Hi,
As I have been going through different Investing books/materials I have heard mixed reports on becoming a licensed realtor. What are the basic pro’s and con’s of doing this?
Pros: access to MLS.
Cons: it’s a job, a boss telling you what to do, sales meetings, ties.
One negative can be that if you are a licensed real estate salesperson you must disclose that fact to every seller or buyer. Being a real estate licensee implies that you have superior knowledge about the real estate market. This can be viewed as having an unfair advantage in a purchase or sale. You must disclose the fact in writing. (This used to be the law in California–check in your state).
If you are a Realtor, you belong to the Board of Realtors and subscribe to their Code of Ethics.
Usually there is NOT a boss telling you what to do. In fact you are very much on your own. That is why so many new licensees fail. You work under a Broker’s license. The Broker or office manager is charged with supervising. But you don’t need to show up 9-5 or do certain tasks. You are an usually independent contractor working for yourself, and therefore there is no paycheck.
You are paid a portion of the commission only upon the closing of a deal. This can take months.
The advantage is that you WILL learn about good deals before the general public. You will become an expert in local real estate if you get out there and hustle.
Furnishedowner
cons.
monthly and annual expenses for MLS and training
cost of licensing
driving people around consumes time and money
Why not find a broker that is “investor friendly” and will not have much of a requirement for you to bring in business. You’ll pay them for a seat and give them part of any commissions you make, but at least you won’t have to act like a Realtor.
Hi. I am a licensed Realtor who works for a Broker who has made the office completely virtual. That means no desk time and I work from home. I get to work with whom I choose and when I want. This works out well for me, as I have another full time job with fixed hours.
The pros are simple: you have immediate access to properties on the MLS and you earn a commission on every property you buy or sell for yourself or others. If you are dealing in R.E. anyway, why not make extra $ doing so?
The cons are the yearly fees to maintain the mls, the electronic key or the mls. But you can get that back from just doing one house.
I got my license so I could do my own deals. I have represented buyers and sellers as well, making extra $ along the way. If you don’t want to rep anyone but yourself, just find a Broker who is “ok” with that.
I am new to real estate investing and am also considering obtaining my real estate license. I have talked with professionals who are both realtors and investors and they have pointed out all the pros and cons. The information that is consistent on both sides is that finding an investor friendly broker is the key. I have actually found a broker in Maryland who is very investor friendly. I think that’s the route that I will take. Besides, having the license affords me the opportunity to have access to good deals and to make extra income by assisting a buyer or seller when I can.
I’m a top producing Realtor for the #1 company in my region. I wouldn’t be able to invest in properties if I wasn’t an agent. I learned the market and I made enough money to buy some properties.
monthly and annual expenses for MLS and training
cost of licensing
It isn’t too bad. see my info below.
driving people around consumes time and money
it does, but you also get to know the market. In addition, you can make a good living if you are successful and work hard. Not recommended if you are doing it part time.
Pros: access to MLS.
Worth every penny.
Cons: it’s a job, a boss telling you what to do, sales meetings, ties
Not true. My broker manager gives me advice, but I can do whatever I want as long as I’m not breaking the law or hurting the company. I haven’t worn a tie since my wedding a few years ago.
One negative can be that if you are a licensed real estate salesperson you must disclose that fact to every seller or buyer. Being a real estate licensee implies that you have superior knowledge about the real estate market. This can be viewed as having an unfair advantage in a purchase or sale. You must disclose the fact in writing. (This used to be the law in California–check in your state).
I have to write it into my sales contracts, but I don’t think that the sellers mind. They are mostly interested in getting their property sold, regardless of who is buying it. Disclosing to buyers is different. It is a little too close to home if I represent a buyer who is purchasing a home that I personally own. That happened before and I referred the buyer to another agent and got a cut of her commission as well as the listing side.
If you are a Realtor, you belong to the Board of Realtors and subscribe to their Code of Ethics.
Nothing wrong with being ethical.
Usually there is NOT a boss telling you what to do. In fact you are very much on your own. That is why so many new licensees fail. You work under a Broker’s license. The Broker or office manager is charged with supervising. But you don’t need to show up 9-5 or do certain tasks. You are an usually independent contractor working for yourself, and therefore there is no paycheck.
True.
[i]You are paid a portion of the commission only upon the closing of a deal. This can take months.
The advantage is that you WILL learn about good deals before the general public. You will become an expert in local real estate if you get out there and hustle.[/i]
True true.
One con is the fees. My office doesn’t have a “Desk fee” but there is still the MLS fee, the Realtor’s fees, MLS keypad fee, and a number of other misc fees. I sum that up as about 2-3k per year. Still not too bad considering.
One thing I learned when I started out, Maybe 5% of the realtors out there know what real estate investing is. Most are just agents for end users on both buying and selling.
Brokers know prices, but know CRAP as well… They have better access to see how long a home sites on market for sale or rental (if listed on MLS)
Easier to network and build a buyers/sellers list with other agents…
Go for the license. If anything you can use your commission as a downpayment (I hope you can still with new lending laws)
A lot of nice and useful discussions. Though already discussed every points of being licensed realtors. My personal opinion is be a broker first.
In PA, you can’t just “be a broker first.” To be a broker, you need to have 3 years experience as a sales associate, 240 hours of education, and pass a test.
First you need to be an agent. Then a broker.
Also, being a broker and running your own real estate outfit is a TON of work… You can be a broker and make a larger cut with some companies, but most people stay as agents because that’s what they want to do.
If you are a full time investor, then being an agent is sufficient.