Pros and Cons of Being a RE Agent?

[Andrew Sanchez]

I am very unsure of what to do in RE and I've got some questions and just want to see some real examples: 1.) If you're an agent how hard is it to disclose everything? 2.) If you're an agent how easy is it to get information on getting properties? 3.) If you have knowledge in investing, do you sell more to investors than future homeowners? 4.) What properties did you acquire due to being an agent? and how? 5.) I know these are a lot of questions but help a newbie out? thx so much!

[Derek W.]

Andrew, I have read other posts from you, and see this is something you are struggling with. I am an investor AND a Realtor. I am also a licensed contractor. Maybe I just like having important looking cards in my wallet, but I think each of these helps with my over-all real estate investing. I work in an office with over 250 agents. I agree that most of the agents do not understand investing. In fact, when I teach classes on how to be a better agent for investors, no one shows up! They don’t care. They should be the ones that snatch up the best deals for themselves, but seem content to safely earn a commission selling these deals to someone else to make the big bucks and take the big risk. There are some who get this distinction, but most don’t. It is really about being risk-averse. Selling real estate has very little risk, and a small reward. Buying real estate has a much larger risk, with a much larger potential reward. Real estate investing isn’t for the weak of heart or the risk-averse personalities. So let’s not confuse real estate agents who know a little about investing with investors who also have a real estate license.
As far as disclosures, this is so simply it isn’t even a point worth discussing. You need to let all parties with whom you are entering into a contract know that you are an agent. That’s it. When you talk to someone on the phone you say “by the way, I am a licensed real estate agent, just wanted to make sure you knew that.†When signing contracts you add a sentence that says something like “Andrew is a real estate agent and a party to the transaction…†You have also probably been told that agents have more liability than a non agent. What does that mean? If you don’t have a real estate license you can act unethically and screw people without recourse? I don’t see the disadvantage of having a license. Treat everyone fairly like you would want to be treated. Don’t lie or deceive anyone for the sake of money. Be fair and honest. Do you need a real estate license to make you do business this way? I hope not.
I know a lot of very successful investor who are either agents or brokers. In California it is getting very helpful to have your license as access to the mls is so restricted now with safe keys. I can search for all of my own properties, call the agents for additional information and tips, write my own offers, and collect a commission when I buy and sell my own properties. So as an agent, access to the largest single data base of deals is right at my finger tips. This is vital as an investor in Southern California for the next number of years. Our deals are coming from REO auctions, and straight out of the MLS. In other market cycles, it may not be as necessary to have a license, as you are dealing with mailers and direct with homeowners where people’s negative perception of agent disclosure comes from. But right now it seems crucial to have direct access to the mls. I don’t have to rely on anyone else to search as long and hard as I want to for the next deal.
Maybe it is a perception thing? A used car salesman sells used cars. A Realtor sells used houses. I think you may be hung up on the idea of a “REALTOR.†You want to invest and do amazing transactions, but a realtor just seems like a salesman, right? You don’t have to work in a big office and wear shirts and ties, and sit open houses and gather “leads†if you don’t want to. Find a broker that will you “park’ your license if that is what you desire. That is the beauty about this business. You can work in your own home in your dirty shorts and favorite beer t-shirt if you want.
But as a Realtor, you can still search for property, do the thing you love, and get a pay check when you are in between deals. I buy houses for my own rehab and retail projects, and sell them to other investors and homeowners. I sell more to investors than homeowners simply because I search for the type on inventory investor are looking for. The average homeowner doesn’t want a bank owned house that has had the copper stripped, poo in the dry toilet, and graffiti on all surfaces.
Feel free to pm me if you want more info on license requirements, brokers, real estate mentors, education etc. I like your enthusiasm and want you to make the decision that you feel is best for you based on what you really want. What works for some of us on here, may not be right for everyone.