pros of getting a real estate license?

Question

I'm interested in getting my real estate license but i understand here in Wisconsin i have to work for someone for two years before i can operate on my own. I'm not looking to become a real estate agent i just want to save money when purchasing and selling homes that i will be flipping. so im just wondering if anybody from Wisconsin who has they're license could let me know what exactly i can do with a license without working with someone for two years?

Scott Schultz · Answer

Here is my take as a Broker Turned Investor, If I had my current knowledge and no license, I would not get one. but if I was starting to invest, i would say there are a lot of possible pluses to a license depending how you want to invest. I started out Listing REO's (got in at a brokerage that just did REO in 2006) my ability to make great purchases, and having massive understanding of the default side has pushed my investing far past most of what I read on here. That being said, you can learn a ton about the business,  and earn some commission along the way, you can learn real accurate values by doing BPO's and get paid (albeit not much) for doing market research, But you will have to hang your license with a Broker to start, and spend the money, but the education will be well worth it. I dont think I would be where I am if I had not gotten my license.

Shane Hedeen · Answer

@Nate Mckee - you have some absolutely wonderful feedback from @Marcus Auerbach and @Christopher Giannino. If you go dig around BP, you will see your question posed by probably thousands of people. There are the pros and cons of both. There are the fees that Christopher brings up, which are all very true and all add up very much. Beyond that is the fiduciary duty you would be owing yourself as your own client. If they only purpose of your license is to save a few bucks, make sure the volume of your potential business is worth it. If you're just getting going, and may only buy one property over a course of many months, your dues/fees/costs will chew away at any of your savings. If you have a high level of volume, then I can totally understand the numbers starting to work. However, you still need to know what you're doing in writing contracts, staying licensed and educated, etc.

Most part time agents who do this do sloppy jobs writing up PAs for themselves, and those mistakes can cost you a lot more than a small commission on a lower income property. People usually end up at little mom and pop brokerages, where they play a low flat fee per transaction. What they do not get in turn is much support or training from their broker and company at how they should be doing their jobs.

With all that negative vibe I just shared, I will say this. Could you do it and be great at it for yourself? Absolutely. You just need to prepare yourself financially for the burden of being licensed, and the more important burden of being educated and good at what you do as a Realtor for yourself. It just takes time and effort. Too many people in this world are looking to shortcut everything, and if you dive in and learn to do it right right way knowing your added risk, go for it man!

@Bernard H. - to your point, you have the experience and likely enough deals under the belt to branch off on your own if you wanted. The responsibilities of a broker legally when not under someone's umbrella, are much expanded. It's more money, paperwork, legal responsibility, etc. With your years of experience though, I'm sure you could get the broker's license and hang your own hat no problem. If I were you, I'd dive in and get my broker's license and go for it. That said, if you find a good place to hang your license that is an investor friendly brokerage, and they give you a split and fees that are low enough, that may be the simplest route to shop around first.

Marcus Auerbach · Answer

@Nate Mckee you also have to practice as a licensed sales person for 2 years before you can take the test to obtain your brokers license. As an agent you have to work for a broker, who is legally responsible for your actions and get's a split of your comission. In order to get your license you need to study quite a bit - most people will need about 6-8 weeks to prepare for the exam. There are also expenses involved to get licensed and then every year to renew your license as well as mandatory continued education, dues and fees. Being a licensed agent gives you access to ressources and information you don't have as an investor. On the other hand part time agents are not being taken very serious in the industry and there is a reason for that - it takes a lot of transactions to become proficient. I have been asking the same question as you did for years until I quit my full time job and became a full time agent. Knowing what I know now I would say it's not worth it just for yourself - it's a little bit like going to law school to write your own contracts and safe some money. Sure, it gives you a lot of knowledge, but unless you practice law 60 hours a week you will not be a good lawyer - you are better off to hire a good one. Same here: find a great agent who sets up a MLS portal for you and focus on becomming an expert flipper (that's already 3 or 4 jobs in one).

Nate Mckee · Answer

well thanks everybody for the great feedback and I'm pretty sure you answered my question.. i doubt at the beginning point of me trying to flip houses it would be worth the extra hassle of being licensed but definitely down the road if i increase in volume it very well could be worth it. thanks for the feedback

Brandon L. · Answer

@Nate Mckee It's my opinion that if you have no desire to help people then you probably should not invest in getting licensed. Good luck.

Christopher Giannino · Answer

I think a lot of people don't realize how expensive (if you don't plan on being a full time agent) it is to upkeep a license.  I'm just now getting licensed in NJ and I've already laid out about $1,000.  Test fees, new licensee fees, office fees, pre-licensing course, finger printing fees, realtor dues, MLS dues, continuing education requirements, ect... it all adds up.  I think if the only motivation here is to save a couple bucks when flipping houses it might not be worth your time or your money.

I will say it's definitely a great way to "break into" the industry.  I learned so much about real estate in such a short amount of time and I'm sure I'll learn a lot more over time.  Having 24/7 access to the MLS will definitely come in handy because you don't have to wait on anyone.

Ultimately, I think it all depends on what your end goal is.  Let me know if you have any questions about the whole process.  Although I don't live in Wisconsin, I'm sure the process is similar in most States.

pros of getting a real estate license?

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