Getting real estate license

[Gregg975]

I know this has topic has been covered in the forum, but I am looking at it from a bit of a  different angle.

Ive flipped a couple of houses  without a real estate license over the past year or so.   I am starting to think that getting a license now makes a lot of sense.  For the obvious reason, I would get to keep the sales commission, but more than that Id be able to view a lot of listed fix up houses in person without having a buyers agent present. 

I am signing up online to get my license with Hogan school of real estate today, but wanted to see if other investors have got their licenses, largely because of the convenient access to listed houses.

[Realestateconnex]

I've been a realtor for over 10 years, just put my license in escrow due to the current market conditions.  Somehow, in my opinion, the commission does not balance out the fees without you being an investor and making the profit there.  Having access to the MLS is the only value.

[reiauctions]

I'm also a realtor/investor and the MLS is the most valuable, but I also agree it's very convienient to get access to properties for viewing.

[Roger J]

To get the MLS, you have to become a Realtor, not just a RE agent.  If that is all that you want out of your license, then it's not worth the time, trouble, expense, and legal issues that you get for it.  Use an agent, don't become one.

Getting to "keep" the commission isn't worth it, either.  As a new agent, you'll be lucky to come out with 1% of the commission in your pocket.  Since you won't be buying/selling alot (compared to others) if you're only doing your own, it will be harder for you to increase your cut of the commission split.  Not to mention that more and more lenders/REOs are making a stipulation that if the buyer IS the agent, then no commission will be paid.  Now, if you're not going to get paid a commission AND you usually have to be working for a company that WANTS a commission, then it's probable that it's going to COST you money (ie the company's portion of the commission) by being an agent.

I'd strongly recommend that you review/learn exactly what it takes both in money and in time to become/maintain your RE license before you start anything.

Raj

[Gregg975]

Thank you for the input.

In Tucson (and maybe its the same everywhere),  everyone has access to the listings on MLS, but realtors get a lot more information on MLS as far as comparables and local market information goes.

Until recently, I had been content without the license, because I was generating leads through direct mail and signs.  Now,  about 95% of the calls that I get are people without any equity.  I have completed a short sale before, but would prefer to concentrate on buying and selling minor rehab houses with equity.

I think obtaining a license might give me a better chance to look at more properties without the hassle of having an agent present. 

So, just talking out loud, I am weighing the benefits of... 

easy access to MLS properties, added commission to my profit on the flip
                     VS.
expenses:  price of real estate school and fees and time (~$800,  90 hours),  added legal issues, and in some cases distrust from sellers

I think Ill sleep on it this weekend, because I think its  a pretty important decision.

Gregg

[IowaRE]

Thank you for the input.

In Tucson (and maybe its the same everywhere),  everyone has access to the listings on MLS, but realtors get a lot more information on MLS as far as comparables and local market information goes.

Until recently, I had been content without the license, because I was generating leads through direct mail and signs.  Now,  about 95% of the calls that I get are people without any equity.  I have completed a short sale before, but would prefer to concentrate on buying and selling minor rehab houses with equity.

I think obtaining a license might give me a better chance to look at more properties without the hassle of having an agent present. 

So, just talking out loud, I am weighing the benefits of... 

easy access to MLS properties, added commission to my profit on the flip
                     VS.
expenses:  price of real estate school and fees and time (~$800,  90 hours),  added legal issues, and in some cases distrust from sellers

I think Ill sleep on it this weekend, because I think its  a pretty important decision.

Gregg

There will be other fees and time spent to be a realtor.  NAR fees, E&O insurance, broker fees(and/or a large broker commission cut), classes to keep your license(if you want to renew it), etc.   etc.

If you're still unsure after you sleep on it, I would recommend setting up some interviews with local companies.  See what their commission cuts and/or monthly fees are.  If you are only interested in selling your own properties, it may not be worth it. 

I would not get a license, if the main reason is to find buyers and look at houses on the mls.  Your best deals are probably not going to be found on the mls anyways.  I would probably use all that money and time in marketing.  It's also one more thing you must disclose when buying.    (I am currently an agent but have just begun searching for my first Investment property, so any advice of mine about investing should not be taken too seriously  :  )


P.S. If you do decide to get your license I would do your background check asap. 
 

