3 Reasons Newbie Wholesalers Should Strongly Consider Getting a Real Estate License

by | BiggerPockets.com

Should I get my real estate license or shouldn’t I?

If you have been reading the Forums or the blog for any length of time, you know this question is often answered as either yes, you should obtain your license or no, you shouldn’t. Well, I will add my quick advice to this topic, and hopefully this will give newbie wholesalers a personal perspective on the subject. Here are a few reasons why I am a strong advocate for getting your license.

Before I begin I would like to inform my readers that it is possible to wholesale without getting your license, and I did this prior to getting my credentials. So I am not here to say that it is not possible; I just want to give you a perspective on the advantages of having a real estate license.

Here is the most important reason a newbie should receive their license: You will learn how to work your profession the correct way from the beginning. There’s nothing more difficult than to unlearn a learned behavior. This speaks to the importance of starting your career the right way.

Here are a few advantages of getting your license.

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3 Reasons Newbie Wholesalers Should Get a Real Estate License

1. Legal Guidance

What are some of the things that need to be learned, you may ask? Let’s start with how to write a contract CORRECTLY. It is really entertaining to see the mass-generated contracts that float around the investment community, used by newbies and uninformed seasoned investors. These contracts are not reviewed by an attorney, they do not have proper disclosures, and they have limited legal leverage in the court of law. Yes, this is a quick way to find yourself in front of a judge. Did you know acting in the capacity of a real estate agent without a license can result in a fine of $10,000 and a felony conviction (in Arizona at least)? Now, this is not the way to get started.


Related: An Investor Answers: “How Do I Know if Wholesaling Will Work in My Market?”

By becoming a licensed real estate agent, you will have the legal backing of Department of Real Estate when using the state authorized Contract to Purchase Real Estate. As long as you are operating in an ethical capacity, you will have your broker and the Department of Real Estate backing you.

The real estate industry can be very lucrative; however, it is easy to find yourself in litigation, especially if you are trying to wholesale properties that are listed on the MLS. I speak of this because one of the main tricks that gurus try and tell/teach newbies is to find an investor-friendly real estate agent and make tons of offers. You must remember there is a listing agent on the other end of the transaction who will cross every “T” and dot every “I” to get a deal done because this is their profession.

2. MLS Access

Deal flow is the most important aspect of wholesaling; if you do not have leads, you do not have a business. Having a license will give you exclusive access to the MLS and other real estate agents. I spoke earlier on the guru pitch to find a real estate agent to make offers. How long will a real estate agent make offers for you if you are not closing on anything? Your lead stream from the MLS will become very limited very fast. By having your license, you will be able to make as many offers as you want and work the MLS at your leisure. Another quick advantage is you can utilize the MLS to comp potential deals. I’m familiar with tools such as Redfin and Zillow to provide comps, but the most credible source of comps is through the MLS.

3. Networking & Credibility

Networking in the real estate industry is essential. What better way to build your brand and your creditability than to be affiliated with other professionals in the industry?

One of the challenges of networking is finding a broker who has a similar philosophy and mission as you. This will help you build your brand. By being affiliated with a brokerage, you will be able to network with other real estate agents who may be able to provide you with pocket listings. Many real estate agents operate strictly in the realm of traditional real estate and some may have a few rentals, but for the most part, wholesaling is not a exit strategy they consider, which will put you in a great position to find deals.


Related: Wholesaling Made Easy: The Only 2 Things You Really Need to Know to Succeed

Finally, credibility is another tool that lends itself to you. It’s a pleasure to speak to a motivated seller and inform them that you’re an agent and that you have to abide by all state regulations. Normally once they hear this, they tend to let their guard down and are more relaxed. This also gives you another approach: If the seller is not willing to sell at your wholesale price, you can inform them that you will be pleased to work to get them top dollar for the property by listing their home.

If you want, you can continue to work independently and take the high risk of possible litigation and losing money. However, if you want to set yourself apart, these 3 basic but important reasons to pursue getting your real estate license should help you make make an informed decision.

Thinking about getting your license? Have any questions?

Let me know with a comment!

About Author

Marcus Maloney

Marcus Maloney G+ is the Executive Officer of Equity Realty & Investments as well as 3rd Generation Management & Holding LLC, both are family owned and operated real estate investment firms. The firms' goal is to provide affordable solutions in real estate while providing exceptional opportunities for community redevelopment for the residents of Phoenix, Arizona and Chicago, Illinois. You can follow Marcus on Twitter


  1. Kenneth Craycraft

    Great article Marcus! I’m looking into getting my license, but wasn’t thinking about being a wholesaler. Your point that you can leverage multiple talents to create different potential income now has me thinking about using this as an option in the future. Thanks for the good info

  2. James Green

    I’ve been considering this for a few months. I have a “investor” friendly agent that I work with from time to time, that also bird dogs so he doesn’t mind making a ton of offers that don’t close. @Marcus Maloney can you get license without belonging to a brokerage?!? I haven’t asked, but I’m guessing you have to.

    Good article, and gives me some more food for thought.

  3. Lenzy Ruffin

    I was planning to search BP this week to get some insight on this very topic. I am a newbie wholesaler. Right now, I’m direct mailing absentee owners and driving for dollars to skip trace vacant property owners. I want to get back to making MLS offers. The main benefit that drives me to want a license is the ability to get into properties without having to coordinate with an agent or a contractor. That was really what derailed my first foray into making MLS offers. There are lots of REOs in my area and being able to get in and do a rough repair estimate using what J. Scott taught in his repair estimate book would be extremely useful. And for those houses with potential, I could bring in a contractor for an estimate.

