Find an agent vs. Become an agent

[Doris Logan]

Hello BP,

I've been researching what it takes to get a Realtor's license but would any of you advise getting a license versus finding an agent? Is it best in the long term to obtain a license? What are the pros and cons of having a Realtor license? I've mainly looked into this due to the MLS Report. I would like to acces it, when I please and also to cut cost of paying an agent for finding a deal for me.

Thank you,

Doris

[Buddy LaRue]

Originally posted by Doris Logan:

Hello BP,

I've been researching what it takes to get a Realtor's license but would any of you advise getting a license versus finding an agent? Is it best in the long term to obtain a license? What are the pros and cons of having a Realtor license? I've mainly looked into this due to the MLS Report. I would like to acces it, when I please and also to cut cost of paying an agent for finding a deal for me.

Thank you,

Doris

No one knows your business better than you do. So on that note, I think it's a great idea to get your license. One caveat however, don't expect the licensing courses to teach you squat about real estate investing. I've been a licensed agent for over 15 years now, and am licensed in three states. None of the courses I've taken to obtain any of these licenses taught me anything about investing. It wasn't until I joined an investors group did I really learn how to invest (and saw what screw ups I did in my own investing). However, I have enjoyed my career and will continue to do so.

I don't mean to be nit-picky, but one does not get a "Realtor's license". One obtains either a real estate salesperson's license, or a broker's license. A Realtor is a member of the National Association of Realtors and is not a license.

Pros: You can search the MLS at any time, set up and change your criteria when you like and have the changes take place immediately instead of waiting for someone to call you back, you can read the "broker's only" remarks which don't show up on the reports agents give to their clients, you can make some extra money (assuming you don't plan to leave your current job and wish to work in real estate only part time) by taking on clients of your own, you can search for your own sales and rental comps, and you have plenty of networking opportunities with other agents.

Cons: It costs money to maintain a license. There's the pre-licensing courses, and in many states post licensing courses, followed by continuing education courses necessary to maintain the license. There's the board fees, MLS fees, lockbox access fees, and you will need to place your license with a brokerage who will charge you either a percentage of the commission (for beginning agents this can often be 30-50% of the commission on each deal) or a desk fee which may be a couple hundred dollars a month or more.

You mentioned cutting the cost of an agent to find a deal for you, so you may want to try looking at things this way.....check the costs of getting and maintaining a license for the first 4 years, including going to your local real estate association and asking about their fees, interviewing some local brokers to determine how much it will cost you each month to have your license with them and weigh that against how much an agent you hire may make in the same 4 years. Do you break even, or are you ahead?

For instance: To get a license in the state of Florida, there is a 63 hour pre-license course, followed by a 45 hour post license course that needs to be taken. The pre license course is $245.00 from one of the online schools, the 45 hour post license course is $125.00. Then there's an additional 14 hours needed after the first two year license term, the classes run about $99. The license fee is $105.00 for two years. 2014 Board fees (including MLS fees) is $679 per year. Lets say that does not increase over the four year period. So far we're up to $3,395 for four years of license and we haven't taken into consideration any desk fees yet. If you find a broker who will let you hang your license and pay only a desk fee of $100/month (which would be extremely low) your fees add up to another $4,800 over the four year term for a total of $8,195, or 3% of $273,166.67 in sales.

Since I don't know how active an investor you are, maybe by looking at the question like this will help your decision. Whichever way you choose, may it be the best decision for you and best of luck in your real estate investing!