Should I Become an Agent?

General Real Estate Investing
1

I have always wanted to be a real estate developer/investor. I am fascinated by how the built world helps people interact, when built correctly. I thought I would start my own companies and eventually just be able to put money into development opportunities. I’ve come to a crossroads where I’m not sure I want to do start ups, and might rather become an agent and gain mastery in commercial. I’m located in Northwest Indiana, I would probably get my IN license first and then my IL license further down the road.

It would be amazing to hear from professionals about this decision, especially if you are knowledgeable in NWI or Chicagoland real estate!

This is also my first post.

Thank you!

2

Getting a license can be an advantage to finding good deals on the multiple listing services, however, you will have additional disclosure requirements.

Personally, I have always found it best NOT to be licensed and dealing mostly in FSBO properties.

You need to determine what direction you want to go where you can have a sustained drive and pursue that direction…and then you will know if you need a license as an agent or not.

Hope this helps.

Rob

3

Rob offered an excellent answer.

Getting a license really depends on what you’re trying to accomplish.

Some downsides to being licensed are the perpetual, legal and financial liabilities. There’s a hoard of regulations governing licensees.

Agents are not taught how to think creatively, or even to negotiate beyond “garage sale” style bargaining.

Agents who negotiate steal deals for themselves, are the same ones being sued by disgruntled sellers, who realize after the fact, how much equity they gave away.

And courts routinely rule against agents in court in these instances.

Actually, any real estate professional who buys for himself, is at risk of loss, in the event the transaction is litigated. The assumption is the RE professional knows better what he’s doing, and so it stands that by comparison, the sellers are all mouth-breathing, slack-jawed boobs being filleted by the agent/investor …and therefor universally liable for damages to the seller.

All that said, a licensee/investor has more credibility with other agents who are leads to deals.

My wholesaler friend Todd got his license last year for that reason.

I questioned him on this. He said the credibility he has with other agents, as a licensee, opens door to information about deals that is otherwise not available, even to “pocket buyers.”

Notwithstanding, this results in just a small source of deals.

The bulk of his deals come from direct mail advertising.

Another upside, as an agent he can also list ‘wholesale’ deals that don’t fit his criteria.

For me, I don’t want to expose myself to 3rd party scrutiny of my deals, or business practices. I can do what works, not what fits the political agendas of the bureaucrats that govern agents.

I can still mine pocket listings from agents, who don’t have a pipeline of buyers, or a list of agent/investors, etc.

Hope that helps.

4

If you are going to pursue a career in real estate investing, having a real estate license is definitely a perk. In fact, I would recommend getting your Broker’s license. Here are a few reasons:

  1. Access to MLS information.
  2. Good source of industry data, networking peers and mentors
  3. Standardized real estate training necessary for licensing
  4. You are not paying commissions for properties you purchase, you get paid commission.
  5. Brokers can work for themselves.
  6. Credibility is increased which is good when getting loans and negotiating.

Reasons you may not want to get licensed:

  1. Fees for education.
  2. Fees for licensing
  3. Fees for MLS access.
  4. Must have your agent’s license with a company until have Broker license.
  5. Con-Ed takes too much time.

You have to weigh your options and see what works best for you - but I personally recommend getting licensed if you are looking at doing this full-time.

5

Thank you all for the answers, it’s helped me weigh my options. Without having connections in the real estate development world, I think it’s best to move forward with getting my license, signing under a savvy broker and networking with good intent.

Rob - I know that development and investment is where I want to be but see no way in besides becoming an agent with a commercial broker. Any ideas would be great.

Simon - Great breakdown, also checked out your site and it’s a great tool.

Thanks all.

6

Javipa - thanks for the insight and your style of writing is very entertaining (have seen other posts).

My goals are to eventually purchase old warehouses, industrial buildings, and older buildings near or in downtown city districts. Repurpose the buildings into either mixed use - apt/condo/retail/ or into urban farms with retail section. The buildings need to meet net-zero energy standards, so it may be a few years until the technology is cost efficient enough to pull this off.

I want to add value to the communities by providing sustainable buildings and give people good environments to live/work/play. Would like to purchase multiple parcels in each city and help transform for more walkability/downtown living. Suburbs need these concepts most. I do not have the experience or financial backing to accomplish this yet, therefore working as an agent seems like most plausible solution until credibility and network is thriving. Ideas?

7

For becoming a well knowledge and licensed professional in the world of real estate investment, industry differs from state to state and country to country.

Sometimes, most real estate agents as well as brokers need to have few hours of pre - licensing education.

For becoming an agent you should have to determine the common needs in your state.
After getting license, before getting started get to know about your market.
Be desirable to brokers.
Select a good brokers
Activate your license
Use your networks.
Market your self.