Benefits of Real Estate License as an investor?

Question

Hey y’all, I’ve decided to begin studying the same material someone going for their RE license would and I’ll probably take the real estate agent exam as well.

Primary reason I chose to do this was to get a more theoretical and foundational knowledge of real estate as I am just starting out.

But I am wondering, are there any benefits to being licensed as a real estate agent if you’re planning on becoming an investor?

Nathan Harden · Answer

Yes. You do not have to ask a realtor to walk through a property because they have the key. You have access to a better MLS. You come across more ways to make money. If you can't buy it for yourself, maybe you can sell it to an investor and still make commission.

Nathan Gesner · Answer

Having a real estate license may provide some value, but it also runs the risk of exposing you to new problems.

"A man who is his own lawyer has a fool for a client." ~Abraham Lincoln

I believe the same is true for real estate. You may save some commissions, but you'll miss the value an experienced real estate agent brings to the table:

1. Extensive knowledge of the market, including property values, trends, and regulations.

2. Expert negotiating skills that get you better prices or terms and prevent someone from taking advantage of you.

3. Access to a wide range of resources like industry contacts, marketing tools, potential buyers and sellers, trusted home inspectors, contractors, attorneys, etc.

4. General experience with homes and the market, enabling them to spot problems you could easily miss.

5. Their understanding of contract law can prevent you from making a mistake and losing money or ending up in court.Everyone thinks buying and selling real estate is easy, until it's not. Unless you plan to put in the effort to become an expert real estate agent, you are typically better off paying the commission and using someone with experience.

Eudith Vacio · Answer

Hey @Luis Molina - if you're going to do more than 1 deal a year, then it might be worth it. If not, I would just find a realtor that is investor friendly that understands the game.

Having your license comes with understanding contracts, paying fees, etc that might not be worth your time / energy. If there is one thing I have realized is that you want to spend your time on your highest ROI - so if it's more worthy for you to spend time finding deals, capital , then I would focus on that!

Best of luck :)

Carlos Ptriawan · Answer

the biggest disadvantage of being a real estate agent is ....... if you have an aspiring career or motivation/passion in other fields, you may not utilize your time for your biggest passion. This is a single reason why I don't want to chase become an RE agent after learning a few hours on top of it, but I do have a passion to become a specialist, like a specialist appraiser of commercial property. So to become another real estate agent in an overcrowded business doesn't attract me that much.

Bob Stevens · Answer

Zero benefits, when you sell it you are making the profit, not commission

Good luck

Kyle Spearin · Answer

@Luis Molina This is going to vary greatly from person to person. I personally love having my license because it has allowed me to profit at the front and back end of my live-in flips. Especially in times like these, the commission serves as extra padding!

Luis Molina · Answer

Thanks for your insights! All valid points

Jennifer Dixon · Answer

If you are looking to learn how to invest, getting licensed will do basically nothing for you. I learned more in the school of hard knock a circa 2001 than my broker knew during my first year as a licensed agent.

The license does help you get into mls properties (which, depending on your market is only marginally helpful- I know in my market once it’s on mls if it’s a good deal you’ll be outbid in two shakes of a lamb’s tail. ) it also gives you networking opportunities and commission opportunities but like others have said, you’ll learn more in the school of life and in this group, YouTube, etc.

Also, when you’re licensed you gotta pay the dues and unless you get Lucky and find an amazing brokerage out of the gate, you’ll give up 40-60% of that commission.

I got licensed just a few years ago bec I got pissed off when I had to teach my niece’s broker how to do a deal that required a quiet title - this person was a broker for 23 yrs and had never encountered a back tax property auction. I had sold several as a layman and taught her when I agreed to do my niece a favor and let her list one of my properties. The day I closed on the property, I swore I’d never pay someone to do something they didn’t know how to do ever again.

You’ll find most agents know 1 thing- retail real estate. They don’t know much ab anything creative and the creative stuff is where the big returns are imo.

BUT. IF you can become the unicorn that knows retail and investment side of the house, you’ll be busier than you can manage in no time. Good luck!

Jon A. · Answer

The license isn't a huge advantage but it is helpful in some cases. The main thing is it that allows you to list your own properties on the MLS and save on commission. There are folks here who will tell you that you also get commission, and thus savings, when buying. But most of the deals I look at, the agent is not willing to co-broke. If the agent thinks you're going to claim a commission, he/she will avoid your calls and do everything to not sell you the property. Since I'm more interested in the property than a 2% commission, I leave it alone.Lastly, I wouldn't walk into the course material thinking you'll learn a lot of useful info about REI. Most agents are clueless when it comes to that stuff.. You'll learn much more just reading the forums here and listening to the podcast..

Benefits of Real Estate License as an investor?

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