Pros and Cons of Getting Real Estate License (Georgia)

[Eliot M.]

I want to ask the age-old question of whether or not it makes sense for me to get a license to sell real estate in Georgia.  As always, I think I know the answer, but thought I'd share specifics of my situation.  I have an 8-year plan to build passive income through buy and hold rental properties.  I am still early on in the plan and still expect to purchase about 30 more single family homes over the next several years.  Tonight I got to thinking that if my plan involves buying so many houses, at about $1,200 in commission per sale (after split), why on earth would I willingly give over this commission to my agent? Why not just get a license on my own and take the commissions myself?  That's about $30k-$40k over a few years that I'm just throwing away.  This seems like a no-brainer to me and fits well into a vertical integration strategy (I'm also thinking about managing other people's rentals as even more vertical integration (aka side money).  This doesn't seem like it really requires much extra work except on the front end actually getting licensed.  Are there any downsides to this that I'm not thinking about?  Does the law require an agent/principal to do something over and above what you'd normally do if you were only principal?  Do I have to disclose extra?  Is there higher liability legally?  Can I manage my own rental properties if I'm an agent?  Can I buy/sell my own properties?  Maybe there are some licensed agents in Georgia who are also investors who can weigh in?

I have friends in Alabama who are brokers and investors and they tell me it's a no brainer to get your license for the access and real-time info it gives you... but just want to cover the bases for Georgia in case it's different over here.

[Richard Balsam]

One more piece of advise to help make up your mind in the "pro" column: 

Georgia and Florida have started looking into the legal gray area of wholesaling without a real estate license. I personally spoke with the Florida Real Estate Commission in Orlando (FREC) and also Georgia's GREC a few months ago. Both said the same thing to me (so I know a problem is brewing): 

"Nobody is allowed under the law to assist a seller in any way, while earning a  fee, commission, or profit from selling someone else's property without a license. Period. "

That's pretty must the final answer I needed to hear from them. 

I explained to them that wholesaling is selling a piece of paper only - selling the right to buy at an agreed upon price. Didn't matter. They said that if the contracting buyer didn't have the funds to buy at the time of agreeing on price with the seller - it was under a false scenerio - since they were not going to buy the house from the start. That was their words- not mine.

I remember watching a video done by the National Real Estate Investor Association online interviewing Ohio ( I believe) real estate commission. They said the same thing...

People can argue either way - only the law is right. So whichever way the law allows is the correct way. Since I am licensed- it's a moot point for me. Obviously, I'm on the "get a license" side of the argument - so whatever outcome happens down the road - it doesn't affect licensed agents anyway. 

Like I said- just another issue to help you make up your mind. It might not even apply to you - just another issue in a somewhat gray area of real estate law.

But remember- if a buyer buys the home in a double closing - no issues whatsoever - anywhere. The above doesn't apply. Only the wholesaling act with no intention to purchase the home without a real estate license is in question.