Good morning folks how are you today? Read the posting by bpmiller about MLS list in GA. I am a newbie in CA, you think is a good idea to get the realtor license? I am aware of the benefits: mls list, doing your own offers, exclussive access to some property information. However, will the rules and regulation of that licence be a major obstacle in my investing career in the future? I am talking general all around opinion not about a specific rule or two. Thank you for your input.
Do a search. This topic has been beat to death.
In short, everybody always says that they know the “benefits” of becoming an agent, but I’ve yet to see anyone post that they’ve learned the negatives of having a license.
First, your “benefits” are hardly worth the cost of getting and maintaining a license. MLS access can be obtained without a license and without going through an agent. Nowadays, practically every agent has IDX running on their website which is merely a stripped down version of the MLS anyways. I see no benefit of presenting your own offers, but there are in fact negatives to doing so. I’m not aware of any “exclusive” property info either. If you are referring to hearing about listings before they are listed, then you either a) have to be the listing agent, or b) have to be working in the office where the listing is.
Raj
I became an agent because I wanted to invest in Real Estate. In my case it seemed to make sense. Access to the MLS is a good thing - I believe you could get access some other way. However I don’t think you would have access to expired listings, number of days the house was on the market, etc. (I am talking about authorized access - not fraudulent access, like using a friend’s password to access his account).
The other good thing about becoming an agent is that you can earn a commission for every house you buy or sell. Which is also nice.
some negatives (true if you become a Realtor) - you have to abide by the Code of Ethics, which requires you to disclose a lot of information (in some cases more than you would like to disclose). In some cases, the other party may not go through with the transaction after he/she understands what you want to do with the property. He/she may think that he/she can do the same and profit more. This is a mute point for me because I decided a long time ago to do business ethically - so disclosure is not really an issue. I believe there is an abundance of good deals out there. If a deal doesn’t close because you disclosed your intentions, you have only to move on to the next…
Some people don’t like to deal with real estate agents because they always feel they are being taken advantage of. I believe that as long as you are upfront, you can overcome most of the initial resistance.
Another point - if you chose your broker wisely you can have access to someone with years of experience who has a vested interest in your success. You can tap that experience when you need it.
In summary, I guess that each person is different - in my case it made sense. I didn’t mind having to take the course or the exam. I didn’t like to have to pay the fees. However, I should recover them in my first transaction (commissions).
I hope this helps… Have a great day!
Being a RE agent and being a RE investor are two completely different things. Compare those to a driver and a tire changer with a race crew. Just because they both involve racing (or RE) doesn’t make them interchangeable.
I’m continually amazed by how many people get a RE license or take the classes so they can “learn about RE investing.” Following the comparision, that’s like learning how to change a tire so you can “learn” how to be a racecar driver. Doesn’t make much sense.
Additionally, even if you plan on getting your RE license, I strongly recommend that you learn to be an RE investor FIRST. Your whole mindset will be different.
Now, once again. The perceived benefits of being a RE agent:
MLS access: As stated, there are other, legal ways to get MLS access if that is that important to you. However, a good RE investor will have an agent on their “team” in order to get them what they need on the MLS anyway. An agent is just a tool for good investors, and good investors know how to use them and how to conpensate them as well, which is where most fail and decide that Realtors are crap and it’s better to get your license yourself. My opinion.
You get to earn a commission on your buy/sells: First, you don’t earn as much commission as the general public thinks. After all the splits, you’ll be lucky to get 1% of the deal as commission. If 1% makes or breaks a deal, it’s not a deal anyway, and 1% isn’t enough to warrant getting a license, because unless you’re flipping alot of them, it won’t pay the fees of being a Realtor. And if you’re doing alot, you don’t really have time to be a Realtor anyway!
Second, more and more REOs are NOT paying a commission to agents that are principles in the deal. That means that your company won’t be getting their cut out of that deal either. Guess what? That means that you either have to pay it or pretty soon you’re going to have a very upset boss.
Which brings me to another point. It’s not nearly as easy to find a BIC that will hire you if you plan on doing nothing but buy/sell for yourself, especially not one that won’t charge you an arm and a leg. Heck, I AM an investor, and if you came to my firm and ask for a job, I wouldn’t hire you UNLESS you could prove to me that you are capable of buying/selling 15-20 properties a year. Otherwise, you’d be nothing but a drain on my bottom line.
Finally, being an agent/investor and it’s success greatly depends on WHAT type of investing you are planning on doing. If all you are going to do is buy foreclosures, fixup and resell, then having a license isn’t going to affect that. If, however, you plan on dealing with lease/options, shortsales, owner financing, etc., etc and dealing with homeowners directly, then having a license may not be the best deal.
Raj
Hey folks thanks alot for your input, as an aside. I love this forum cause you can ask stupid questions and nobody calls you stupid. Case in point I did not know that I had to work for a broker once I had my license,I though I’l get my license and just use it as tool to gather information not to work as a realtor. The reason I took it seriously is cause it was advise from an investor that I know. This investor did a ton of deals back in the 90’s and is dormant now waiting for prices to bottom. Because he invests only when markets are down, that gave me pause on taking his advise.
Raj - actually there are a number of brokers that will hire an agent for a monthly fee (sometimes as low as $29.00) and if you pay the fee you don’t have to split the commission. If you buy a 50k house you will get $1.500. And you will pay $29/month x 12 = $348 ← your annual fees to your broker. So even if you make only one deal you will profit $1152/year (which considering my goal of getting $100 cash flow per house/per month) would almost equate to one year of positive cash flow… :O)
And if you make more than 1 deal per year, you will be even better… :O) If you make 5 or 6 deals per year you are pretty soon looking at $8k to $10k commissions. Nice to get this money for a work that you would do anyway… :O)
I am not aware of any legal way you can have access to the MLS without being an agent, a broker, or an affiliate (appraisers, etc.). I don’t think affiliates can get full access. So the option would be to hire an agent - in this case you would have to pay him the commission. And I think it is cool to do my own searches and play with the system myself, instead of having someone else doing it.
Just my thoughts… I don’t think this is for everybody. It works for me… Each person should make up their own mind…
Have a great evening!