[scostell]

I was investigating what it would cost to get and maintain a Real Estate license in NJ by talking with my cousin who is a Realtor.  With out going into a detailed breakdown, because I don't have it in front of me, it came out to be 2000 to 2400 a year.  I couldn't believe how many fees you have to pay out to various entities (Local Realtor association, national Realtor association, et...)

Just wanted to give you a ballpark, how it helps.

-Scott

[ericmedem]

In some cases having a real estate license could be helpful, in other cases it may not be the best choice.

The pros of having a real estate license:

Access to the MLS for pulling comparables-Access to the MLS will allow you to be able to pull data of recently sold homes, as well a homes that are currently on the market.

Get to keep your buyer side commissions- If you are a licensed agent and you are purchasing other listed homes then you will be able to keep the buyers side commission.  The buyers side commission will be given to your office and then split with you, or you may be able to keep 100% of it depending on you office fee schedule.

May have access to home before they hit the MLS- If you work at a larger office there is a good chance that other agents within your office will let you know about listings that they have coming up before they hit the MLS

Access to the MLS for pulling expired listings- Pulling expired listings is a great strategy for locating motivated sellers.  Expired listings are listings that have ended prior to the home getting sold.

The cons of getting your real estate license:

Sellers could think that since you’re a realtor that you must be taking advantage of them- I have run into many situations where sellers think that because I am a realtor that I am going to have an unfair advantage and somehow try to rip them off.

Buyers could think that since you’re a realtor that you must be taking advantage of them- I have had situations where buyers think that because I am a realtor that I must have an unfair advantage and will somehow pull the wool over their eyes.  Other buyers have thoughts that realtors take the good properties for themselves and then try to pass on the mediocre deals to them.

Association Dues- These fees include MLS fees, National Association of Realtors fees, State Realtor associations fees, as well as local Realtor fees which vary by location.

Realtors may not be quite as willing to help you out- If you are getting your realtor license to save on commissions then it is likely that you will want to keep the commissions on the homes that you buy.  The problem is that if you want to keep your commission then other Realtors have no reason to bring you great deals.  Even though I am a licensed Realtor, I often let other agents keep the full commission if they bring me a great deal.

Expensive office fees- Most real estate offices work on a split commission system where you keep a certain percentage of the commission and you pay the office the other part.  Splits that I have seen vary from 50/50 splits all the way to 80/20 splits where you keep 80% of the commission and pay the office 20%.  Other versions of the split system are graduated scales.  Graduated scales allow you to keep a greater percentage of your commission as you generate more sales.

The other type of office split allows you to keep 100% of your commission in exchange for paying a monthly fee.  I have seen these monthly fees start anywhere from $395 for a home office all the way up to $2000/mo for a space at the main office.

The other fees that are normally associated with doing business are your signs, closing fees (vary by area), and business cards.

More paper work to disclose everything- In many areas it may not be required by law to disclose that you are a realtor, but it is still a good idea to let either the buyer or seller know that you are a licensed Realtor.
You may not be able to keep your commission anyway-Many of the REO’s (Real Estate Owned) that are listed in my area will not pay a commission to the buyers side if the buyer is a licensed realtor.

[DavidN]

One fact that is missing here is,  NOBODY will work as hard to buy or sell your houses as YOU will. 

I also am thinking of heading down this road.

[Roger J]

NOBODY will work as hard to buy or sell your houses as YOU will.

That may be right, but truth is always stranger than fiction.  In fact, in alot of cases, SOMEONE will work as hard to buy/sell houses for you.  In other cases, SOMEONE simply knows how to do it better, faster, smarter so they simply don't have to work as hard.

IF the ONLY reason that you're wanting a license is to get your portion of the commission off of deals AND you're only going to be buying/selling your own stuff, you're wasting alot of time/money, PERIOD.

Raj

[rthomas]

Get your license. If your good at what you do, it will easily cover the small expenses. You'll get MLS access and get automatic pop ups on new MLS deals that fit your criteria...ex... $55k/sq ft, BANK OWNED, etc. You'll be able to get access into the house before most of your competition and develop valuable relationships with realtors that learn your an investor and you can close quick and don't fall out of deals. I'm an investor in Florida and have my real estate license simply for the purposes listed above. It's a no brainer.