To Become a Licensed Agent or Not?

Question

Good Morning Everyone,

I am a new investor and I am contemplating becoming a licensed real estate agent in Maine.

I do not plan to pursue a career in real estate at this time, but I might in the future.  I am really looking at the advantages of being able to look at property more quickly and write my own offers.

I know there are costs involved with getting and maintaining the license.  What happens after you pass the test?  As I understand it, you must be affiliated with an office/agent.  How does that work and what are the costs?  I am concerned that an agent will not want to bring me on because I may not generate enough commissions to make it worth their while.

What options are there to create a mutually beneficial partnership with an agent so that it is worth their while?

Thanks,

Ed

Ryan Murdock · Answer

@Edmund Ricker

Your reasons for wanting your license are exactly the same ones that motivated me to get mine. I had no intention of doing anything other than my own deals but have since done $2-3MM in annual sales for other buyers and sellers each year since I became licensed in 2008. It's been a fantastic side gig. This is in addition to the primary benefit of direct MLS access and writing my own offers which would now be very tough to live without.

Rolanda Eldridge · Answer

@Edmund Ricker..It's beneficial.  I waited 11yrs to get it, but I believe it's the right time.  I'm helping family, friends, investors and myself in a business that comes natural for me and I LOVE!!! I really do eat, sleep and breathe RE...But I spend time with family, friends and pursue  other hobbies and interest...

Mike S. · Answer

I recently got my license. I still have a regular 9-5. Going to give it try and hopefully find some deals for myself and sell some to offset the dues and fees. I have a great mentor that is showing me how its done. Once I have enough rentals quit the 9-5 and do RE full time..I like the flexabilty of not being trapped in a building all day.

Edmund Ricker · Answer

@Ryan Murdock

That pretty much seals the deal for me.  I am going to take the class regardless of whether or not I get the license.

I plan to quit my 8-5 gig on 12/31/22 and be a self employed Accountant/Financial planner specializing in working with real estate investors and a real estate investor myself.

So this can only help with that.

Thanks again.

Ed

Edmund Ricker · Answer

Hi @Rolanda Eldridge,

Thanks for the comments and advice.  I think I am going to take the course and then decide whether I want the license or not.

My mains reason for wanting my license are to be able to look at property whenever I choose and to control my deals.

Thanks,

Ed

David Dachtera · Answer

@Edmund Ricker,

Purely my opinion, but I think it's going to depend on what you think having the license will do for you.

The licensing classes teach next to nothing about being a successful investor. They're meant to help you get the state license - period. MLS access? Better deals are often found on "off-market" (non-listed) properties.

Jeff Keller · Answer

In Silicon Valley writing your own offers might not be worth your time. The market is competitive. Buyers offer money and credibility.

You would probably learn more about how to make a good offer but you would probably also find it frustrating. It will be hard to find out why your offer wasn't accepted. Real estate sales is an area where the more you succeed, the easier it is to succeed. Part time is likely to be frustrating and not financially rewarding.

As a new licensee you probably wouldn't find it hard to work at a brokerage. If you don't complete enough sales it might be hard to stay there. Different companies have different ways of generating income.

In Silicon Valley many of the brokerages have more agents than they have office space. You learn and make connections at office meetings, but much of your work is done on the road. If you complete enough sales to cover their risk (insurance etc) and administration overhead, you could probably stay there a long time.

The fees they charge don't cover everything. They also need to make money off your commissions. Fees vary significantly but a very rough number would be $200 month.

Dillon Loomis · Answer

@Edmund Ricker I just took the RE test last week and passed. Definitely some good material in the course even if you do not plan to be an agent, but like @Ryan Murdock said, there is also some stuff that's pretty dry and you most likely won't run into it working as an agent.

But yes, definitely get the license. Any fees you may incur could motivate you to broker a few deals each year to cover the fees and if you have a big enough network, once people know that you're an agent you shouldn't have too hard of a time doing a few deals a year.

Lastly, shop around for brokerages in your area. I have been doing that myself here, and the smaller brokerages here have offered ZERO desk fees, and the only thing I'd have to pay is the $1,200 annually for MLS access. They also offered a surprising amount of assistance (marketing, leads, training) even given the zero desk fees. I think you should be able to find a place to let you hang your license for well under $5,000/year even with CE and MLS dues. Best of luck!

Marylin OShea · Answer

@Edmund Ricker Kudos for committing to your goals by writing them down! That is all, just wanted to cheer you on. Best of success to you.

MO

Ryan Murdock · Answer

@Edmund Ricker

I would count on $5k per year to maintain your license. Between CE credits, licensing and offices fees it isn't cheap. If you can save enough by acting as your own agent or broker a couple deals for other people it may be worthwhile for you. I know it is for me.

If you are not planning on brokering any transactions and you'll only be doing a very small volume for yourself it might not be worth the cost and other obligations.

Check with various agencies to see what they will charge you. A lower sales volume usually means higher monthly office fees - the agency will make money whether you sell anything or not.

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