Obtaining the Realtor License: Is it Worth it?

Question

Hey all,

So I've been pondering on whether to obtain my Real Estate Sales Agent License. I'm currently a Registered Nurse and have a stable foundation in rent and some notes. My question is the following:

1. What are your expenses as a realtor starting out in Los Angeles (realtor fees you have to pay, any extras you pay in advertising, etc) ?

2. What brokerage would you suggest signing up with for good mentors for realtors in the Los Angeles area and to serve high net worth clients / investor clients?

3. As a real estate investor, is obtaining the realtor license worth it when comparing the amount you save in commissions that you would have paid versus realtor fees paid?

Thanks for all responses in Advance!

- Steven

Will Barnard · Answer

The value of having a real estate license as an investor definitely outweighs the costs associated with it. Just one decent sale or purchase in LA will get your costs back for the year and then some. I highly recommend it as you also get MLS access, CRM, contacts, ability to legally receive and pay referral fees amongst other licensed agents, etc. The benefits certainly outweigh the costs.

As to the broker, choose one with a good commission split, low fees, investor friendly, and technology.

Will Barnard · Answer

This is not exactly accurate. While it is true you can’t receive a commission representing yourself in a purchase or sale in another state, you certainly can receive a referral fee for it and as such, it is not uncommon to have your buyer rep or listing agent pay you a referral fee on your purchase or sake out of state. So there is value in having the license in that situation as well.

Bottom line and point being, having a license as an investor gives you more options and more opportunities than without it and if you are worried about the costs of getting and holding a license, then your real estate investment goals are not high enough.

I do agree trying to do 2 things part time (part time investor, part time agent) is no easy task but having the license does not have to equate to being an agent part time, just using your license for referrals, MLS access, agent contacts, and commissions on your own purchases and sales is more than enough without a full distraction.

Brian Garlington · Answer

YES!!!!!!!!!!!!!!!!!!!!!!

Charlie Cameron · Answer

1. What are your expenses as a realtor starting out in Los Angeles (realtor fees you have to pay, any extras you pay in advertising, etc) ?

There are three groups of costs:

• Broker fees and commission split
• MLS / National Association of Realtor fees - this is the one no one ever thinks about and is generally the highest initial cost (google your local MLS and check out their initial sign on fees and monthly costs or just give them a call)
• Lead Generation - should you choose to spend money on it

2. What brokerage would you suggest signing up with for good mentors for realtors in the Los Angeles area and to serve high net worth clients / investor clients?

It is actually kinda difficult to be both a part time agent and be part of a group with good mentorship at the same time.  The two don't do well together often times because the mentorship goes to the full time agents.  But it is possible.  I joined my broker for the flexibility to train, get support, and work outside of regular hours and joined a local team that supports that.  Plus new agents are assigned a local mentor as well who is required to work through the first three transactions with them, regardless of whether they join a team.

3. As a real estate investor, is obtaining the realtor license worth it when comparing the amount you save in commissions that you would have paid versus realtor fees paid?

If you are investing in LA?  Money wise I'd surely think so.  But keep in mind that being licensed in Cali doesn't help you make commission on properties you purchase out of state (yes, people get licensed without realizing that).  At the same time, getting your license could be a distraction from your real goals - think about what those are and work backward from there.  I got licensed not to be an agent forever, but to speed up my multifamily acquisitions by creating more income doing something I already enjoy.  It also gives me the option to pivot out of the military should I decide to.

Best of luck!  Hopefully that was somewhat helpful...!

Jay Hinrichs · Answer

I think it depends on how you intend to use it.. to get a license and hang it with a broker and do nothing with it.. ?  not sure that's wise.. although there are many super discount brokers in CA OR and WA were it only cost you maybe MLS dues and board dues per year.. so if your buying and selling one home in CA a year it will probably save you pretty decent chunk of change.  you can after 2 years at least it was 2 years many moons ago.. you can then sit for your brokers and you don't need to affiliate with anyone ( this is what I do) so I am not a member of a board or a member of MLS.. but it allows me to make referral fee's legally .. the only cost is every 4 years continuing ed and pay for another 4 years.. so lots of ways to use one.

Plus when you become a broker you can then legally collect fee's on HML you broker.. if your into notes at all this could work well also.

Obtaining the Realtor License: Is it Worth it?

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