wholesaler Extraordinaire

  8. Stephani,

    here’s how “cavalier, reckless conduct” can come about. An investor obtains a license solely to earn commissions on his/her own transactions. It’s very easy for that person to think, “Rules? Ethics? I’m an investor, not a Realtor — I don’t need any stinking rules or ethics!”

    And then, one day a year or two later, I get a call from the plaintiff’s attorney.

    Got it?

  9. Actually, no, I don’t.

    Many of the full time investors I work with also have their re licenses…

    Not sure why you would assume that being an investor who is also a licensed agent would lead to conducting business in a cavalier or reckless manner…

    I don’t see the correlation, Larry.

    But then again, I’m not an Expert Witness on Realtor Ethics, so what do I know?

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