Is It Necessary To Get A Real Estate License As An Investor?

As an investor is it necessary to get a real estate license. May you please advise the pros and cons? Thanks!

Hello,

I started off investing without a real estate license. However, about 3 years into real estate investing I decided to get my real estate license and I am really glad that I did.

One great advantage of having your license is having access to the MLS (Multiple Listing Services). This allows you to have access to all the solds and actives homes in your market and it is instrumental in helping you figure out the after repair value of a home you may buy. Estimating resale value is critical in our business so that alone is a great reason to get your license.

Also, by having MLS access, I am able to have it automatically email new homes that come on the market that are likely to be motivated sellers (i.e. “as-is”, “will not qualify for FHA”, “failed septic”, etc. When I get these emails I jump on them. Its a numbers game but I bought many homes this way over the years. There are other benefits, but I will stop here because this is more than enough to help you decide to get your license.

I am not sure of really any “cons” of having your license. Maybe at times a seller may think you want to list their home for them but I quickly get them off that thinking when I tell them I buy homes with cash. If you have a license then you have to abide by certain rules but honestly thats a good thing. You want to treat people honestly and fairly.

So I would say don’t delay, get your license!

Marcello Trolio
Custom Realty Solutions, LLC

This is a very common question, and I always see answers both for and against getting your license.

Is it “necessary”? No, not in the strictest sense, but most investors who have a license will tell you that it’s been well worth it to them.

I started without my license, but have since got my license for all the reasons people say - education, commissions, access to MLS, etc.

I’ve heard investors say that’s it’s not a good idea to get your RE license because you will then be held to a higher standard if legal issues arise. I don’t agree with this. It’s like saying if I don’t have my license, then I can act less ethically. Real estate investors should act ethically and deal fairly with people, whether licensed or not.

I think having a license makes you more of a RE Professional.

If you are licensed, make sure you disclose that to the seller. Also, follow your state’s disclosure rules. If in doubt, disclose… disclose…disclose.

Solution Home Buyers

Who says, ‘act less ethically?’ That’s NOT the reason to avoid the expense, hassle and interference of getting one’s license.

The fact is, the only reason to have a license is that it gives you more credibility among OTHER licensees, not because there’s any advantage to dealing with the public. In fact, having a license is the same as advertising that you’re a likely incompetent, lazy boob, who is probably a crook at the same time. The latter being the reason that the public doesn’t like dealing with agents as principals.

That’s also why the state requires that agents disclose to the public that they are licensed (and ostensibly represent a financial threat to the public, because of the training and skills that make it possible to take advantage of the unsophisticated …and more directly, screw them out of their equity, if, and whenever possible.

Otherwise, you tell me what is the purpose of informing the public that you’re an agent? It’s to warn the public that you’re probably a crook.

Meantime, private investors can actually make more money faster, more creatively, negotiate more profitably and freely, and do it without having to watch their back …from those who would ‘report’ them to some entity if they got their panties in a wad.

Never mind most of the reporting done is by fellow agents on OTHER agents.

So, if you want to be automatically considered a con-man, pay out several hundred a month maintaining a license, and subject to ‘reporting’ and interference by disgruntled, dishonest, jealous, competitive ‘colleagues’ …go for it.

I’ve lost count of the number of ‘agents’ that thought I was an agent and threatened to report me to the state, because they assumed I was either brokering without a license; or failing to notify the public that I was an agent; and/or stealing their customers.

*** Just for giggles, and the record, if agents were actually doing what they promised their clients, I would have zero chance of ‘stealing their customers.’

Of course, I’m not stealing squat. I just offer faster, cheaper escrows with a higher equity quote, and do it without the agent-hassle. And why I can do all that more cheaply, and more efficiently, is the exact reason why I am not a licensee.

You do not need a real estate license to invest in real estate.

But Here Are The Pros of Getting Real Estate License:

-You get access to the MLS to search for properties, research market statistics and pull sold comps of recently sold homes
-You earn a commission when you buy your property by representing yourself as a buyer’s agent
-You save money on the commission when you go to sell the property by listing it yourself
-You control the deal
-The networking and relationships

I got mine, it certainly helps me monetize all my leads.

I have been investing for 10 years and feel like its not a need to have a real estate license. If you find the right real estate agent they can get you everything you need from the local MLS.
I went through several agents before i found a agent that really understands real estate investing. She is awesome and we have made each other load of money because we both understand what the other needs and how to work together.

Bret Arrington

This is a really interesting perspective indeed. I was going to list a few cons but I liked how you highlighted the pros.

I agree with not needing a real estate license to invest.

However, I think the pro outweigh the cons:

1. You have an edge with access to data at the click of a button.
2. When you sell you can save the RE commission.
3. Chance to make additional $$ on the side when a friend or family wants to buy or sell.

If I had limited funds I would say its fine to hold off, but for ROI on investment it’s still a great idea to have.