Worth it to get Broker's license?

Question

I am an attorney and looking to get my broker's license because in my state I can sit for the exam without having to be a realtor for 3 years. I am getting it so that I can sell my home this summer, buy another primary residence, and buy one more rental property this year.  After that, I intend to buy my typical 2-3 rental properties per year.  I've sent in the requisite paperwork to waive the education requirements and am ready to start studying.

Other than MLS fees, local real estate board fees, and possibly fees to get my hands on real estate contract templates, what other fees am I missing?  I just want to make sure that I am going into this with eyes wide open.

Also, does anyone have advice on how to get some type of mentor to guide me through my first couple deals.  As I said, the deals will just be my own but I really don't want to screw anything up!   I've bought a few houses before so I least have that going for me.  Thanks for any advice!

Ariel Smith · Answer

@Sandra Holt the typical fees are the association of realtor fees (local, state, national) and MLS fees. The association will provide you with state and local contracts for you to use with your membership. Since you don't have experience as an agent in a transaction, I'd maybe consider hanging your license at a brokerage for the first couple of transactions to have them help you through them. You will have to give a cut of the commission, but it's a small price to pay to make sure you learn the basics. After that, you should be able to work on your own as a broker if you feel comfortable.

Rex T. · Answer

25 years ago , I got my real estate license so that I could get part of the commission on my deals and also not have to wait for an agent to call me back to tell me that " the property is already under contract."

I could find the BEST deals quickly before to onslaught of buyers would go after them by being first in line. This works well but make sure, as in many States, you must identify yourself as a real estate agent somewhere in the offer- contract.

I've bought/ sold many properties as my own agent and when all apartments are steaming along, make some additional funds helping others buy or sell.

The cost to hold a license is usually less than 1k / yr. which gives you quick access to listings, forms , etc.

At least for now, I would recommend having your license too, as an investor.

Sandra Holt · Answer

Thanks @Frank Wong for the input.  Luckily, I found a great mentor in my area who is a real estate agent and is willing to walk me through the steps.   I’m currently buying my fifth rental and she is guiding me in the purchase. I’m also an attorney and can read and write contracts like nobody’s business! I would never go about this in the dark.  I appreciate your insight though.

Sandra Holt · Answer

Thanks @Rex Thornton, that is exactly what I was hoping to do with my license. I do know that I have to identify myself as a real estate agent in my offers but that’s definitely worth mentioning. I have a couple investor friends who told me that they’d like to use me as their agent so I might have some side income coming in as well. For now, having my license has been a positive experience.

Frank Wong · Answer

Hi Sandra,

So you want to save money by getting a brokers license.  You also want to find a mentor so they can help you because you don't know what you are doing.

Unless you are trying to run an office and have agents working under you or plan on doing more than 2-3 deals a year then it's not worth carrying a broker's license.  More liability and more insurance costs for 2-3 deals.

I would also not list my own house for sale.  Lots of liability in that, especially if you are a broker and especially if you don't know what you are doing.

In your case, you can go straight to being a broker and not wait. Sure go for it, but you will end up working for a brokerage firm to learn.

Sandra Holt · Answer

@Marc Winter, thanks for your valuable input.  I ended up getting my broker's license and will also be using it to sell my primary home and move into another so the savings of 6% in those transactions to me was worth it.

Marc Winter · Answer

Well, not sure this is what you'd want to hear, but not sure becoming a broker for your own couple 2--3 properties per year will be worth the commission 'savings'.

What does a broker do?  Not just take a commission; a sales agent or broker is supposed to know their market, which takes bunches of groundwork.  They know buyers, sellers, bankers, title companies, etc.  They should also know off market deals.

If they cannot help you save more than their commission on bringing great deals to your table, then MAYBE you should go for it.  Guess it would depend on how valuable your time is being a practicing attorney and investor, as opposed to spending that time trying to gather the acumen and contacts a good established broker or salesperson already has.

Whichever way you go, best of luck and continued success!

Rik Patel · Answer

@Sandra Holt @Ariel Vincent

Great topic! I wanted to know your input as well. I'm currently a sales associate that has done a couple transactions with my broker, however, I'm leaning towards purchasing my own investment properties now without a broker taking a share of my purchase. If I get the broker's license, I'll use it mostly for my own purchases. However, this means I'll have to get insurance and pay more fees etc? Is it cheaper just to stay under the broker? I don't intend on hiring agents, maybe an assistant at most.

Sandra Holt · Answer

Great advice @Ariel Vincent!  Thanks for taking the time to answer my question.

Worth it to get Broker's license?

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