Its my understanding if someone wants to become a licensed real estate broker, in Texas, they need to be a licensed real estate agent for at least 2 years in addition to taking additional classroom training courses.
What are the advantages of being a broker, vs an agent?
And as a part-time real estate investor…will having either license help me?
I am interested in taking some of the classroom training, purely for the knowledge, more than the license. As I’ve heard the required real estate agent/broker training in TX is supposed to be pretty helpful for everyone. But I’ve also heard being an agent/broker can hamper your ability to be a real estate investor. Any opinions on this too - from people who have real world experience in this area?
I don’t know TX law…but I’ll tell you my experience.
You won’t like the answer, as it is really…It Depends.
Education is a great thing, just don’t let it stop you from doing deals. Be educated enough then take action. Too many people study study and study some more…no course will teach you everything, and every deal is different. blah blah blah…you get the point.
Here are a few pros that I can come up with quickly:
Access to MLS and ability to do your own comps.
Discount when buying.
Listing on MLS when selling (hopefully you broker won’t charge you)
Open your own brokerage (once you get a Brokers License)
Seen as a professional to the general public.
Cons:
Disclosure…some say that it hinders you when talking to sellers. Example: foreclosures…they don’t want to talk to a Realtor…they want someone who can help them. This isn’t all bad, you just have to know how to talk to them…build trust.
Association Fees
Self Regulated Association BS.
Ethics issues (or lack there of)
These are just some of the basics…there are tons more of course. I think I remembered that TX as some screwy laws that hinder some investors that are not licensed.
I’d talk to an attorney to see it your style of investing requirs it or not.
I looked at the Texas Real Estate Commission web page. Yes, you have to have at least two years experience as an agent before you can take the brokers exam.
As an agent you have to place your real estate license with a broker. The broker is the responsible party in any transaction that his/her agent(s) are involved in. Because of this liability, the brokers “rule the roost”, so to speak. They make policy and agents follow that policy.
As a broker you can make your own policy and are not answerable to anyone - except the state and your clients.
As a license holder (either salesperson or broker) you will probably have to disclose this to anyone you enter into a transaction with. The reasoning is that as a licensed person you know more than the other parties in the transaction.
I have never seen this need to disclose as a negative. In my state, California, a license holder has to disclose such whenever the conversation gets beyond a casual discussion of real estate and moves to specifics. I have never found this to a problem. At the very least, the other party knows that you should know how to do what you are suggesting.
As Dmiller, noted there are pros and cons to getting a license. You will have to pay state and association fees - costs me a couple of thousand a year. The real reason one should get a license (or education) is so that he/she will have more knowledge of the subject matter - real estate.
IF you plan to deceive, lie, or misrepresent facts to sellers and buyers, then you absolutely should not get a license and yes getting a license would hamper your investing career and shorten it.
If you plan to be honest with your clients, then why would it hamper it?