    I understand all the benefits of a license beyond the physical access to properties. My question is what are the costs of a license? For example, all my marketing materials use the “I’m a private investor, not an agent…you won’t have to pay a commission or any closing costs” language. What happens if I get licensed? Obviously, I will change the language to disclose that I am an agent, but does being licensed mean I can’t execute a cash transaction the same way that I can now? It’s not that I don’t want a commission, it’s that I don’t want a commission to screw up the numbers on a deal that I would otherwise be able to make. In other words, if, as a non-agent, I can agree with a homeowner to an all-cash, no closing costs price of $60,000, would I be able to do exactly the same thing if I held a license?

    Also, what are the fees associated with holding a license? I know the amount may vary from region to region, but are there fees that must be paid after one passes the licensing exam in order to actually use the license? What obligations does an agent incur to the broker who holds their license?

    • Marcus Maloney


      Kenneth Is correct there is a cost associated with anything you plan on doing correctly and professionally. There is a cost for getting you license but the creditability and doors that are open to you will make the investment beneficial. I am not saying forego marketing but when you have an income stream you will need to persue your license to have more than one way to work a deal.

      Your lincense will not hinder you wholesaling, your wholesale fee will be your commission so its no difference.

      “Enjoying the Journey”

  4. Kenneth LeBeau


    Aside from the costs to get your license in the first place (which in my case here in Nevada were about 1K) once you have your license the overhead can be pricy depending on where you are at. MLS dues, city & state business licensing fees, and yearly realtor membership dues all add up to be a nice chunk of change.

    Once you take the state test and get your license you need to find a broker to hold your license so you can use it. All brokers are different and have different arrangements with their agents. Some of them take a percentage of what you earn off of every transaction and some of them charge a flat fee every month and let you keep all or most of what you earn. This is the arrangement that I have with my broker so if I decide not to charge someone a commission so I can sweeten the deal my broker could care less because they’re only earning a flat fee every month.

    I recommend interviewing several brokers once you get your license and pick the best one that works for you based on what you’re going to be doing. Remember when you are meeting with different brokers they are interviewing you as much as you are interviewing them.

    As a real estate investor I have learned that being a realtor is invaluable for many different reasons.

    • Lenzy Ruffin

      Thanks, Kenneth. The insight you provided is exactly what I needed to developed an informed strategy with regard to getting licensed. I won’t pursue it right now because I think my time and money is best spent maintaining my direct mail campaign, but once I snag a deal or two and the business can pay for the license, I’ll revisit the topic.

    • Carlos Rocha


      Former Chicagoan here as well. I’m completely new to the real estate industry. Basically, I’m reading all I can here at BP and learn all I can. Based on your experience with real estate and wholesaling, would you recommend to actually acquire a realtor license before getting started or would you say it’d be fine to get some wholesale deals in first before having to deal with the expense of a license? I’m looking into getting into Key Realty School but I’m in the fence on whether or not to take the step. Thanks!

      • Marcus Maloney


        Its always good to have your lincense but not mandatory if you have the time and money then I would say pursue your license, it will only help you make more money. I’m from Chicago as well and I am doing deals in Illinois and now I am working on getting my license for Illinios. I currently have my AZ license now and it has opened numerous doors for me. Just food for thought.

        “Enjoying the Journey”

  5. Marcus Hanna

    I am also planning on getting my license and investing. The points made here are correct. It will open up doors that can get you into deals quicker and not have to rely on an agent to stay on pace with you. It will also get you involved with other investors who will use you to find properties, sell their flips, etc.

    • Marcus Maloney


      It would be beneficial for you to get your license especially if you are undecided of the legal ramifications. I would most definitely take the guessing game out of the equation and just get it done.

      Thanks again for reading.

      “Enjoying the Journey”

    • Marcus Maloney


      You make some great points in your article but one thing you fail to mention is the all important work “Disclosure”, as an Agent we must disclose everything to the seller. It is good to have that transparency with the seller, you can present two possible positions versus either I buy the house or I don’t. My approach is during the inspection period if I find that we will not purchase the house the conversation goes along these lines:

      “Mr. or Mrs. Seller, because of the following reasons we regretfully decline moving forward with this transaction, however as previously stated I am a licensed Agent with numerous contacts and we can list the property for you which could possible be a better outcome for you.”

      It works and everything is disclosed up-front and the seller like have a backup plan versus a traditional wholesaler saying we offer you 50% ARV take it or leave it.

      Thanks for reading……”Enjoying the Journey”

  6. Tiara Ross

    I am a TX newbie to wholsaling. This is very helpful information. I have been on the fence about taking my exam for my real estate license. I have completed my courses. I didn’t know much about wholesale before class.My interest was sparked when i began to understand the concept. Why become an agent under a broker, whom ultimately gets a percentage of your sales. I understand the concept of wholesaling. Having a license gives you more access to MLS making the process easier but other than that what else is there.? Help me my fellow BP friends am i missing something? Where do i get the contracts to provide potential seller/buyers?

  7. Melvin LuSane

    Hi Marcus,
    I just finished reading your article which offers very good information and raises many questions for me. I am new to the business and am considering starting as a wholesaler in New Jersey. I have to consider all of the benefits of having a license versus not having one. I am considering obtaining a license in order to have access to the MLS. I plan on reading the post of Ed Garrison and see if it helps with my decision.

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